Morning Coffee: How Goldman Sachs' "outstanding" VP ruined his career with a holiday. Citi's extreme MD promotions
When Jon Reeves, a vice president in Goldman Sachs' London compliance control room, was appraised in 2018, things seemed to be going well for him. Reeves was deemed "outstanding" by 87% of the Goldman people who gave him feedback. He was up for managing director (MD) and due to be "crossed-ruffed" by colleagues opining on his suitability for an MD role in 2021.
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But then Reeves had a baby. And not only did he have a baby, he went on holiday to Cornwall during the August bank holiday. While he was driving to Cornwall on Saturday with his wife and young baby, there was a "trading system blow up". Reeves' biggest boss, Goldman's head of compliance, convened all his most senior people, including the COO, the head of engineering and the heads of each major compliance division in a virtual meeting. He wanted to convene Reeves too, but Reeves was driving to his Cornwall holiday. He didn't get the message.
It was a faux pas that came to haunt Reeves' career and that contributed to a new perception that instead of being outstanding, he was "kind of lazy." When Reeves asked for six months paternity leave for his second child two years later, the perception of laziness was reinforced. He was taken off the MD track, his performance was newly graded as "meeting expectations," his pay was cut, and in 2022, he was fired.
Reeves has just won a claim of sexual discrimination against Goldman Sachs, on the grounds that the bank would have been far more tolerant of a woman on maternity leave and with parental engagements than it was of him, a man. He's also deemed to have been unfairly dismissed. Reeves has been seeking £3.8m in damages from Goldman. He'll find out in January whether he gets it.
Reeves' fate might discourage other Goldman men from taking paternity leave. It might also discourage anyone at Goldman from going on holiday and not looking at their phone. The tribunal judgement clarifies the extent to which this incident turned sentiment at Goldman against Reeves. When his line manager told him he was underperforming in 2021, she said: "I’m thinking about that one time, which unfortunately made not a great impression when we first had the trading system issue blow up... And you were driving, right? And we couldn’t get you, and everyone was trying to call you, we couldn’t get you. And I must say unfortunately that just became a really negative sound bite, like, where was Jon in all this?”
The judgement also reveals how people at Goldman Sachs speak when they're fired-up about things. While Reeves was deemed lazy and incapable of juggling work and family, the woman who replaced him while he was on paternity leave became a favourite. Reeves' New York line manager described her as having "knocked the ball out of the park," and said that she was, "crushing it. Stepped up. Star performer. Doing a much better job than what Jon was doing.” Right.
Separately, after the fears that Citi might not promote that many managing directors (MDs) and that it would slash promotions, it's become apparent that Citi has actually made more MD promotions than ever.
The US bank has, in fact, promoted 344 new managing directors this year, up from 304 last year, 331 in 2022, 306 in 2021, 241 in 2020 and 220 in 2019, making it one of the biggest MD rounds in recent history.
The Financial Times notes that Citi's markets division benefitted from a lot more promotions this year. So did its technology and operations division.
The number of MD promotions can be a proxy for the need to keep people happy: the more people who are promoted, the less pervasive the disgruntlement in the senior ranks. So, either Citi has a lot of talented people this year, or it needs to keep a lot of people happy. Or both.
Meanwhile...
Markets saw the largest number of promotions at Citi, at 69, followed by 48 in its banking group (encompassing investment, commercial, and corporate banking), and 42 in wealth. Technology has 27 new MDs. (Business Insider)
Women make up about 28% of this year’s Barclays MD class. Employees from an under-represented race or ethnic background account for about 7% of the promotions. (Bloomberg)
HSBC named former Deutsche Bank executive Adam Bagshaw, who joined in 2020, as global head of investment banking. (Financial Times)
Apollo is building a new private credit trading desk under Eric Needleman, its head of capital solutions. It might be hiring. (Bloomberg)
The biggest jump in the number of promotions was in Citi’s markets division, which named 69 new MDs this year, up from 40 a year ago. Goldman Sachs is expanding its Latin American fixed income business. It's hired Juan Ocampo from Gramercy Funds Management as a managing director based in New York focusing on structured credit, plus five VPs in the past few months. (Bloomberg)
Money is flowing back to private equity above private credit. (Bloomberg)
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