There’s a real tug-of-war going on down at 200 West Street, the Manhattan world headquarters of Goldman Sachs.
On one side of the rope are the heavyweights—smaller in number but greater in leverage—beginning with C.E.O. David Solomon, or “D.J. D-Sol,” as the 60-year-old has dubbed himself in his party-centric side-hustle world: D.J.-ing. (In July, D-Sol will be spinning at Lollapalooza, believe it or not, alongside Metallica and Dua Lipa.)
Backing up Solomon (at Goldman, not onstage) is his deputy, John Waldron, the firm’s president and chief operating officer. They are assisted in this battle by other members of Goldman’s management committee, such as Dina Powell McCormick, a former deputy national-security adviser to Donald Trump; John F. W. Rogers, a former White House assistant to Ronald Reagan and the longtime Goldman consigliere; and Alison Mass, chairman of Goldman’s investment-banking division.
On the other side of the rope, pulling hard and in greater numbers, are the hundreds of junior bankers—known as “analysts” in Wall Street terminology—who are staging a revolt against the firm’s long-standing office culture. Their numbers are bigger, for sure, but their collective strength is being tested. After all, these “analysts” are expendable.
It’s harder to get an entry-level job at Goldman Sachs than it is to crack Harvard. The school accepted 3.19 percent of applicants for its class of 2026. Goldman has it beat by a landslide. According to the bank, it received 236,000 applications from students seeking internships and reportedly accepted just 1.5 percent of them.
At the moment, you can score the fight 5–0 for management—or, in some cases, 7–0 (as in days of the week). To translate: for the older generation, the battle is about how many days a week Goldman’s bankers, traders, asset managers, and technologists must be in the office and how many days they can continue to work from home. Management wants the youngsters in the office five days a week, no questions asked; the analysts want to have some WFH days.
It’s harder to get an entry-level job at Goldman Sachs than it is to crack Harvard.
The war being waged at Goldman Sachs is similar to the one being waged across other Wall Street firms, as well as at the law, consulting, and accounting firms that service them and their global clientele. It’s also about how many of the perks that became standard during the pandemic will remain in force now that things with respect to the virus—fingers crossed—seem to be easing up. And beyond perks, how many days a week will those recent college grads get to work from home in their joggers and T-shirts and how many days will they have to trudge down to 200 West Street in what passes these days for acceptable Wall Street attire?
This is not a minor skirmish. And Solomon is clear about what he wants. “We want people to generally come together,” he told CNBC at the Milken Institute Global Conference earlier this week. “We want people to work in teams, we’re a collaborative culture.”
Solomon has previously said that working from home is an “aberration” and recently told Fortune that “the secret sauce to our organization is: we attract thousands of really extraordinary young people who come to Goldman Sachs to learn to work, to create a network of other extraordinary people, and work very hard to serve our clients…. For Goldman Sachs to retain that cultural foundation, we have to bring people together.”
As a former M&A banker at Lazard, at Merrill Lynch, and at JPMorgan Chase, I couldn’t agree with Solomon more. Investment banking, trading, and investing are apprenticeship businesses where the skills are learned gradually from the Jedi masters. Giving the right advice during a sale or acquisition of a company takes years to perfect, and mistakes have serious consequences. You must learn from the best, and there is no substitute for the subtleties and the wisdom of deal-doing that comes from watching the experts live and in action.
Yet in a company where that same C.E.O. is jetting off to party and to work the turntables at music festivals that these junior analysts would no doubt rather be at, instead of stuck at their desks all weekend—well, there is another increasingly vocal reaction to Solomon. Of late, Goldman’s pissed-off junior bankers have taken to the aptly named Blind, an anonymous-messaging app, to complain about the increasing pressure being put on them by Goldman’s top management to get them to return to the office for work. Moreover, Goldman is using technology to track whether the junior bankers show up in the office. As one Goldmanite wrote on Blind, “The top management says it’s employees’ choice but internally they track which team has most in office attendance.”
Added another, “It’s f**ing bulls**t from top management saying they are people first. In our team meeting, a manager showed us the excel [spreadsheet software] where the MDs [managing directors] are tracking which department has not met in-office commitments.” And another: “Apparently they are tracking everyone’s attendance and managers are getting lists of people who have low attendance so they can bully them into coming in.”
There is now chatter on Blind of junior bankers doing what was almost unthinkable pre-pandemic: dumping Goldman. All because of the 7–0 debate. “I saw 30% attrition in my team in NY,” wrote one Goldman employee in late April, “and have seen/heard a lot of people leaving Goldman Sachs in NY/Dallas locations.”
Of late, Goldman’s pissed-off junior bankers have taken to the aptly named Blind, an anonymous-messaging app, to complain.
Someone working at Google, where the return-to-work mandate is much more fluid than at Goldman, wrote on Blind that if he or she worked at Goldman, they would quit. “Totally,” replied someone at Goldman. “Even I want to prepare for some interviews.”
On May 1, a Blind poster listed his or her gripes about Goldman, including a “shitty work culture,” “forced RTO [return to work],” “elimination of vacation carryover policy,” and (my favorite): “ass licking = better performance.”
(For Goldman’s part, a spokesperson told me they wouldn’t comment on the debate, instead referring me to David Solomon’s CNBC interview at the Milken Institute Global Conference earlier this week.)
Something else that’s really fueling the rage: Goldman’s changing—and wildly disproportionate—perks. They’ve always been a part of the culture, but starting April 25, Goldman eliminated a variety of coronavirus-era perquisites. Gone are the free car rides to and from work, replaced by a single free car ride home from 200 West Street after a certain time of night, usually nine p.m. Also gone are the free lunch and the free breakfast. Cash registers have reappeared in the Goldman cafeterias. And there are reports of no more free coffee. (Need we remind you that the total compensation of a junior analyst at Goldman Sachs these days is around $200,000?) As a result of complaints about the rising cost of delivery and taxes for takeout food, Goldman did agree to raise the dinner stipend to $30, from $25—on the condition that the junior employee work through dinner.
But the forced return to the office and the return to a more normal set of perks for the junior-banking crowd at Goldman is not happening in a vacuum. Rather, it is happening in the context of Goldman’s coming off 2021—its best year ever, where the bank made a profit of $21 billion. (By comparison, JPMorgan Chase, a Goldman rival, made a profit of $48 billion in 2021.) The bonuses at Goldman were also said to be quite robust, especially so for both Solomon and Waldron. Solomon’s total compensation for 2021 was $35 million; Waldron made $33 million. (Meanwhile, the median bonus for a junior analyst at Goldman in 2021 was reportedly about $100,000.)
In addition, the Goldman board decided in its infinite wisdom that the two men needed more incentives to stick around. In October, Goldman decided to award Solomon a roughly $30 million stock grant and Waldron a $20 million stock grant. Both stock awards do not vest until 2026.
But even that was not enough for the top executives at Goldman Sachs. According to The Wall Street Journal, Solomon and a small group of top people are going to start taking for themselves a bigger slice of the bounty that comes from Goldman’s large private-equity business. The logic, I guess, is that despite the large pay packages for Solomon, Waldron, et al., they still are not paid as lushly as their private-equity counterparts. For instance, Stephen Schwarzman, the co-founder of the über-successful Blackstone Group, took home some $1.1 billion in compensation in 2021, while his competitors at KKR, Henry Kravis and George Roberts, took home around $110 million each.
It’s clear that 2022 is shaping up to be a very different year in the financial markets than 2020 or 2021. That will probably mean lower pay at most levels of the Wall Street hierarchy. But there’s still an obscene amount of money sloshing around the Wall Street canyons, making the decision to cut out the free lunch for the youngsters even more difficult to fathom, especially when an important goal is to get them to return to work at the office.
William D. Cohan is a Writer at Large for AIR MAIL and the author of such best-selling books as The Last Tycoons, House of Cards, and The Price of Silence. He is a founding partner of Puck. His new book, Power Failure, will be published in November