Higher-ups at Goldman Sachs are reportedly locked in a fierce debate over whether to cough up more compensation for junior staffers, even as rival banks hike pay packages amid complaints of sweatshop-like working conditions.
Some top managers at Goldman fret that they’ll lose talent to competitors like JPMorgan, which last month hiked salaries for first-year bankers from $85,000 to $100,000 — or overseas banks like UBS which are allowing employees to work from home at least part-time as they pitch greater workplace flexibliity, according to the Financial Times.
Wall Street firms are scrambling to keep young bankers from fleeing dizzying workloads amid a slew of pandemic-driven dealmaking. In March, a leaked slideshow presentation compiled by 13 junior Goldman Sachs analysts detailed complaints about 100-hour workweeks. Some griped of shifts as long as 20 hours that left them little time to eat, sleep or shower, claiming that the grind was damaging their physical and mental health.
Some execs stress the competition for analysts has become heated and they need to make the firm palatable to young talent, according to the FT. Other senior Goldman bankers, however, say hiking pay sets a precedent for the bank to raise salaries every year, even when their earnings disappoint.
The latter contend that bonuses are a better way to compensate staff since they are awarded based on performance — and that the bank’s reputation should be enough to entice talent, the report said.
“We should not participate in this game of moving salaries up and down every few months,” one Goldman banker told the FT. “If you behave like that you simply end up with mercenaries. We pay at the end of the year for performance.”
Goldman has set salaries through the end of July but can adjust compensation beginning in August — leaving them a matter of weeks to make a decision on whether to increase base pay.
Goldman, which like other banks is expected to report bumper profits this week as the economy bounces back from the coronavirus, did not immediately respond to request for comment.
Slow to raise pay, Goldman Sachs has been the most aggressive about returning to the office, treating employees two weeks ago to free food and musical performances during their first week back. Goldman CEO David Solomon has been vocal about his dislike for remote work — calling it “an aberration that we are going to correct as quickly as possible” and “not a new normal” for employees at the bank.
After complaints from junior bankers spilled onto social media, Goldman and JPMorgan vowed to hire more staff, with the latter pledging to boost its headcount by 200. Private equity firm Apollo Global Management has reportedly offered some associates as much as $200,000 to stick around.
Elsewhere, Citibank CEO Jane Fraser told employees she was banning Zoom meetings on Fridays to address Zoom fatigue. Investment bank Jefferies even offered its junior staff the primo Peloton bike as a “thank you” for working long hours.