Wall Street fights to retain talent, but money isn’t always enough
It didn’t matter that Citigroup paid Amy Wu Stratton $450,000 in 2021 — her most lucrative year ever — to work with some of her biggest private equity clients. It didn’t matter that she was on track for a promotion that could double her salary.
After almost 16 years in banking, she was ready for something new.
“I was so sick of it. It didn’t make me happy,” said Ms Stratton, 45, a former director of a Citi division that worked on financing and risk management for transactions. she loved had become a hamster wheel, she said — an unsatisfying hunt for more money and promotions.
“You don’t have time to breathe,” she said. “The pandemic has slowed me down and made me take stock.”
Up and down Wall Street, hordes of bankers are changing jobs — changing banks, moving to investment firms, taking stakes in fintech companies or cryptocurrency start-ups — and sometimes come out completely. Pandemic-inspired boredom, huge profits and an industry-wide war for talent have accelerated job turnover at the country’s big banks.
“People are exhausted,” said Alan Johnson, chief executive of Johnson Associates, a Wall Street compensation consultancy. The ranks of those earning $10 million or more will rise amid competition for the best after a bumper year for earnings, Mr Johnson said, but “money doesn’t always make you happy”.
Ms Stratton left Citi in June, moved by social upheaval: the Black Lives Matter protests, the January 6 riot at the US Capitol and an increase in anti-Asian attacks. She and two partners are developing a website, myasianvoice.com, for Asian women that focuses on careers and social impact.
It was an obvious choice, said Ms. Stratton, a Chinese immigrant whose Upper East Side co-op and Wall Street awards had already outgrown her humble upbringing in a rural village that lacked running water.
“I was so happy to come out of this thought of always having more and more,” she said.
itchy foot forced the big banks to open their wallets: the combined claims costs of the country’s six largest lenders rose 12% to nearly $178 billion in 2021.
Goldman Sachs has awarded special scholarships to about 30 senior executives and some 400 partners to retain them. Bank of America raised the salaries of thousands of senior and middle investment bankers and handed out stock grants to subordinates. Even junior industry analysts have seen their typical base salary rise to $100,000 or more from around $85,000.
In many cases, banks are competing with each other to attract talent. Sarah Youngwood, chief financial officer of the consumer banking division of JPMorgan Chase since 2016, will become the chief financial officer of Swiss bank UBS in May. She will join a management team whose members earned an average of $9.5 million in 2020, according to UBS’s latest compensation report.
Other bankers who are heading to rivals spoke on condition of anonymity due to the sensitivity of the issue. One sacrificed his bonus to leave, but the new company covered his shortfall and gave him a role with more responsibility. Another with decades of experience was lured by a competitor to start a new business, getting rid of what he saw as the frustrating bureaucracy of his old business.
But the wealth of opportunity extends well beyond direct competitors.
Stephen M. Scherr, who left his post as chief financial officer at Goldman Sachs at the end of December, quickly switched to the head of Hertz. He earned $38 million in 2019 and 2020, even after receiving $7 million for Goldman’s role in raising money for a Malaysian sovereign wealth fund plundered by a former prime minister and his entourage. At Hertz, Mr. Scherr will receive a base salary of $1.5 million and more than 12 million shares of the company that will vest over several years if he achieves the goals.
Sayena Mostowfi, 44, took over as chairman of the Long Term Exchange, an upstart equity exchange, this month. Ms Mostowfi, former director of global e-equities operations at Citi, said she jumped at the chance to start a new venture.
“The great thing about working in a small business is that there’s a direct correlation between the effort you put into the work you do and the results you get,” he said. she stated. “I’m willing to bet that being in a start-up will bring me better results than being in a bank.”
Booming markets have given wandering bankers plenty of cash to fall back on, said Roosevelt D. Bowman III, senior investment strategist at asset manager AllianceBernstein.
Mr Bowman said mid-career professionals who had run business units and earned millions of dollars a year had “already hit the first home run”, making it easier to take risk. “There is so much wealth created in so many different ways,” he said.
Michael Litt, managing director of Vidyard in Waterloo, Ont., is recruiting an investment banker for a senior position at his 300-person video messaging business. These dealmakers can be assets because they have “incredible work ethic and focus,” Litt said.
In return, it can offer equity and the greater influence that comes with working in a small business. Another rare advantage on Wall Street: work wherever you want. A Vidyard executive, Mr Litt said, lives in a boat docked off Los Angeles.
Tim Shea left Truist Securities to open a Chicago office for boutique investment bank Solomon Partners in September. Along with another managing director, Mr. Shea has hired two vice presidents, two partners, an analyst and summer interns. He is also in late-stage talks to hire senior bankers and expects his team to grow to around 20 people by the end of the year.
These candidates can count on a good salary due to the boiling job market. If new hires left money on the table at their old jobs, such as a pending bonus or deferred pay, they can “expect to be fixed”, Mr Shea said.
Future employees think more deeply about their careers, knowing they’re going to put in long hours, he said. They ask themselves, “How can I make this as meaningful as possible and feel good? ” he said.
Big paydays are always a powerful draw, of course. Just two years ago, Steven G. Eckhaus, a Wall Street labor attorney at McDermott Will & Emery who represents top bankers in employment negotiations, blocked a $20 million signing bonus for a customer after a four-month bidding war. It was an exorbitant amount then, but Mr. Eckhaus has negotiated a handful of similar packages in recent months with little fanfare.
“These guys are very good poker players – in the end, everyone shows little emotion,” Eckhaus said. “They feel they are getting what they should.”
This year’s job jump season isn’t even in full swing — bonuses often land in mid-February and stock rewards in March — but plenty of heavy hitters have made the jump in 2021 as well.
Gregg Lemkau, who co-headed Goldman’s investment banking division, left to be managing director of MSD Partners, which manages more than $20 billion for Dell Technologies founder Michael Dell and others. Jack MacDonald, former co-head of global investment banking at Bank of America, left to join boutique investment bank Centerview Partners. And a former head of Goldman’s Marcus consumer unit, Omer Ismail, has joined Hazel, a Walmart-backed fintech startup that will be rebranded as One.
At executive search firm True Search, demand for fintech candidates grew more than 200% in the past year, said Grant Beighley, who leads searches for the firm’s fintech clients. October was the busiest month in the history of his financial services practice, with more than 60 new searches.
And many bankers, Mr Beighley said, are in the market to try something different.
“They’re tired of feeling like a cog in a machine,” he said.