"I don’t know. No one really knows how much holiday you get because
nobody ever takes it all."
The big brains and brutal work ethic help to give Goldman the edge when it
comes to snagging the best, and richest, clients. One veteran Goldman banker
explains: "You are programmed at an early stage to go out more than the
other guy, to see more people — clients, hedge funds or private equity guys."
Goldman staffers are also trained to "brain pick" contacts and
clients harder than the other guy. "You ask what’s their best trade.
How do they see the market," says one. "You offer something in
return, but you always come back with something. Then you feed it to
colleagues who go to work trying to use the information to make money."
Other banks do not get such good information, and what information
individual bankers do get, they tend not to share because they regard it as
power they can use to benefit individually. "Goldman is not like that,"
the veteran banker says. "It’s a team effort." Or, as one
rival banker puts it, "They’re a clever gang — of thugs."
Dane Holmes, 39, Goldman’s head of investor relations, is a 6ft 8in tall,
260lb former college basketball player. He looks like he could run straight
through opponents — hell, through brick walls! — if he wanted to. But, he
says: "That’s not the way Goldman works. You can have a great career in
banking as an individual, but it won’t be here. The system weeds out those
who can’t play nicely with others."
When Goldman gets behind something, everyone in the giant hive wants a piece
of the action. Take this article. Once the bank had agreed to talk, it was
hard to get senior executives to shut up. One, Michael Sherwood, 44, co-boss
of Europe, flew back to the firm’s London headquarters from the IMF meeting
in Istanbul, via Moscow, for a 40-minute interview, before jetting off again
straight away to see clients in the Gulf.
The idea of teamwork goes right to the top. Goldman may not be a private
partnership any more — it went public a decade ago — but the bosses work
hard to foster a "we’re in this together", family-style
approach. Others say it feels more like a cult, but they mean it as a
compliment. Some of its practices make perfect sense. Bonuses, for example,
are not based on personal performance, as they are at many banks, but on the
performance of the firm as a whole, and partners receive a sizable chunk of
their remuneration in stock that they cannot sell until they leave the firm.
It weeds out what Dina Powell, 36, the firecracker Egyptian-American boss of
Goldman’s philanthropic arm, calls "egomaniac jerks" who
might be tempted to bet the farm on red in the hope of skewering a bigger
bonus.
Other practices are distinctly creepy. Goldman-ites are forced to check their
secure voicemail morning, noon and night for the latest bon mots of
Blankfein and Eileen Dillon, 48, who is officially head of operations for
the executive office but unofficially camp counsellor. Goldman is the
biggest user of voicemail in the world. The "mind bullets" consist
of anything from the latest profit and loss figures, to reports of what the
chief executives of key clients have told Blankfein and his top team over
lunch, to instructions to "switch off on holiday, for goodness sake".
No calls to meet in the basement to club baby seals to death first thing in
the morning to get in the mood for a hard day’s banking? "God, no,"
one staffer says wryly. "We don’t club baby seals. We club babies."
What makes people who are bright enough to do anything they want put up with
the days-into-nights-into-days working and the dorkish corporate groupthink?
There’s the money, of course. Goldman Sachs isn’t nicknamed "Goldmine
Sachs" for nothing. There’s so much of the stuff sloshing around that
in an average year a good investment banking partner will make $3.5m, a good
trading partner $7-10m and a management committee member $15-25m. Some 953
employees got bonuses of at least $1m in 2008. Blankfein may insist he is
still a blue-collar guy, but he manages to have a $30m apartment on Central
Park West and a 6,500-square-foot home in the Hamptons, the summer
playground of New York’s elite. One former Goldman banker describes the
culture as "completely money-obsessed. I was like a donkey driven
forward by the biggest, juiciest carrot I could imagine. Money is the way
you define your success. There’s always room — need — for more. If you are
not getting a bigger house or a bigger boat, you’re falling behind. It’s an
addiction." Addiction is a word Sherwood uses, too. He should know.
He’s on his second multi-million-pound super-yacht. "I like boats,"
he says. Not sailing, but boats. It’s his way of keeping up with, and in
with, his friend the BHS billionaire, Sir Philip Green, who lives for part
of the year on his 208ft, £32m yacht, Lionheart, which is moored in Monaco. "How
many boats have I bought?" Sherwood says. "It’s not a good time to
answer that. I’ll take the Fifth."
But there’s another powerful motivator: doubt. There may be arrogance at 85
Broad Street — behind closed doors, Blankfein likes to joke (but not
really) that he has "attained perfection" — but behind the
bravado, Goldmanites, curiously, question their ability. "There is a
deep and constant paranoia about everything we do," says Sherwood. It
applies to an individual’s performance and the prospects for the firm as a
whole.
Insecurity is hard-wired into the system. You feel it even before you are
hired. Most applicants are interviewed at least 20 times before they are
made an offer and some more than 30 times. Once hired, each staff member is
constantly and confidentially reviewed by those they work with. There’s a
metric for every aspect of performance and each staffer is measured against
their department and the firm as a whole. Every year, staff are put into one
of four quartiles by the Human Capital Management department. Note the "Capital".
At Goldman, people are money. The top are richly rewarded, while the fourth
quartilers? Who cares? They won’t be around much longer. It’s up, or out. "We
say goodbye to the bottom 3-5% every year [about 1,500 people]," says
Richard Gnodde, 49, co-boss of the European operation, based in London.
Taking type-A people, making them feel like type-B people and moulding them
into kick-ass teams that work every hour God — sorry, Goldman — sends, is
important, no doubt. But it’s not Goldman’s killer app. That is its
extraordinary networking ability. The firm is the greatest talent network in
the world. Unlike at other banks, top performers are encouraged to get on,
make all the money they will ever need in their thirties, then get out to "do
good". The average tenure of a partner is eight years. "You don’t
join for the retirement programme," says one staffer. "You have
your phase of the moon to make money and then f*** off." But doing good
does not mean running an HIV clinic in Kinshasa, it means getting top jobs
in treasuries, central banks and stock exchanges around the world. The list
of former Goldman executives who have held key posts in the US
administration and vital global institutions in New York and Washington
alone is mind-boggling. It includes: the treasury secretary under Bill
Clinton (Robert Rubin); the treasury secretary under George Bush (Hank
Paulson); the current president and former chairman of the New York Federal
Reserve (William Dudley and Stephen Friedman); the chief of staff to the
treasury secretary Timothy Geithner (Mark Patterson); the chief of staff
under President Bush (Joshua Bolten); the economic adviser to the secretary
of state, Hillary Clinton (Robert Hormats); the chairman of the US Commodity
Futures Trading Commission (Gary Gensler); the under-secretary of state for
economic, business, and agricultural affairs under President Bush (Reuben
Jeffery); the past and current heads of the New York Stock Exchange (John
Thain and Duncan Niederauer); the chief operating officer of the Securities
and Exchange Commission’s enforcement division (Adam Storch). Moreover,
Goldman’s new top lobbyist in Washington, Michael Paese, used to work for
Barney Frank, the congressman who chairs the House Financial Services
Committee. To put this in perspective, imagine that Alistair Darling, the
chancellor, and his key advisers, Mervyn King, governor of the Bank of
England, Xavier Rolet, the boss of the London Stock Exchange, and Hector
Sants, head of the Financial Services Authority, all used to work at the
same City firm before moving into government. Small wonder that another of
Goldman’s nicknames is "Government Sachs".
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