Goldman Sachs CEO promises to protect junior bankers’ Saturdays off following survey detailing ‘inhumane’ conditions

David M. Solomon, President and Co-Chief Operating Officer of Goldman Sachs, speaks during the Milken Institute Global Conference in Beverly Hills
Goldman Sachs CEO David Solomon told junior bankers the firm would try harder to give them Saturdays off in a Sunday voice message viewed by Insider.

  • Goldman Sachs CEO David Solomon responded to complaints by junior bankers.
  • Solomon in a message to staff said the firm will work harder to give junior bankers Saturdays off.
  • 13 junior bankers detailed “inhumane” conditions in a survey that made the rounds on social media.
  • See more stories on Insider’s business page.

Goldman Sachs’ chief executive said the firm will address issues raised by a group of junior bankers who described “inhumane” working conditions, poor mental health, and sleep deprivation in a brutal internal survey.

“This is something that our leadership team and I take very seriously,” Goldman Sachs CEO David Solomon said in a voice message sent to staffers Sunday, according to a transcript viewed by Insider.

The investment bank will work to more strictly enforce its “Saturday rule,” which stipulates that junior bankers shouldn’t be expected to be in the office from 9 p.m. Friday to 9 a.m. Sunday, Solomon said. It will also accelerate hiring and shift employees to the firm’s busiest divisions to ease the workload on junior bankers.

In an informal survey posted to social media, a group of 13 first-year investment analysts at Goldman described being so overworked that they were left with barely any time to shower, eat, or sleep.

The analysts said they worked an average of 98 hours per week since January and slept an average of five hours per night. All respondents said their work hours had negatively affected their relationships, and they rated their satisfaction with their personal lives at a 1 out of 10.

“The sleep deprivation, the treatment by senior bankers, the mental and physical stress … I’ve been through foster care and this is arguably worse,” one unnamed analyst said.

Read more: Some Goldman analysts are fed up with 98-hour workweeks from their bedroom as a year of WFH forces Wall Street to reevaluate junior bankers’ workload

All 13 respondents said they have frequently experienced unrealistic deadlines, and 83% said they had frequently experienced excessive monitoring or micromanaging. Seventy-five percent of respondents said they had sought or had considered seeking mental-health counseling due to work-related stress.

At the end of the survey, the analysts suggested several solutions to management, including capping workweeks at 80 hours and giving junior bankers Saturdays off unless they’re given advance notice. First-year analysts are often assigned “quick” work on Saturdays, and it is “incredibly hard to push back,” they said.

Solomon attributed the high-stress conditions to a boom in business amid the pandemic. He also said that working from home has made it more difficult to strike a work-life balance.

“Clients are active, and volumes in a lot of our businesses are at historic highs. Of course, the combination of the pandemic and all this activity put stress and strain on everyone at Goldman Sachs,” Solomon said. “We recognize that people working today face a new set of challenges. In this world of remote work, it feels like we have to be connected 24/7.”

Although grueling hours and heavy workloads are expected on Wall Street – and they’re generally counterbalanced by hefty paychecks – the junior analysts indicated they were unlikely to stay with the bank if working conditions didn’t improve.

“Being unemployed is less frightening to me than what my body might succumb to if I keep up this lifestyle,” one analyst said.

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UBS investment banking co-president Robert Karofsky will become sole head following the departure of Piero Novelli

FILE PHOTO: The logo of Swiss bank UBS is seen at a branch office in Basel, Switzerland March 2, 2020. REUTERS/Arnd Wiegmann/File Photo
FILE PHOTO: Logo of Swiss bank UBS is seen in Basel

  • UBS’ co-president of investment banking, Robert Karofsky, will become its sole head, the bank announced Monday.
  • Current investment banking co-president Piero Novelli will step down at the end of March.
  • Under Karofsky, UBS has pushed to bring together its investment banking services with other units, like wealth management.
  • Visit the Business section of Insider for more stories.

UBS named Robert Karofsky as sole president of its investment banking arm on Monday.

His current co-president, Piero Novelli, is to retire from the banking industry, effective March 31. Novelli will move to the Euronet NV stock exchange, serving as chairman.

Karofsky joined UBS in 2014, leading the equities business globally. Both he and Novelli were named co-presidents of the investment bank in 2018.

The pair reorganized the unit and last year delivered its strongest results since 2012, the bank said in a statement. 

Read more: UBS is doubling down on efforts to link its wealth-management business to its investment

Karofsky and Novelli have also pushed ways of boosting the business by linking closer with other UBS services.

Wealth management, for example, has been a big priority for UBS since the global financial crisis. Linking its $2.75 trillion wealth management business with investment banking has proven an effective strategy amid the boom in SPACs. 

UBS had the fifth-highest underwriting volume for SPACs in 2020 among investment banks, according to SPAC Research. It’s found that in some cases, SPAC sponsors already have wealth management accounts with UBS, and it leverages that relationship to get its investment banking arm involved in the deal.

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The top 20 dealmakers of 2020, ranked

rainmakers list 2x1
Meet the top dealmakers of 2020.

Dealmaking got off to a rough start in 2020, with mergers and acquisitions temporarily going over a cliff in the springtime as the world was met with a series of lockdowns and harsh restrictions to confront the spread of the coronavirus.

But by late summer and into the autumn, activity roared back, albeit with some notable differences – such as virtual meetings in lieu of in-person management presentations, and limited celebratory fanfare for completed deals. 

In spite of a stormy start for M&A, top dealmakers at firms like Goldman Sachs and Morgan Stanley still managed to deliver a series of marquee deals like S&P Global’s $44 billion all-stock planned acquisition of data firm IHS Markit, chipmaker Nvidia’s $40 billion acquisition of SoftBank-owned British competitor Arm Holdings, and Salesforce’s $27 billion acquisition of Slack.

Ultimately, 2020’s M&A volumes were down just 5% compared to the year before. 

To take a closer look at the people behind the numbers, Insider has partnered with MergerLinks, a financial intelligence platform that tracks deals and individual bankers, to present our second-annual edition of “The Rainmakers,” a league-table ranking of the top-20 M&A bankers based on the size of the deals they orchestrated in North America last year. 

So who was the top rainmaker when it came to M&A in 2020?

While Goldman Sachs had the most representation with four bankers cracking the top-20, the No. 1 spot went to Anthony Armstrong, Morgan Stanley’s global head of technology M&A. Armstrong, who joined Morgan Stanley in 2015 after a long run at Credit Suisse, landed several megadeals in 2020, including a role advising chipmaker Nvidia on its $40 billion cash-and-stock acquisition of Arm Holdings, the the SoftBank-backed semiconductor giant. 

Click here to see the full list of the 20 top North American dealmakers for 2020 

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A Stanford finance professor explains why there’s no such thing as ‘deregulation’ – no matter what politicians claim

Federal Reserve coronavirus
A man wearing a mask walks past the US Federal Reserve building in Washington DC on April 29, 2020.

  • Paul Constant is a writer at Civic Ventures, a cofounder of the Seattle Review of Books, and a frequent cohost of the “Pitchfork Economics” podcast with Nick Hanauer and David Goldstein.
  • In this week’s episode of Pitchfork Economics, Hanauer and guest cohost Jessyn Farrell spoke with Anat Admati, a finance professor at Stanford’s Graduate School of Business, on how banking is regulated in the US.
  • Admati says it’s natural for elected leaders to create more safety nets to make banking safe for American consumers.
  • The concept of government ‘deregulation’ won’t result in less regulations, Admati explains, but instead will allow banks to create their own regulations that can be prone to negligence and fraud.
  • Visit Business Insider’s homepage for more stories.

It’s quite possible that the greatest trick that trickle-downers ever pulled was framing the battle over government’s relationship to business as regulation versus deregulation. It sounds simple, a binary choice between all or none: Either you want businesses to be regulated, or you want to deregulate the market. “Deregulation” in this context sounds sleek, minimalist, and freeing, while “regulation” sounds cumbersome and complicated.

But here’s the dirty little secret about deregulation: It doesn’t really exist.

There’s no such thing as “fewer regulations,” only a shell game that shifts ownership of regulations from one authority to another. What we call “deregulation” simply stands for a belief that corporations should act only in ways that suit their preferences – with no consideration for anything beyond shareholder value.

Read more: The newly passed California Privacy Rights Act expands consumer privacy laws. Here are 3 crucial ways businesses should prepare in 2021, according to a veteran cybersecurity expert

In other words, human activity within a society is always regulated – the only question is who’s doing the regulating. 

All that really changes when, say, the Trump administration moves to roll back regulations on oil drilling in the Alaskan Arctic, is that the government cedes control over drilling regulations, handing the reins to the oil industry. While the government’s regulations sought to protect unspoiled public lands, the oil industry’s “regulations” seek to enrich shareholders and executives at the public’s expense by exploiting irreplaceable environmental resources in exchange for a quick buck. 

Back in 2008, we saw what happened when the federal government systematically ceded control of regulations to the banking industry over the span of decades. Left to their own devices, the banks set in motion a mortgage crisis by building up a pyramid scheme that nearly brought down the global economy. The banks’ regulations favored immediate profits over long-term sustainability, and the rest of us paid the price.

That economic collapse is part of the reason why this week’s guest on the Pitchfork Economics podcast, Anat Admati, half-jokingly refers to herself as “a recovering finance professor.” Admati, who still teaches finance at the Stanford Graduate School of Business, says the egregious failures of unfettered capitalism have caused her to look at banking regulations in a new way. 

“I’ve become very interested in why capitalism and democracy are failing us altogether,” Admati told Pitchfork Economics hosts Nick Hanauer and Jessyn Farrell. Admati’s fascination with regulatory collapses led her to her role as director of the Corporations and Society Initiative, which seeks “to promote more accountable capitalism and governance,” and also inspired her to coauthor a book titled “The Bankers’ New Clothes: What’s Wrong with Banking and What to Do About It.”  

Admati realized that the financial industry was ill-equipped to regulate itself in 2013, when Wells Fargo CEO John Stumpf argued against new Federal Reserve regulations that would require the bank to stop making risky, debt-laden bets like those that caused the financial crisis. Stumpf bragged that “because we have this substantial self-funding with consumer deposits we don’t have a lot of debt.”  

Admati was astonished. “In other words,” she explained, “he forgot that my deposit is basically his debt to me, and he forgot that it’s a liability to him. Why? Because I don’t behave like a creditor.” 

Even though Wells Fargo technically owes its customers the money that they entrust them with, the FDIC insures those deposits and the government has proven that it’s ready and eager to protect giant banks from crises of their own creation. 

Read more: We mapped out the ghost kitchens run by ex-Uber CEO Travis Kalanick’s CloudKitchen and competitor REEF Technology. See where the fight for ghost kitchen dominance is heating up.

It’s only natural that elected leaders create “more and more safety nets to make [banking] safe.” 

“But the safety net has enabled more recklessness because perversely it created ever more complacency and also removed any market forces from this system,” Admati added.

In short, a CEO whose bank was buffered by one comprehensive set of federal regulations that were created to protect consumers from financial negligence was arguing against other industry regulations that would have caused Wells Fargo to behave responsibly. It’s a deeply layered ecosystem of regulations – seen and unseen – that often contradict each other in complicated ways.

To a trickle-downer, this might sound like a story highlighting the importance of deregulation. But remember – that’s just an argument for letting Wells Fargo create its own regulations, which isn’t a terrific idea, given the institution’s extensive history of fraud. The best answer is to regulate smarter – to realistically gauge the purpose of each regulation, ascertain how it can benefit the broadest number of people, and enact it so that it functions as efficiently and successfully in the real world as it does in theory. 

“We have to have a system in which the government works for us,” Admati concluded. “If we don’t understand that we need an effective government – not big or small, just competent and effective – to actually create an economy that functions, then that’s why we’re in the trouble we’re in.”

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