Goldman Sachs Group Promotes 262 to Managing Director
By Christine Harper
Oct. 26 (Bloomberg) -- Goldman Sachs Group Inc., the most profitable securities firm in Wall Street history, promoted 262 executives to managing director a day after adding 115 partners, the firm's top rank.
Managing directors are appointed annually, while partners are named every other year. The nominations take effect on Nov. 25, the start of the New York-based firm's new fiscal year. While Goldman doesn't disclose pay for managing directors, the promotions can be worth millions of dollars and put recipients next in line for the even-more lucrative title of partner.
``The managing directors are quite well-paid at Goldman Sachs, but not like the partners,'' said Henry Higdon, an executive recruiter in New York whose financial-industry clients include Goldman. ``You can't hang around at Goldman, you've got to be productive, you've got to be adding value all the time.''
The nominations are the first under Lloyd Blankfein, who took over as chairman and chief executive officer in June when Henry Paulson became U.S. Treasury Secretary. Goldman's profit for the first nine months of 2006 surged 60 percent to $6.39 billion -- more than any rival made in a full year. That means bigger rewards than ever for the firm's partners, who share a special bonus at the end of each year, and its managing directors.
The number of new managing directors tops the 209 named last year, the record since Goldman's initial public offering in May 1999. The lowest number of managing directors was in 2003, when the firm selected 136.
The Holy Grail
Goldman was owned by its partners for 130 years before the IPO, giving them the most influence and the biggest rewards at the firm. The decision to continue naming partners every two years is part of the firm's effort to maintain its culture.
``The system has been so incredibly successful, it produces this great teamwork that they have and the results are indisputable,'' Higdon said. ``Everybody would like for their son or daughter to go to Goldman and become a partner -- that's the Holy Grail on Wall Street.''
This year's partner class is the biggest since the IPO. At least one of the newest partners, Carl Faker, became a managing director only last year. Others including Gregory Agran, Mary Byron and Lorenzo Grabau became managing directors as long ago as 1999.
About half of the partners are based in the Americas, with the rest split evenly between Europe and Asia. The number of partners outside the U.S. has grown as the firm's profits from other regions increase.
Growth in Asia
``We're definitely growing fastest in Asia, second in Europe, third in the U.S.,'' David Viniar, Goldman's chief financial officer, said when the firm reported third-quarter results on Sept. 12.
Goldman made a paper profit of about $3.9 billion earlier this month from its stake in Industrial & Commercial Bank of China Ltd., which sold shares to the public in the biggest-ever IPO. The firm made an additional $1 billion by selling its Japan golf course operator in the country's second-biggest IPO this year.
The new partners named yesterday include Mark Florian, the firm's top infrastructure banker, James Esposito, head of investment-grade debt syndication, and Martin Werner, a co-head of Latin America investment banking and former Mexican deputy finance minister.
Also included were Douglas Feagin, a Hong Kong-based adviser to financial-services companies, Simon Mansfield, who oversees European distressed-debt trading from London and chief Goldman spokesman Lucas van Praag.
Goldman's shares, which have gained about 50 percent this year, surpassed $190 today for the first time, rising $3.39 to $192 at 1:02 p.m. in New York Stock Exchange composite trading.
``Goldman recruits more than their share of the best and brightest, and in choosing managing directors they distill it down to a very, very formidable workforce that is a money machine,'' said Michael Holland, who manages $4 billion at New York-based Holland & Co. ``It's in the results already.'' |
