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Unformatted text preview: not enou gh, or he didn’t care. Cynics on Twitter
are already su ggesting that Smith is attacking his former employer becau se he
didn’t get promoted to managing director.
The old Goldman, says Smith, “revolved arou nd teamwork, integrity, a spirit
of hu mility, and always doing right by ou r clients.” The new Goldman, he says,
is abou t doing “whatever will bring the biggest profit to Goldman,” even if that
goes against the interests of its clients. I’m not in a position to say if this is
really tru e. Bu t let’s assu me for the sake of argu ment that Smith’s criticisms
are sincere and accu rate.
Smith blames the cu rrent Goldman CEO, Lloyd Blankfein, and its president,
Gary Cohn, for losing “hold of the firm’s cu ltu re on their watch.” Bu t the real
cu lprits are Goldman’s 1990s partners, led by Hank Pau lson and Jon Corzine,
who in 1999 converted the venerable bank from a 221-member partnership
forbes.com/sites/aroy/2012/03/14/…/print/ 1 /3 into a pu blicly traded company.
There is a hu ge difference between Goldman Sachs, the partnership, and
Goldman Sachs, the pu blicly-traded entity. If you ’re a partner at an
investment bank, you r incentives are long-term-oriented. You ’re going to be a
partner for decades, and you know that you stand to be best rewarded by
maintaining the loyalty of you r best clients. This incentive, in tu rn, leads you
to want to take pride in you r work, as something that is abou t you r clients,
rather than abou t short-term moneymaking.
On the other hand, Goldman the pu blicl...
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This note was uploaded on 01/27/2014 for the course FINA 2010 taught by Professor Wangyan during the Winter '11 term at CUHK.
- Winter '11