(Financial News) Goldman Sachs will today announce its latest class of managing directors, the first under chief executive David Solomon.
The rank of MD is highly-coveted in US investment banking, not least because of the enhanced pay that comes with it.
Goldman reveals its new MDs once every two years and this year’s promotion round will be keenly watched for clues about the changing face of the bank under Solomon.
Since succeeding Lloyd Blankfein a year ago, the former investment banker has been shrinking the Wall Street firm's most senior ranks — that of its partners — and reducing a reliance on its vast sales and trading operation for revenues.
Financial News will be publishing the full list of Goldman MDs later. For now, here is a reminder of the process of gaining a promotion to MD at Goldman. In 2017, Portia Crowe wrote:
The entire process takes four or five months from the moment senior executives begin seeking input from managers as to who should be considered, until the final decision is made in November.
Candidates do not officially know they are in the running, but most will have made it known they would like to be considered for MD. They typically have informal conversations with managers before the process starts around June.
Candidates must demonstrate commercial effectiveness and an ability to enhance the value of the firm, which for front-office employees might mean you are bringing in business and your business ranks on the league tables or is profitable. You must also show signs of leadership such as mentoring junior staff, leading a team or leading divisional or firm-wide initiatives.
Next is what is known as the “cross-ruffing” process — a bridge term appropriated by former Goldman Sachs chief executive and US treasury secretary Robert Rubin — where evaluators solicit feedback on candidates from a broad group of managers outside of their division who have worked or been in contact with them. That is followed by a consultation period with leaders of the candidates’ divisions.
Final decisions can go right down to the line, and not everyone who goes through the procedure succeeds; some endure the stress and pressure of the process multiple times and never advance beyond the rank of executive director.
The cathartic release for successful candidates officially comes in the form of a phone call or meeting, usually with a senior partner, shortly before the new class list is announced internally (the announcement is held until each person has been briefed).
But the real nod comes the day before the announcement, when unsuccessful MD hopefuls are pulled aside and informed in advance that they have not made it. Having passed that final hurdle, candidates can safely assume they have been chosen for promotion.