As debate continues to rage about what the "appropriate" amount of work is for junior investment bankers, Mary Erdoes, chief executive officer of JPMorgan Chase & Co.’s asset and wealth management business is weighing in with an opinion that the snowflakes complaining about their workload might not like.
Erdoes says that "there's a reason" that junior bankers are forced to work 12 hour days, six days a week, according to Bloomberg. She says the hours will "help them master the job in two to three years" instead of the five years it would otherwise take.
“If you think 10,000 hours is about what you need to master any subject, if someone comes in and has a regular, eight-hour-a-day job, five days a week, it’s gonna take about five years to have a base-level mastery,” she told David Rubenstein on Bloomberg Wealth.
She continued: “On Wall Street, it’s more like 12 hours a day, six days a week. That cuts you down to about two and a half years before you become mastered in something.”
She also told the story of starting in the industry by balancing her grandmother's checkbook at the age of 6, earning a few of "a few dollars a month".
2,200 new analysts will be starting training with JP Morgan this summer.
Recall, we recently wrote how Houhilan Lokey was the latest firm to cave to the PR crisis of appearing to give its junior bankers too much work. HL was "rewarding" junior bankers with 5 night stays in the Caribbean, as a result.
Dan Miller of True Search Recruitment said: “Is it the best time to be a banker in terms of making money? Sure. Is it a horrible time in terms of lifestyle? Absolutely.”
Recall, just days ago we noted that Blackrock had bumped its base pay 8% for staffers at its Director level or lower. This came hours after we wrote that Goldman Sachs was considering a bump in pay for its junior employees.
Staffers at the director level and below can expect an 8% bump in pay as a way for Blackrock to "reward its workforce". The raises are expected to go into effect on September 1. Blackrock still plans on following its legacy salary processes, the report notes, meaning that employees will still be eligible for raises at the start of next year. The initiative was announced via a memo from CEO Larry Fink and President Rob Kapito.
The move continues to highlight Goldman Sachs as one of the very few Wall Street firms that hasn't offered a base pay bump for its employees. However, as we noted last week, Goldman is now weighing whether or not it should raise salaries for its youngest employees.
There has been pushback from Senior Executives at Goldman, who have argued that bumping up salaries mid-year could set a "dangerous precedent", FT reported last week, and break from the company's long-held “pay for performance” compensation structure.
Goldman could be following steps taken not only by Blackrock, but by banks like Citigroup, which offered an increase of up to $25,000 last week to move its fixed salaries to $100,000 per year. JP Morgan and Barclay's also lifted salaries to $100,000, from $85,000 at the end of June, FT notes. Bank of America and Wells Fargo increased salaries by $10,000 each, as well.
With Goldman the last to act, one senior executive commented to FT: “We should not participate in this game of moving salaries up and down every few months. If you behave like that you simply end up with mercenaries. We pay at the end of the year for performance.”
First year analysts at Goldman make, on average, $86,000 in salary plus a $37,500 bonus. Investment banking co-heads James Esposito and Dan Dees have already "promised that younger staff would be generously rewarded to reflect the bank’s surging earnings", according to the report. The bank, however, is reluctant to part from its pay-for-performance model.
Another executive commented: “We are still thinking through the split of the base and bonus. We are looking at what peers have done, not just in investment banking but in other industries. The war for talent is more fierce than ever before.”
“Goldman does not want to hire people for whom the most important thing is how many days they have to spend in the office. The others can have them,” another executive commented.
Recall, just days ago, we noted that Cantor Fitzgerald's CEO, Howard Lutnick, was pushing back on junior bankers that think they have life too tough. Lutnick said that junior bankers complaining about long hours and stressful demands should "rethink their career choice".
Lutnick's comments followed 13 junior bankers at Goldman complaining about their workload earlier this year in a slide deck that was released to the public. They claimed to be working 100 hour weeks and experiencing declining physical and mental health. The public scrutiny caused other banks to offer bonuses and rewards to retain their younger talent (and, more importantly, stave off a PR crisis).
But when interviewed last week, Lutnick broke from the crowd, stating: “Young bankers who decide they’re working too hard -- choose another living is my view. These are hard jobs.”
He continued: “There is a path to becoming an investment banker that requires an enormous amount of work including late nights and weekends. Clients want their deals finished under tight deadlines. You should know that going in.”
Lutnick also broke from the majority by stating he wanted his key employees back at their desks. The pandemic, combined with complaints from junior bankers, had led to some banks relaxing rules on working from home.
“That is our model. Front-office people are going to be working from the office and that will be a competitive advantage for the firm. Back-office staff, such as technical support, compliance and legal, can be more flexible."
Cantor's employees have been in the office since last summer and were given a June 1 deadline to come back to the office.