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Yeah, it's extremely weird that Google et. al. went on hiring sprees when they could have just given their employees next level money. All those weird side projects that haemorraged money led to lower return on capital employed, which pisses off investors (even more than not giving them fat dividends does) and also pisses off your employes compared to the counterfactual where they would get millions a year.
Funnily enough I was recently talking to a (leftier than me) friend of mine who didn't know that all the big famous investment banks were public companies and that anyone could buy their shares.
After I told him he was extremely surprised by this fact and opined that they must be an excellent way to make money only to be brought down back to earth after I told him that in reality they were really shitty investments because all that money they made went to their employees as salaries and bonuses, leaving their public investors with mediocre returns.
He said something along the lines of "Of course this happens, typical greedy banker behaviour". Because I value this friendship I wisely left it at that and changed the subject, but deep down a part of me wanted to quip "Firstly you complain about big companies putting investors ahead of their employees and how this makes them capital-B Bad/greedy, and now here you have an example of a class of companies which do the opposite and put their employees ahead of their investors and now you are calling them capital-B Bad and greedy for this behaviour? Make up your mind man!"
Why aren't there more often shareholder revolts against the banks then?
A few reasons. Banks do actually generate very healthy returns for investors in good times, and most large investment banks are integrated parts of ‘universal’ banks like Bank of America and Citigroup that have large retail banking operations that print money when rates are reasonable and the economy is fine. So often, while an economy is overheating and investment banking deal fees skyrocket, retail banking profits shoot up too, which means as a whole investors have little to complain about. The margin on M&A (especially in the US where deal fees are very high) is also so high that there’s enough for everyone to come away happy.
The second reason is that bank stocks are like all equities largely owned by institutional investors, many led by portfolio managers / executives who themselves started their career on the sell side (in investment banking). They have an understanding that a handful of the best and most well-liked dealmakers and traders (and their ancillary junior staff) can represent hundreds of millions or billions of dollars of income for the bank, and are themselves paid extremely well anyway, so they’re reticent to complain about banker pay (ie. “If you think banks pay too much, wait until you see hedge funds/pension funds/etc”).
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I agree, in many ways finance is one of the most worker-friendly industries there is. Things like MDs who have a few too many bad years and get forced out being given (almost military style) promotions to some made up title and a couple million for a year or two while they look for a new job, long sabbaticals available to most longstanding employees, a real air of camaraderie. We had senior leaders take huge real pay cuts despite some of their individual sector teams doing well to limit layoffs early last year.
I have a friend on the business side of engineering who said that he almost got fired when he was late to a whole-team meeting with the CSO/global head of sales because they’d been drinking the previous night and he’d overslept, he’d been thrown under the bus. In finance that’s a rite of passage! I’ve seen a VP miss a critical pitch because they went too hard the previous night and everyone (including the MDs and relevant Vice-Chairman) covered for them, not to do so would have been dishonorable. I’ve seen guys give each other the shirt off their backs (literally!) if someone’s going out for a client meeting and they notice a stain and don’t have time to buy a replacement.
Seems sad that other industries lack that. There’s backstabbing in banking, but it’s pretty rare because it’s a small world and nobody wants to hire assholes after 2008, the money usually doesn’t justify it and clients rarely like them anyway.
Yes to all of this.
The dirty secret in banking is that it is a fantastically boring job with close to zero intellectual stimulation. It's a sales gig that also makes you work 60+ hours a week on busy work. The military analogies and military-like culture makes sense - the guys (and gals) who make it are 10-20% above average sales people and 80-90% "I can take relentless shit for years on end" tough.
The best hustle in the finance world is high-net worth / ultra-high net worth individual wealth management. If ever there was a job that was literally "I get paid to golf and go to cocktail parties" this is it. The hours are sane to luxurious (anywhere from 20 - 40 a week). The money can be seven figures easily. The rub - your first five years are often poverty wages, it is 110% networking (meaning that if your network is bad at networking, you pay the price), and everyone has their "lucky break" story. No one makes it through grinding alone.
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