Greg Smith's may very well go down as one of the most infamous Wall Street resignations in history after his blast of Goldman Sachs (NYSE:GS) on Wednesday sent shockwaves across the industry.
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Alas, his is just one opinion in a company of 34,700 employees.
After a dozen years with the banking giant, the former head of Goldman’s equity derivatives business in Europe, the Middle East and Africa called the firm “toxic and destructive,” saying he can “no longer in good conscience … identify with what it stands for.”
He went on to spell out what he believes are Goldman’s flaws, including its sketchy business practices, lack of culture, and mishandling by CEO Lloyd Blankfein and president Gary Cohn.
While Goldman took a PR hit on the letter, Blankfein quickly rebuffed the statement, calling Smith’s remarks inaccurate and acknowledging that in a company of more than 30,000, it's not surprising some people may feel disgruntled.
As it turns out, Blankfein may have a point.
The company has long been criticized for its long hours, extremely competitive internal environment -- many have said that it cuts up to 5% to 10% of its staff ever year to weed out lower performers -- and even questionable business practices.
Indeed, the government has noted the latter, with the Department of Justice launching several investigations into the company for its handling of complex mortgage-related investments in 2007.
But challenges and scrutiny have yet to put a serious dent in Goldman’s success. It passed the Fed’s stress test on Tuesday while some others failed, leading analysts at Sandler O’Neill to lift its first-quarter earnings per share view on Goldman by 22%. And despite reporting in January a 58% decline in quarterly profit, Goldman widely trumped Wall Street expectations.
Employees at the company have acknowledged that success, giving the bank a stellar rating of 3.7 out of 5.0 for career opportunities and 4.0 for compensation and benefits, according to a Glassdoor survey of more than 525 employees.
The average analyst at Goldman Sachs makes a base salary of $63,400, according to Glassdoor, while the average vice president makes more than $150,000. That, of course, does not include usually robust annual bonuses.
One Goldman employee in a Glassdoor review touted the company’s “competitive pay,” industry experience, “smart people,” brand recognition, satisfaction of long-term career goals and compensation and interaction with employees across the globe.
In fact, both senior leadership and employee morale scored near perfect. Despite the negative headlines that have often accompanied Blankfein's name, the CEO has mostly managed to remain in a positive light with his employees.
Since Glassdoor data started accumulating in the first quarter of 2008, the chief executive has seen his rating zigzag, ranging from a low in early 2011 of 84% to a high of 100% in five separate periods from 2008 through 2010.
Of course it’s not all rosy at the nation’s fifth largest bank by assets. Goldman’s staff is dissatisfied with the balance between work and life and overall fairness, leaving some employees feeling disrespected, according to Glassdoor data.
“The firm is starting to lose its luster, so it’s harder to justify treating your people poorly for the sake of reputation,” one New York-based Goldman employee said in a Glassdoor review.
Another challenged the company’s ability to fuel creativity and motivate “culture carriers,” calling management “very short sighted” in people strategy.
“Politics and the consensus principle are hugely detrimental to innovation,” one unnamed Goldman Sachs employee said.
Another said the “prestige factor” of both the firm and industry is “clearly not where it was 5-10 years ago,” but still called Goldman “one of the top places to work.”
In a memo to employees, Blankfein said it was unfortunate that one person speaking amplified in a newspaper drowns out the opinions of others that have provided detailed feedback to both the firm as well as independent public surveys.
“Our firm has had its share of challenges during and after the financial crisis, but your pride in Goldman Sachs is clear,” he said. “We are far from perfect, but where the firm has seen a problem, we’ve responded to it seriously and substantively.”
To be fair, Goldman said that in a recent internal People Survey of which 85% of employees responded, nine out of ten people, including a large amount of the company’s 12,000 vice presidents, which had included Smith, said the company provides “exceptional service to them.”
Of course, that survey was internal, and it's unclear whether it was completely anonymous.