Quantcast

Greg Smith “Jerry Maguire” Exit Cost Goldman Dearly

Somebody Hire This Man

Get the WebProNews Newsletter:


Greg Smith “Jerry Maguire” Exit Cost Goldman Dearly
[ Business]

Greg Smith was executive director and head of the Goldman-Sach’s United States equity derivatives business in Europe, the Middle East and Africa. As Shawn Hess reported here yesterday, Greg Smith’s departure from Goldman-Sachs via New York Times Op-Ed was a unique “take this job and shove it” moment. But, little did the financial Goliath know that his piece would cause so much blowback for the company.

Among Smith’s criticism’s of Goldman, he said that the culture had deteriorated to the point that there were now three ways to get ahead in the company:

What are three quick ways to become a leader? a) Execute on the firm’s “axes,” which is Goldman-speak for persuading your clients to invest in the stocks or other products that we are trying to get rid of because they are not seen as having a lot of potential profit. b) “Hunt Elephants.” In English: get your clients — some of whom are sophisticated, and some of whom aren’t — to trade whatever will bring the biggest profit to Goldman. Call me old-fashioned, but I don’t like selling my clients a product that is wrong for them. c) Find yourself sitting in a seat where your job is to trade any illiquid, opaque product with a three-letter acronym.

I attend derivatives sales meetings where not one single minute is spent asking questions about how we can help clients. It’s purely about how we can make the most possible money off of them. If you were an alien from Mars and sat in on one of these meetings, you would believe that a client’s success or progress was not part of the thought process at all.

It makes me ill how callously people talk about ripping their clients off. Over the last 12 months I have seen five different managing directors refer to their own clients as “muppets,” sometimes over internal e-mail.

In other words, Smith pulled a Jerry Maguire.

By the end of the day, the market had registered its displeasure with Goldman for the kinds of indignity that Smith described. The company’s stock lost 3.4%, which translated to a $2.15 Billion hit for shareholders.

It’s almost like Smith predicted it yesterday:

It astounds me how little senior management gets a basic truth: If clients don’t trust you they will eventually stop doing business with you. It doesn’t matter how smart you are.

Greg Smith “Jerry Maguire” Exit Cost Goldman Dearly
Comments Off
Top Rated White Papers and Resources

Comments are closed.

  • Join for Access to Our Exclusive Web Tools
  • Sidebar Top
  • Sidebar Middle
  • Sign Up For The Free Newsletter
  • Sidebar Bottom