Why I Left Goldman Sachs: A Wall Street Story (27 page)

And then there was Georgette. A number of people I talked to before I left had cautioned me to “tread carefully.” In the middle of my first day in London, I walked up to her desk and said, “Hey, Georgette, how’s it going?” She was looking at her Bloomberg screen and typing something.

“Oh, hey,” she said, without turning her head. Zero eye contact.

“I just wanted to update you on some of these meetings I’ve been having,” I said, and mentioned a few of the people I’d talked to. She still didn’t look at me. “Is now okay for you?” I asked.

“You know, now is not great,” she said. “Just keep me posted afterward on how it all went.”

There was something off-putting and vaguely intimidating about her refusal to make eye contact.
I’ve flown all the way over here from New York
, I thought.
If I do this job, we’re going to be working together rather closely. Plus, I’ve known you for nine years. Couldn’t you spare fifteen minutes to have a cup of coffee with me?
But meeting her on her turf was apparently very different from meeting her on mine.

In the middle of the second day, the woman who was coordinating my schedule told me that I was now slotted in for a final meeting with Michael Daffey. This was very good news. The message was that I had done very well, that most people had signed off on me. Daffey was to be the final arbiter.

Meeting with Daffey in London was a very different thing from seeing him in New York at Soho House with a killer buzz under his belt. He was now the global head of Equity Sales, and the head of Securities Sales in London, meaning he managed both FICC and Equities. He had thousands of people ultimately reporting to him. He was now an official Very Important Partner, and a hard guy to see. You had to go through three levels of security, not to mention a strict English lady sitting guard at the desk outside his door, just to get in his office.

At the appointed time, the English lady escorted me into Daffey’s impressively big and elegant office. The first thing that caught my eye, besides Daffey smiling and extending his hand, was a large framed lithograph on the wall, a single word in big black type on its white background. It read:
PEOPLE
. It was the old Daffey. I breathed a sigh of relief. “Dude, great to see you,” he said. The assistant closed the door, and Daffey gave me his undivided attention. “So why do you want to do this job?” he asked.

I told him the truth: that even before I came over, I’d seen it as a potentially exciting opportunity, and that my meetings had all confirmed that idea. I said I thought I was the right guy to do the job, that I knew the business inside and out, and that I really wanted him to give me the chance to make it work.

He was nodding, looking positive. Then, to his credit, he asked me the right question: “What are your concerns about moving over?” he said. “Any issues?”

I spoke my heart, telling him openly and fully of my worries about my family. He and I had known each other a long time, and even though he was now the top guy, I trusted him more than anyone else. But since he was the boss, I also wanted him to know that I’d be making a big sacrifice by transferring to London.

At the same time, I wanted to tell him that I genuinely did relish the idea of working for him again. I reminisced back to when we’d first met, in 2002. “I’ve always considered you to be one of the highest-integrity people around here,” I said. “It would be a special thing for me to work for you again and do you proud.”

Daffey looked serious. “Buddy, you’ve always been working for me,” he said. Then, as I took that in, he smiled. “Dude, you’re done.”

In the outside world, “you’re done” does not have good connotations. On Wall Street, however, it does. It means the trade is done; we’re in business. What Daffey was telling me was that the job was mine. “In fact,” he said, “I’m going to walk back with you to the trading floor.”

This was a big deal. Daffey did not go onto the trading floor very often. As we walked in, suddenly the floor went quiet. The seas kind of parted a little bit—and this was hundreds of people. Daffey was talking with me, joking with me. It was the most powerful kind of endorsement. It said, “Greg’s my guy.”

Despite the glow of acceptance, I still had doubts. Goldman lore says that when the firm taps you on the shoulder to go overseas, you’re allowed to say no only once or twice. On the flip side, the lore also says that accepting the assignment catapults you to the next level faster than anything else. Virtually every important leader of the firm has spent time in Asia or in Europe. I was torn.

Yet I also remembered how, when I was first invited to join Goldman Sachs, I waited three weeks before accepting, pissing some people off royally. So I knew that if I was going to accept this offer, I needed to do it quickly.

I landed at JFK, rode back into the city, and phoned my friend and consigliere Phil from the taxi. I gave him the background on the offer and the potential opportunity in it. “Come by,” he said.

It was 11:00 on a Sunday night. Phil met me on the corner of Sixty-Second and Park. He was staying at his parents’ place that night and didn’t want to disturb them, so we stood outside in the brisk November air and talked for forty-five minutes, my bags on the sidewalk next to me.

He pushed very hard for me to take the job. “This is Europe,” he said. “You’re young. This is going to be a great experience. You have to do this.”

When I went into work the next morning, I asked a senior MD on the floor if I could talk with him for ten minutes. He was a busy guy, but when he saw how serious I looked, he said yes. I wanted to talk with him because he was a level below my New York bosses, Mr. Cleanse and Beth, and he knew Daffey well. He knew all the players, and I trusted him. He didn’t have a dog in the fight. He was the perfect guy to go to for some analytical, agenda-free advice. We went into a glass-walled conference room. I shut the door, then checked the speakerphone—it’s a Goldman habit, whenever you go into one of these rooms for a private meeting, to hit the phone’s hang-up button a few times, make sure you hear the dial tone, then hang up again. Triple-check. If there’s a videoconference machine in the room, you make triple sure that that’s off.

The MD asked me what was up. “I need your advice, man,” I said, and told him about the London offer. “Is this a good move?” I asked. “I’m not asking them to move me;
they’re
asking
me
. All my friends are here. I don’t want to be screwed by not being rewarded adequately for pulling up stakes. Do you think they’re going to do right by me?”

He looked at me. “Okay, this is completely off the record,” he said.

I nodded.

“Greg,” he said, “I’m telling you this as a friend—way, way off the record. You should go out immediately and get another job offer, so you can squeeze them and make sure you mark yourself to market correctly. Because this
is
a big move, and a big sacrifice. You’re picking up your whole life and moving to another country.”

I listened very carefully. What he was saying made a lot of sense, from a practical standpoint. During my tenure at Goldman Sachs, I’d gotten a number of calls from other firms. It had happened in various ways: sometimes a bank would contact me directly (as JPMorgan Chase did once); once in a while, a client would try to get me to move over. The head of trading at one of my clients, who had become a bit fed up with Goldman Sachs and knew the head guy at Morgan Stanley, tried to facilitate a switch for me. Now and then, headhunting firms would get in touch. Sometimes they’d call through the switchboard and say it was “your friend” or “your cousin”; sometimes they’d give a made-up name such as “John Spencer.” I’d think to myself, “Who’s John Spencer?” Then I’d pick up, and the headhunter would say, “Can you put me on privacy?” And I would know immediately what was going on.

As soon as I pushed the Privacy button, the headhunter would say something like “Hi, it’s Bob Simons. I’m a headhunter representing Credit Suisse. This is the position we’re looking to fill. I’d like to talk to you about it.” Then he’d usually say, “Can I get your cell phone number? I’ll call you in the evening or this weekend.”

I never followed up. In my whole career, I never once met or interviewed with another firm. I guess, in retrospect, I bled GS blue. I took loyalty very seriously, and didn’t want anyone to think otherwise.

On the other hand, almost everyone I knew at Goldman interviewed somewhere else at one time or another. The MD who was counseling me was a very reasonable guy, and he was simply acknowledging the truth: the firm didn’t repay loyalty in any way; they would fire anyone at any time. It was increasingly becoming a numbers game. If you’d been there ten years, fifteen years, twenty-five years, the only sure way to guarantee they were valuing you correctly was to mark yourself to market by shopping yourself around the marketplace.

Sometimes I wondered why I was so dedicated. I could easily have told my bosses, “You know what? I went out there, and my fair value is $900,000 instead of $700,000—take it or leave it.”

But I never wanted to do that, because, as stupid as it may sound, it wasn’t all about the money to me. I wanted to succeed at the best firm on the Street. I didn’t want to shop myself around to find more money in a lesser firm. Maybe I should have, for my family’s sake if for no one else’s. But because I didn’t, I almost certainly got paid less than I could have been paid. And sometimes I wondered: was I being loyal to a shadow?

I caught up with Corey Stevens later in the morning. He pushed as hard as Phil for me to accept the London job, stressing once again that going to London would put me on the track toward upper management. Then I got word from Beth that Goldman might offer me the expat package, the supplemented salary the MD in London had spoken of. I knew the way these things worked: this was a wink-wink. “Might” meant “definitely.”

I called my family.

My sister was very supportive; she thought I should do it. My mother said exactly the same thing. “I really don’t want this to derail your coming over to America,” I told her. She promised it wouldn’t. My brother was encouraging, too. My dad was a bit more hesitant, but only a bit. He asked if I was committed in the long term to staying in America. Of course I was, I told him.

On Wednesday I told Goldman Sachs yes.

Though I accepted the job in early October, it wasn’t officially announced for almost two months. There were miles of red tape to clear up: London’s tax burdens made the IRS look lenient. All sorts of signoffs were required, up to the global division head and the general counsel of the firm. This dragged on for week after week—and in the meantime I wasn’t allowed to tell anyone, colleagues or clients.

Still, everyone knew something was going on. It’s just the way the Goldman grapevine works: slow leakage. Management almost seems to prefer it that way. My secret was a semi-open one. In November, I went back to London to speak at Goldman’s inaugural Latin America conference in Europe, hosted by the firm at the Chancery Court Hotel. As part of my mandate, I would be responsible for helping European clients get access to Latin American derivative products in addition to U.S. products.

It was a nice surprise—ten years and three months after my summer internship—to see Val Carlotti at the conference. My first days at the firm felt like a lifetime ago. And Val had come a long way from his days grilling summer interns in Open Meetings, teaching us about Goldman culture, and going out to nightclubs with us in the evenings. He was now a partner—he’d made it in 2006—and was president of Goldman Sachs Brazil. He had flown in to London from São Paulo to give the keynote address, welcoming all the investors and talking about our expanded capabilities in Brazil. It was a blast from the past, and he and I chatted and reminisced for a few minutes.

After the conference, I spent another two days in the London office with the people who’d first interviewed me. At this stage, they knew I was coming over, so they were excited—most of them were, anyway; a couple of them may have been pretending. But the paperwork still hadn’t gone through, so nothing had been announced. I also stopped by to see Laura Mehta, my old boss from New York who’d lent me her summer house in the North Fork. She was now a bigwig in London, and she was happy I’d accepted the role and was making the trek over. After the whirlwind three-day trip, I decompressed by having a Friday night dinner with my brother at a trendy Asian-fusion place called Hakkasan. He was excited that I’d soon be moving over.

I returned to New York for Thanksgiving. A few days later, my paperwork was finished at last. Beth called the whole group into a conference room and said, a little wryly, “As I’m sure many of you may have heard already, we’re sending Greg Smith to London. He’s going to build up our U.S. derivatives business there. Please join us in wishing him well. No doubt we’ll be speaking to him quite a bit.” There was a smattering of applause; you couldn’t exactly call it a surprised reaction. Beth was smiling—partly because she was genuinely happy for me; partly, I think, because she was pleased with herself for having made it happen.

I was smiling, too. At last I really knew my life was about to change.

My farewell party was held on a Thursday night in early December, at SPiN New York, the subterranean table tennis club on East Twenty-Third Street that had somehow managed, almost entirely through the aura of its owner, Susan Sarandon, to turn Ping-Pong from nerdy into sexy. Models were serving the drinks; a DJ was pumping out the latest tunes.

Goldman Sachs farewell parties, I’d found, tended to be a bit hit or miss, depending on the popularity of the person who was moving on. And at Goldman, popularity was always commensurate with value to the firm. When people who were not well regarded professionally or personally (but mainly professionally) were leaving for the Tokyo office or other employment, few people, and especially few from upper management, showed up. It could be quite embarrassing.

Fortunately, I didn’t have to be embarrassed. I was touched by the big turnout: two dozen colleagues from my desk and others. Both my immediate partner bosses, Mr. Cleanse and Beth, were there, as were Connors, who had survived his bachelor party, moved to Boston, become an MD, and was now back in New York; Bobby Schwartz; and two other MDs from the desk. I looked around for Corey in the crowd but wasn’t surprised not to see him. When it came to farewell parties, he tended to be a bit too cool for school. It was part of his elusive mystique, and I accepted it. Everyone did. Even if the farewell party was for someone very high profile, he’d be somewhere even higher profile, maybe at a movie premiere with a model on his arm.