Goldman Hits Back at Ex-Staff who Denounced the Bank’s “Toxic and Destructive” Culture
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Goldman Sachs has moved to combat ex-banker Greg Smith’s vitriol against the bank’s apparent “moral bankruptcy”. In a feisty nine-page report published yesterday, Goldman Sachs alleged that Smith quit not because he felt the company had “lost its way” but rather, he felt he wasn’t sufficiently compensated for his work.
Goldman Sachs has hit back at ex-employee Greg Smith who resigned publicly in March via a scathing op-ed in the New York Times.
Goldman Sachs has moved to combat ex-banker Greg Smith’s vitriol against the bank’s apparent “moral bankruptcy”. In a feisty nine-page report published yesterday, Goldman Sachs alleged that Smith quit not because he felt the company had “lost its way” but rather, he felt he wasn’t sufficiently compensated for his work.
Goldman Sachs has hit back at ex-employee Greg Smith who resigned publicly in March via a scathing op-ed in the New York Times.
Smith, in writing, had criticised Goldman’s “toxic and destructive” culture as the primary reason for his resignation and accused the bank of losing its “moral fibre”.
In the widely read and discussed letter, Smith, who was head of the firm’s US equity derivatives business in Europe, Middle East and Africa, also accused the bank of putting profits ahead of its customers’ interest and forsaking the culture that “made this place great and allowed us to earn out clients’ trust for 143 years.”
Smith’s article wiped $2.15 billion off the bank’s market value as it threatened to reignite public criticism of treatment of clients that had emerged in the wake of the 2008 financial crisis. The loss was recovered in less than a week.
However, in a twist, Goldman yesterday released a scathing nine-page report of an internal probe following Smith’s op-ed and alleged that Smith quit after being denied a raise to $1 million. Smith received $700,000 in pay, including a $500,000 bonus.
Goldman Sachs investigated Smith’s claims in the article and “found no evidence to support them,” David Wells, a spokesman for the company, said yesterday in an e-mail.
Goldman’s investigation also portrays Smith as an underachiever with an inflated ego who was frustrated because he wasn’t earning nearly as much as his peers after 12 years with the Wall Street bank.
According to excerpts of the investigation provided earlier to Bloomberg and confirmed by Goldman Sachs, Smith ranked in the bottom half of the firm in internal evaluations, and was denied a promotion to managing director just two months before he left. An internal email, allegedly from one of his managers, suggests he reacted badly to this news.
Incidentally, Greg Smith’s tell-all book “Why I Left Goldman Sachs: A Wall Street Story” will be released this Monday.
Goldman’s chairman and chief executive Lloyd Blankfein, who has been trying to rehabilitate the firm’s image, told CNBC last week that he’s “not looking forward to the hoopla” that will surround the book’s publication.
