Morning Coffee: The Rothschild pay information that could soon be secret. Goldman Sachs guy who took 5 year break in better position than colleague who didn’t
If Rothschild & Co. is taken private as planned by its family holding company Concordia, it will be partly because the Rothschild family want to envelop their boutique mid-market bank in a veil of secrecy. Yes, there are share price issues (Rothschild is trading at a forward price earning ratio of just 5.5 times, compared to around 11for Lazard). Yes, the company's parts might be, "better assessed on the basis of their long-term performance rather than short-term earnings," as argued by Concordia. But as the family firm diversifies into new areas like private assets, it might also help not to have its numbers scrutinized at too closely.
Unfortunately, those numbers will include Rothschild & Co. pay. While the privately held company would still be required to register accounts with Companies House in the UK, it wouldn't be mandated to produce a breakdown of the compensation on offer to all its high earners in Europe, which would be a shame.
The most recent of these breakdowns, produced for the year ending December 2021, shows that Rothschild & Co employed eight people earning more than €1m, of whom three earned more than €3m and another three earned more than €5m. Among Rothschild's 99 material risk-takers (typically senior, high earning staff whose actions can present a material risk to the bank), average pay went from €782k ($837k) in 'corporate functions' to €977k in the asset management unit.
Of course, this says nothing about pay for the rank and file at Rothschild, but it is something to aspire to. Come 2024, people applying to Rothschild may have to take it as read that the firm pays well - like Wonka's Chocolate Factory, the firm will be closing its doors to the public.
Separately, Harvey M. Schwartz is back and presumably has a spring his step after what appears to be a five-year break since David Solomon beat him to the top job at Goldman Sachs.
58-year-old Schwartz, who is expected to appear at a Carlyle town hall on Monday morning, will assume his new role in mid-February and is expected to "accelerate and advance" a diversification plan that includes a push into real estate, infrastructure and credit-based investments.
It could be a big lift, but Schwartz should be well-rested. David Solomon may well look at his erstwhile competitor wistfully: he's spent the past five years trying to grow Goldman's loss-making retail banking platform, and is now being vilified for the hobby that occupies his downtime.
Meanwhile...
Credit Suisse has cancelled bonus meetings for some of its directors and MDs. They won't be happening today after all. (Bloomberg)
Barclays is also shaking up it equities division. Paul Leech and Todd Sandoz, who ran the equities sales and trading business since 2021, are leaving and Stephen Dainton will be running the unit on an interim basis. (Bloomberg)
Bank of America cut CEO Brian Moynihan’s compensation by 6.3% in 2022 — to $30m, from $32m. (Banking Dive)
Jefferies banker Max Jones is joining Liberum to lead its team focused on technology and media deals. (Financial News)
Japanese trading company Mitsui & Co will now allow its employees to pursue side-careers like being a YouTuber. (Bloomberg)
If revenues don't pick up, City job cuts will come thick and fast. However, there is circumspection about cutting too wildy: “It seems likely that the labour market will remain pretty tight so I think some firms will be more cautious about cuts than they would have been historically.” (Financial News)
If you place a 5-foot-tall pumping water feature at the southern side of the office for the year, it will be good Feng Shui for 2023. The same applies to red-coloured objects on the south side of the office. (WSJ)
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