Goldman Sachs, Citigroup Hires Signal New Opening For Top Bankers
Two big-name appointments at the nation's largest banks are lighting up the formerly fading financial recruitment landscape.
Wednesday, Goldman Sachs announced it appointed former Securities and Exchange Commission Chairman Arthur Levitt as an adviser on public policy, while Citigroup nabbed Morgan Stanley dealmaker James von Moltke to head its corporate mergers group in New York, according to Reuters.
The appointments break a chain of big banks losing their shine among the financial industry's highest-level players. Earlier in the year, a series of departures by top management for smaller, private firms set off a panic wave across the industry that banks who had accepted TARP funds would be unable to remain competitive under stringent government-led compensation guidelines.
Under the surface, these two new appointments look as if they are specifically geared towards a strategy of the banks being led to pay back government loans faster.
At Goldman Sachs, Levitt's newly-created advisory role in the area of "public policy" leaves little doubt that the former SEC Chairman is there to ensure a smooth payback of the government loans made to the bank late last year.
The New York Times DealBook reports:
"He will be a good source of advice," Lawrence White, an economics professor at the Stern School of Business at New York University, told Reuters. "He knows a lot of people in government, so it won't hurt on the lobbying side. Who knows what they are paying him? But I'm sure they are getting their money's worth."The Levitt appointment may also a signal a firmer commitment by the bank to expand its reach in the area of private equity, since Levitt is also an advisor to private equity giant Carlyle Group.
At Citigroup, Von Moltke's appointment is designed to ensure the best possible sale of assets under the bank's newly-formed Citi Holdings unit, which houses businesses the bank intends to sell or wind down soon. At Morgan Stanley, Von Moltke covered brokerages, exchanges and financial technology companies.
The two new hires signal a potential opening in the recruitment space for big-name employees in the financial services industry: namely, bailout turnaround artists. By arguing that they are making appointments to ensure the swift payback of government funds, banks can probably sneak such hires past the newly stringent compensation rules imposed by officials, too.
Expect to see similar appointments and undisclosed stock-based compensation packages making headlines in coming weeks.
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