FORMER GOLDMAN PARTNER: Board Needs To Ask A Heck Of A Lot Of Questions After That Op-Ed Before Collecting Another Paycheck

Jacki Zehner


A former Goldman Sachs partner responded to Greg Smith’s infamous NYTimes resignation letter on her blog saying the board should be held accountable for evaluating his claims about cultural changes at the firm.Smith, who up until last week was an executive director at Goldman, described the firm in his op-ed as “toxic and destructive” and slammed the culture under Lloyd Blankfein saying that the firm puts making money over clients. He also claimed that five different managing directors referred to their clients as “muppets.”  

The blogger Jacki Zehner worked at the Goldman for 14 years before leaving in 2002.  During her tenure, she said she had the honour of serving on the Partnership Committee where she witnessed promotions.  One thing that would piss her off was when “jerks” who may have performed better commercially were promoted over those who were “culture carriers” but who were less strong commercially.

Zehner, who acknowledged cultural changes during her time at the bank, said her sources have told her Goldman has changed in recent years. 

Many people over the past few years have told me that Goldman has increasingly become tilted towards the money side at the cost of the firm’s character. I cannot tell you the number of times I have heard ‘Goldman is not the place it was’ and that truly breaks my heart. Mr. Smith was right in saying that a trajectory of descent occurs over time when more and more people are promoted who are not good culture carriers. It that is the case, then correcting this will also take time by weeding out the toxic people, and promoting ones who are BOTH commercially and customer-oriented.

In her blog, she also pointed out that it’s unfair for Smith “to paint all people who work at Goldman, or Morgan Stanley, or any other firm with the same brush.” 

I also have to make this point: Mr. Smith likely does not know even the tiniest fraction of the 30,000 something people who work at the firm, the majority of whom are a long way from the trading floor in Europe or anywhere else. The vast majority of people do their job in a deeply respectful way. It is just not right or fair to paint all people who work at Goldman, or Morgan Stanley, or any other firm with the same brush. Most don’t make a million dollars a year and most are not ‘masters of the universe.’  Most are just normal, good people who chose a career in finance when that was a really acceptable thing to do.  It seems to me that Mr. Smith is really speaking to the ‘five different managing directors’ who he has had deep interaction with and the upward chain of command that promoted them to those positions. Maybe he is also talking about the trading businesses in general but he is certainly not talking about the 1,200 people who live and work in Salt Lake City? Has he ever even been there?

Zehner, who said she does not know Smith or anyone who does, thinks the board has a responsibility to investigate his claims. 

So what now? Will this article have consequences? I hope so. These are very serious accusations from a credible person in my view and I hope it does indeed provide a ‘wake-up’ call to the board of directors. It is their responsibility to ensure that promotion and compensation decisions are not divorced from peer reviews and customer feedback. It is their responsibility to ensure that traders, and especially ones who do not have the best interests of clients in mind, do not dominate the firm. It is the board that is accountable to the shareholders and before they take another paycheck, I hope they ask a heck of a lot of questions and get honest answers. If those answers do not reflect the kind of behaviour reported by Mr. Smith, then they would have done their job, this story will fade, and Goldman will go about its business for another 143 years. If the answers are the opposite, heads should roll.

I am not defending Goldman nor am I attacking them. I just cannot as it is just way too personal for me. At times, in private conversation, I can be their most passionate supporter, and at other moments, their worst critic. Both come from a place of wanting Goldman to be what it was, and what it could and should be. Thoughts of parenting come to mind.

She ended her piece with a personal message for Smith.

To Mr. Smith: If what you described in your OpEd was indeed your honest and unembellished personal experience, you were right to quit, and it was very brave to put yourself out there. If not, and you are a disgruntled employee who wants his moment in the sun, shame on you. Either way, as you did currently state, without clients they will not make money, or at least make a heck of a lot less.

Read Zehner’s full blog post here >>

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