Josh Birnbaum Made $10 Million At Goldman And Left Because It Wasn’t Enough


In the Goldman expose “Money and Power,” William Cohan, the author, interviews Josh Birnbaum, who helped Goldman build a $3.7 billion short against the subprime market.

Birnbaum’s team’s trade was huge and saved Goldman tons of money, as he detailed in his self-review from that year, which everyone at Goldman fills out in order to argue the highest bonus possible for themselves.

Birnbaum isn’t modest in the review, and he wasn’t either when he was explaining to Goldman execs in 2007 the huge trade his team was doing. “The shorts were not a hedge,” he told them, specifying that he was making a directional bet and not just “hedging” the banks’ position because of mere due diligence. The distinction is important for Birnbaum’s future career.

Birnbaum was probably a star at Goldman but, a year after the $3.7 billion short, he wasn’t named partner. So he left the firm. Filling in the blanks is easy enough, but thanks to Cohan’s book, we know exactly how much (or little) Birnbaum got in his bonus that year before he left: $10 million.

The $10 million wasn’t enough for Birnbaum, so he left to start a hedge fund, Tilden Park.

The full interview with Birnbaum is posted on the Financial Times.

Here’s the relevant quote:

“I guess it depends on your perspective of what’s fair, right?”

“If you’re a steelworker, you probably think I got paid pretty well. If you’re a hedge fund manager, you probably don’t.”