Seven-Figure World Wonder

sakky
Sun, 16 Apr 2006 11:15:33 +0000

Five years down the road, when the associate contract has expired, only 2 of these 5 will be promoted to the VP level. These VPs might stay VPs forever (most get a large bonus for quitting when they reach middle age though). Plently of time will pass until the partners find the most competant VPs to be promoted to the MD level. Lets say they took 5 years to find an MD. These 7 figure stars are 1 in 50,000.



I believe that a logical mistake was made here. You seem to be presuming that only those 5 people who worked for GS as analysts will be able to become associates. Just off the top of my head, I can name 5 people graduating from MITSloan who were offered associate positions at GS (although they won’t all take the offer, for example, I know at least one of them has turned down GS to enter a doctoral program). None of these people had ever worked for GS before. And that’s just the people I can think of right now, and just at Sloan. If I include HBS, that will obviously include plenty more people.

Also, you presume that if only 5 people are offered thee opportunity to hang on for their 3rd year and then get their MBA’s paid for, that the other 20 are out of the industry. Hardly so. Many of them will get their MBA’s (paid for by themselves) and then become banking associates. Just because you don’t get picked for that 3rd analyst year doesn’t mean that your banking career is over. Far from it, in fact. I know a number of people who never got an offer for a 3rd year and yet are graduating from B-school and going right back into banking. Some of them are going to GS.

Furthermore, the biggest factor you are neglecting is that you don’t have to work at GS. GS is not the only game in town, you know. There are a number of other bulge-bracket banks. You might not get hired at GS, but you might still get hired at MS or ML or one of the others. You can become a millionaire at those places too. In fact, GS is actually one of the LOWER paying bulge-bracket banks precisely because GS knows that people will take lower pay from them just to get the prestige of working for GS, because they know that prestige can translate into greater pay from some other bank down the road.

Look, we all agree that banking is a tough industry. Nobody disputes that. But there’s no need to overplay the difficulty,