A Possibly Bullshit Theory on the Cosmic Meaning of Goldman Partnerships

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The biennial Rite of Riches is here again: Yesterday, Goldman Sachs unveiled its new partner managing directors — 115 of the lucky bastards. It's the finance world's ultimate prize, not least because PMDs get a share of the firm's revenue. Based on Goldman's projected 2006 intake of $36 billion, these hard-working ladies and gentlemen stand to rake in about $9 million apiece this year alone. It's a cause for celebration, of course. But it's also a reason to polish up résumés. Because unlike at practically every other company in the world, when you reach the top of your game at Goldman, it's the exact moment you start contemplating your next job.

Why? First and foremost, because the PMDs have done what they came to do. They made it to the apex, they're rich beyond belief — and it's really hard work. Why keep the same ridiculous hours, in the same mind-numbing meetings, if you don't have anything left to prove? Instead — and this is point two — these type-A personalities need a new challenge; don't be surprised to find some of them planning things like marathons along the Great Wall of China. And, third, the truth is the new PMDs really can't hang around too long. The secret to keeping the Goldman brass ring so shiny is high turnover in their partnership ranks. There are only 287 current partners, 115 new ones were just announced, and there's a new partnership class every two years. They've got to get out, or the money gets disbursed too widely. So you get to keep your snout in the money trough for a half decade, and then you're shown the door if you haven't already left of your own accord. So why not leave on your own? Finally, there's the tradition of entering the public sector after you've been a Goldman heavy. Think Bob Rubin, Jon Corzine, or Hank Paulson. Wall Streeters like to think they're the smartest people in the world, and in some cases, that's even true. But what's nearly always true is that they're the most buttoned-down, "do what you're supposed to do" people you'll ever meet. If they start to get the feeling that they're supposed to give back, you can be sure they'll all be making that call to their respective heads of state.

But, ultimately, it's really just because they're already rich. And they did what they came to do. You'd be hard-pressed to name another firm that's produced more retirees in their 40s than Goldman Sachs. Indeed, it's just one more record these overachievers can lay claim to.

Duff McDonald

Goldman Names 115 Partner Managing Directors [Reuters]
Please, Sir, I Want Some More [NYM]