NY Finance Culture vs. Baltimore Finance Culture
The internet was abuzz this week about former Goldman Sachs employee Greg Smith’s op-ed in The New York Times, “Why I am Leaving Goldman Sachs”, about the “toxic” culture at the New York investment bank, characterizing it as self-interested, lacking humility and money-first. (If you’ve been in coma and missed the story, see the animated version in the video, above, by Taiwanese animation studio NMA.tv.)
How does the culture of New York’s financial institutions compare to the culture of financial institutions in Baltimore?
We asked a few Baltimore financial types to give us their view, anonymously, of course. (They’ve seen the beating Greg Smith’s reputation has taken since he fired off his missive a little more than 48 hours ago.) You’ll be glad to know, though we may not have anyone taking home tens of millions in pay like Goldman CEO Lloyd Blankfein — whose 2006 compensation package was over $54 million — we don’t have the grotesque culture that goes along with it either, they said.
“Maintaining culture in a company is an everyday, 24/7 commitment,” said one T. Rowe Price veteran. “It comes from the top and if the leadership does not push it, it erodes.”
Speaking of T. Rowe, another moneyman said, “There’s no culture of celebrity there, no portfolio managers with public personas,” which, he adds, discourages me-first values. To know the culture of any financial institution he suggests asking how the leaders decide compensation. “Do the people who makes the most money for the firm get paid the most? Are they put into positions of leadership? That says a lot about the values of the company.”
Although Legg Mason has had its share of celebrity investors, (former Legg investor Bill Miller comes to mind…check out his Wikipedia page) it still gets praise for the client-oriented values insisted upon front the top-down. “The culture at Legg Mason is the polar opposite of what was described about Goldman in the New York Times,” said one Legg Mason insider. He credits company founder Chip Mason with setting the tone. “The senior leadership at Legg has focused entirely on behaving with honesty, integrity and putting clients’ interests first. These principles were articulated constantly by Chip Mason and his team, and more importantly, their behavior has comported entirely with these principles.”
Is there’s something just about Wall Street that breeds this type of financial aggressiveness?
“The time horizon on Wall Street got very short,” said one Baltimore investment management executive. “With the kind of money they were making, you could walk away in disgrace, but with $100 million in the bank,” and for some, it’s worth the risk. Really good companies with good culture, he said, stress a long-term orientation.
An investment banker at an autonomous local hub of a New York firm agrees: “Folks that operate in regional financial centers tend to be more grounded, more client focused and less wealthy,” he said.
Baltimore’s Alex. Brown & Sons, the country’s oldest investment bank when it was taken over by Bankers Trust in the 90s, had a motto: “Client first. Firm Second. Individual third.” Those values may be quaintly antiquated on Wall Street, but in Baltimore they still matter.
For more perspectives on the op-ed:
Why I am Leaving the Empire by Darth Vader – The Daily Mash
Why I am Joining Goldman Sachs by Alexandra Petri – The Washington Post
Why I am Quitting Tobacco by Don Draper – The New York Times (okay, Mad Men, but go with it…)