Goldman Sachs Group salesman publicly accused the firm of ripping off its clients
Greg Smith, the former Goldman Sachs Group Inc. (GS) salesman who publicly accused the firm of ripping off its clients, was denied a raise and a promotion in the weeks before he resigned in March, documents provided by Goldman show.
Smith, 33, told one of his managers in a December 2011 meeting that he expected to earn more than $1 million a year, about double what he was making at the time as an executive director in London, according to a summary of Goldman Sachs's investigation into Smith's claims. He also said in the meeting that he wasn't advancing up the corporate ladder fast enough and expected to win the promotion to managing director he had repeatedly stated as a goal in self-evaluations.
His bosses were incredulous. New York-based Goldman Sachs, the fifth-largest U.S. bank, was about to book its second-lowest profit in a decade and that year had eliminated almost a tenth of its workforce -- 3,400 jobs. The equity-derivatives desk Smith worked for in London had been told that compensation would be down "significantly," according to the firm's summary.
"Greg Smith off the charts unrealistic, thinks he shld [sic] trade at multiples," one of Smith's managers wrote in a January 2012 internal e-mail after informing him that his raise request and demand for promotion had been turned down.
Two months later, Smith made one of the most public exits in Wall Street history, announcing his resignation in a scathing op-ed in the New York Times entitled "Why I Am Leaving Goldman Sachs." He called the environment at the firm "toxic and destructive," said senior staff referred to clients by the derogatory term "muppets" and blamed Chairman and Chief Executive Officer Lloyd Blankfein and President Gary Cohn for "a decline in the firm's moral fiber."
Smith has since documented his views and experiences in a 276-page book, "Why I Left Goldman Sachs." Published by Grand Central, it'll be available for purchase Oct. 22.