Pressure mounts on senior bankers as discontent in junior ranks simmers

Message boards such as Wall Street Oasis and Reddit continue to be lit up with complaints from junior analysts at investment banks about long hours and the resulting impact on mental and physical health. They implore their employers to better support them.

Such demands have been put into the spotlight once more following news that a Bank of America banker with the rank of associate died suddenly in March. The tragic death of the employee, a veteran of the US special forces, has not yet been specifically tied to excessive work. But news accounts have mentioned intense 100-hour weeks leading up to his death. 

The discontent cannot be disentangled from what is going on at the top of the food chain. Pressure is also mounting on partners and managing directors to drum up the work that keeps the more junior employees in the office all night and on the weekends.

That pressure might not garner much sympathy given that these high-level financiers can make millions. But some bankers say a seemingly glamorous job of jet-setting and managing boardroom intrigue has turned into a more of a grind than ever. Employers are demanding the bagging of big fees while offering less patience than ever for falling short in any given year.

With that kind of sword dangling above, there seems little choice but to force everyone at the bottom to slog harder. Firms are merely crossing their fingers in the hope of avoiding a bad incident that ends up in the headlines and spoils the perception that Wall Street has become a kinder, gentler professional in the modern age.

Three years ago, amid an all-time deal bonanza during the pandemic, investment banking analysts complained of overwork and not enough compassion from their bosses. After a backlash, they won big salary increases, new perks and supposed protective measures to guard against burnout, including active efforts to monitor and limit hours worked.

The grievances have now returned even if the deals have disappeared. The dearth of initial public offerings and merger and acquisition activity has led senior bankers to make more pitches. Banks maintain various types of customer relationship management software to track such industriousness. Some go as far tallying email activity, calendar entries and phone call logs, said one top banker.

“It’s really the pitches and PowerPoint work that take up a ton of time and spreading comps [typing company financial data into spreadsheets] and that stuff,” said one investment banking analyst who questioned the marketing attempts’ effectiveness. “I’d also be interested to see the data on the amount of pitches per year and mandates won.”

Some banking CEOs are already musing about how AI can be deployed to lower costs and workloads, but staying top of mind with clients remains a priority even if any particular pitchbook is not that useful. One longtime banker now working at a Fortune 500 company said clients were less loyal than ever and required much more salesmanship.

Another veteran banker-turned-corporate executive said even as some banks such as Credit Suisse and Lehman Brothers disappeared from the landscape, the business remained intensely competitive. Apart from the rise of boutique firms, perpetual also-rans such as Wells Fargo have developed credible dealmaking arms.

Simultaneously, big companies themselves need external bankers less, having developed their own sophisticated internal teams that can do the financial analysis that outside bankers previously conducted.

Increasingly, boutique firms are promising managing directors a specific bounty or cut of how much they bring in during a year as a way to motivate them to run as hard as possible. Many of the larger boutiques are also publicly traded and have specific annual margin and growth targets needed to please public shareholders and keep their share prices up.

The management challenge puzzle is apparent: how to maximise results while ensuring that the machine underneath does not break down. One boutique chief executive admitted that banks had overhired in the 2021 frenzy and many had not had the “tough conversations” of telling laggards that they were not good enough to remain managing directors.

The recently retired banker was pessimistic that these incentive system tensions between junior and senior bankers could be easily resolved. The typical investment banking executive or group head ascended to that position without ever proving management skill or even curiosity in understanding human resources.

“Big revenue producers are horrible managers,” he said. “It is a real problem. Empathy, listening skills, lot of those folks don’t have it.”

sujeet.indap@ft.com