5 ms·

Heaven forbid some trader (probably under management direction) have a bad quarter and threaten the partners' profit payouts. I guess you don't have to worry a

by scurvy 10y ago

Heaven forbid some trader (probably under management direction) have a bad quarter and threaten the partners' profit payouts. I guess you don't have to worry about morale in a place like GS, where 5% of the workforce is laid off every year. Everyone there has bought into the dog-eat-dog workplace before starting.

cordite 10y ago
That's not how the recruiters made it out to be, though they do provide good food at university promotions.
JumpCrisscross 10y ago
Goldman Sachs paid 37 and 38 percent of its revenues to employees in 2013 and 2012, respectively [1]. That is on par with America's recent 44 percent wage share of GDP [2]. [1] http://www.bloomberg.com/news/articles/2014-01-16/goldman-sachs-cuts-pay-ratio-to-second-lowest-as-public-firm http://www.bloomberg.com/news/articles/2014-01-16/goldman-sa... [2] https://fred.stlouisfed.org/graph/?g=2Xa https://fred.stlouisfed.org/graph/?g=2Xa
- deleted 10y ago
  [deleted]
- fweespeech 10y ago
  .44 * .85 is 37.4. 15% below average is not on par imo. For many people on HN or at GS, that is basically the tco for their a car every year (at a minimum).
  - dandermotj 10y ago
    It depends on what the variance of the distribution is and how skeweded it is.
epx 10y ago
5% is a low number these days.
- Gibbon1 10y ago
  Not sure might be they stack rank and fire the 'bottom' 5%
  - ciaranm 10y ago
    That's exactly what they do. It's heavily based on performance evals. I remember the first year I was there, we were told it'd be around an 8% cut. Our team lost exactly that 8% in headcount.
    - lloyd-christmas 10y ago
      Reduction is different than the annual culling.
atemerev 10y ago
It depends. Each company makes the rules here explicit and visible, as it is the most important thing for any trader. E.g. at BlueCrest, each trader used to start a year with clean track record and some allocated capital. If you lose 2%, your allocation is halved. If you lose another 2%, you are out. However, if you won 5%, you can risk it, only the initial allocation matters. For me, this policy is strange, as it clearly incentivizes people to take more risks at the end of the year (and risks are the currency here, you don't want to be predictable), so I assume the policy is different now. But it is always explicit.
- qwrusz 10y ago
  sorry just curious why you say this policy incentivizes more risk at the end of the year? is there an upside? explicit bonus/P&L part of it?
  - atemerev 10y ago
    Because at the beginning of the year, you have to be extra careful and take more cautious trades to not step outside your 2% loss limit, but at the end of the year, assuming you are successful, you can afford e.g. 5% loss limit, as you have already made 10% in profit, so you are able to engage in more risky trades. As this policy were made public at some point, and you usually don't disclose your working risk management profile to the outside world (as it can and will be analyzed and exploited), I can assume that BlueCrest now uses a different approach internally.
    - qwrusz 10y ago
      Got it. Thanks. The assuming successful by end of the year is an important part. At the same time, some traders hit a profit number during the year they are happy with and then try to lock it in, choose to go risk off and just coast till the end of the year. Especially if a trader feels they don't get paid for risk towards year end - this option is even more attractive. Assuming the goal is to make profit and not just don't get kicked out. Traders who got lucky mid year not taking enough Q4 risk happens. Some firms step in if they see too little risk from a desk. Very few funds are able to keep risk management info private for very long. People move. People talk. Some trading rules can be reverse engineered in data but this is easily spoofed. BlueCrest closed last year and returned outside capital, so I agree things probably look very different there now.
__jal 10y ago
The partners used to just recycle underperforming minions into cafeteria slurry. What you're seeing is them going soft. ('sa joke.)

by scurvy 10y ago

cordite 10y ago

That's not how the recruiters made it out to be, though they do provide good food at university promotions.

JumpCrisscross 10y ago

Goldman Sachs paid 37 and 38 percent of its revenues to employees in 2013 and 2012, respectively [1]. That is on par with America's recent 44 percent wage share of GDP [2]. [1] http://www.bloomberg.com/news/articles/2014-01-16/goldman-sachs-cuts-pay-ratio-to-second-lowest-as-public-firm http://www.bloomberg.com/news/articles/2014-01-16/goldman-sa... [2] https://fred.stlouisfed.org/graph/?g=2Xa https://fred.stlouisfed.org/graph/?g=2Xa

deleted 10y ago
[deleted]
fweespeech 10y ago
.44 * .85 is 37.4. 15% below average is not on par imo. For many people on HN or at GS, that is basically the tco for their a car every year (at a minimum).
- dandermotj 10y ago
  It depends on what the variance of the distribution is and how skeweded it is.

epx 10y ago

5% is a low number these days.

Gibbon1 10y ago
Not sure might be they stack rank and fire the 'bottom' 5%
- ciaranm 10y ago
  That's exactly what they do. It's heavily based on performance evals. I remember the first year I was there, we were told it'd be around an 8% cut. Our team lost exactly that 8% in headcount.
  - lloyd-christmas 10y ago
    Reduction is different than the annual culling.

atemerev 10y ago

It depends. Each company makes the rules here explicit and visible, as it is the most important thing for any trader. E.g. at BlueCrest, each trader used to start a year with clean track record and some allocated capital. If you lose 2%, your allocation is halved. If you lose another 2%, you are out. However, if you won 5%, you can risk it, only the initial allocation matters. For me, this policy is strange, as it clearly incentivizes people to take more risks at the end of the year (and risks are the currency here, you don't want to be predictable), so I assume the policy is different now. But it is always explicit.

qwrusz 10y ago
sorry just curious why you say this policy incentivizes more risk at the end of the year? is there an upside? explicit bonus/P&L part of it?
- atemerev 10y ago
  Because at the beginning of the year, you have to be extra careful and take more cautious trades to not step outside your 2% loss limit, but at the end of the year, assuming you are successful, you can afford e.g. 5% loss limit, as you have already made 10% in profit, so you are able to engage in more risky trades. As this policy were made public at some point, and you usually don't disclose your working risk management profile to the outside world (as it can and will be analyzed and exploited), I can assume that BlueCrest now uses a different approach internally.
  - qwrusz 10y ago
    Got it. Thanks. The assuming successful by end of the year is an important part. At the same time, some traders hit a profit number during the year they are happy with and then try to lock it in, choose to go risk off and just coast till the end of the year. Especially if a trader feels they don't get paid for risk towards year end - this option is even more attractive. Assuming the goal is to make profit and not just don't get kicked out. Traders who got lucky mid year not taking enough Q4 risk happens. Some firms step in if they see too little risk from a desk. Very few funds are able to keep risk management info private for very long. People move. People talk. Some trading rules can be reverse engineered in data but this is easily spoofed. BlueCrest closed last year and returned outside capital, so I agree things probably look very different there now.

__jal 10y ago

The partners used to just recycle underperforming minions into cafeteria slurry. What you're seeing is them going soft. ('sa joke.)