From the monthly archives:

March 2011

Social networks like Facebook, LinkedIn and others can be a double-edged sword when it comes to snaring an investment banking job. Yes, they may help you expand your network dramatically, enabling you to contact someone inside your target investment bank that you might not otherwise have reached.

But as Joy Chen, a former L.A. Deputy Mayor who’s now turned into a global recruiter points out, your online presence can quickly sink your chances of landing an investment banking job as well.

She cites a couple of extreme examples in an article for Huffington Post. In the first, UCLA student Alexandra Wallace apparently posted a video on YouTube ranting about the “hordes of Asian people” in the UCLA library who annoy her by using their cell phones to check on family members impacted by the recent tsunami in Japan. She quickly took down the video, but it had already gone viral, and has now been viewed by millions. Good luck to her when any prospective employer Googles her name for a background check.

A second example was a student who was hoping to be an investment banker. In a careless, emotional moment on Facebook, he posted a status update that said: “Shit, I just FLUNKED by finance exam!”

Now you are undoubtedly too smart to ever commit such boneheaded moves as these two individuals. But Chen’s point is simply this: nothing, nothing you ever do online should ever be considered “private.”

Even if you’ve dialed down your privacy settings on Facebook, who knows when their policies might change. And everything you post in your online networking sites can be seen by your professional network. Who knows what they will pass along?

As Chen says, “You’re hoping that people in your network will refer you to awesome i-banking internships offered by people in their networks, should you really be broadcasting that you’ve just flunked your finance exam?”

Instead, keep things positive. Always assume that the one single comment you just happen to post online in a fit of drunken rage could very well be the one item that shows up on a prospective interviewer’s computer, when they check out your background.

Your online presence is your image. That should make you pause and rethink things, before your next careless post online. 

Food for thought? Add your comments below.

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More than two years after the financial crisis, compensation at jobs for major investment banks is still robust, and growing. Total Wall Street pay was up 6 per cent last year, with an average cash bonus of nearly $130,000, according to the New York state comptroller’s office, as reported in the Financial Times.

The Times also noted that Bob Diamond, a Barclay’s Bank executive and the UK’s highest-paid bank boss on a salary and bonus basis at £6.75m ($10.88m) in 2010 was still only the Bank’s fourth-highest paid executive officer. Two of his top officers, Jerry del Missier and Rich Ricci, took home more than £40m each in salary, bonus and share awards.

Despite the public and political backlash against enormous compensation packages for bank executives, the practice remains largely intact. And for good reason, says some experts.

Sir Philip Hampton, chairman of Royal Bank of Scotland, says the principles underlying robust bank compensation are sound.

“There is a big objective reason why you pay people the way you do in banking: this is a serious professional job where people handle almost unimaginable amounts of money,” he says. “Many banks will have balance sheets worth more than £1,000bn. That means that a single individual could be responsible for, say, £50bn of assets. With that proximity to such large sums, you want to make sure that your money is being properly looked after.”

Perhaps more than an elevated sense of responsibility, though, it may come down to fierce global competition for the top investment banking job talent. It’s impossible for one bank to lower pay and hope to attract the best of the best, argues the Times. Industry professionals are highly mobile, and can move from London to New York to booming Asian cities, wherever the best opportunities present themselves.

So far both European and U.S. regulators’ attempts to curb compensation have mostly resulted in limitations on the cash component of bonuses. Or required that senior executives defer a portion of their bonuses for a few years to limit short-term risk-taking, or so the theory goes.

Some say the only downward pressure on compensation will come from either a downturn in the economy, more stringent capital requirements on banks, or the fact that they are pulling back from some of their more risky (and previously profitable) business lines, such as proprietary trading.

Investment banking compensation is robust and growing. Do you think it will continue in this direction? Add your comments below.

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The long hours and constant pressure of working as a junior analyst at an investment banking job can wear down the most determined young banker. The pressure is even greater on young women, writes Nina Godiwalla in a new book entitled: Suits: A Woman on Wall Street,” recently published by Atlas.

In it, she details many of the excesses of Wall Street firms, along with the rampant gender discrimination that women face and which prevents all but a handful of women from reaching senior executive levels.

Godiwalla talks about the old-boy network that still thrives in large investment banks. “Part of it is a class thing. A lot of the people around me had grown up talking about their private schools, summer camps, country clubs. A lot of times people like to exchange information about their lives – whether they’re going to St. John or St. Maarten this year – and that’s challenging when you don’t have that background,” she said in an interview with DealBook during her recent book promotion tour.

It points out a key aspect of landing that elusive investment banking job. “I don’t think people intentionally tried to make me feel excluded. But so much of this business is about relationships. When we recruit, we call it “fit,” which basically means, “Do I get along with this person?” And a lot of the time, if you have common friends or went to the same private school as somebody, it makes it much easier to get along,” Godiwalla said.

Investment banks have not done the best job at creating an environment where women and minorities feel welcome, Godiwalla says. She cites instances where women have been pulled off of major deals on a client’s whim and senior management at the bank went along with the request. The glass ceiling for executive level positions still exists. And Godiwalla feels that many young professional women of her generation may not have the patience to deal with these attitudes today, when there are so many other career options out there.

What advice does she give a young person hoping to enter investment banking today? Go into the experience with your eyes wide open. When you take an investment banking job, you will be making sacrifices in other areas of your life. If you know what all that is in advance, you may be better prepared for the demands of the job. “That’s the message of this book: I’ll tell you what I went through, and if you’re willing to do that, if you can navigate it better than I did, then more power to you.”

Are you a woman working in investment banking? What advice would you give? Add your comments below.

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An Infomercial for Your Next Investment Banking Job?

March 7, 2011

Many investment banking job candidates still take a passive approach to their job search, sending out dozens of resumes and waiting for the phone to ring. But you can turn the tables and take a more proactive approach says recruiter and consultant Jim Beqaj, in a new book entitled, “How to Hire the Perfect Employer: […]

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