- Goldman Sachs is gearing up to name a new class of partners.
- The process is rigorous, but those who make the cut get access to special perks and privileges.
- Here’s a look inside one of Wall Street’s most exclusive clubs.
As soon as next week, several dozen Goldman Sachs employees will receive the honor of a lifetime: Being named a partner of the prestigious Wall Street bank.
Every two years, usually in the first week of November, Goldman promotes its top traders, investment bankers, and wealth managers, as well as employees in tech and compliance, to its vaunted partnership.
The competition is intense. Making the cut requires years of hard work and months of internal lobbying. Just a fraction of Goldman’s roughly 45,000 employees make it in the exclusive club, which has been getting smaller under CEO David Solomon. While the total size of the partnership has fluctuated over the years, it has ranged between roughly 400 and 450 partners since 2020, according to reports.
“It’s the pinnacle of your career,” Paul Argenti, a former advisor to Goldman who now serves on the faculty of Dartmouth College, told Business Insider. “That’s where you want to be — that’s the top of the ziggurat,” he added. “Everybody’s trying to get there.”
Goldman’s partnership dates back to a time when its leaders contributed their own capital to help run the firm. The company is now publicly traded, but its partnership still carries influence.
The perks alone make it enough to salivate over — such as a base salary of about $1 million per year, which can swell by multiples when factoring in year-end bonus comp.
Over the coming months, Citigroup, Morgan Stanley, Bank of America, and more will also announce the newest members of their top ranks, who usually carry the title of managing director.
BI spoke to Argenti and a former partner at Goldman to get a look inside the partnership promotion process, from what it takes to make the grade to the perks and privileges that come with the title. They also shed light on what this year’s class might look like and what its makeup could say about the priorities of the 150-year-old bank.
“Making partner at Goldman Sachs is a rigorous and competitive process,” Goldman spokesperson Tony Fratto said in a statement. “No one outside of our firm or the partnership has any insight into what decisions will be made. If you’ve heard anything, it’s nothing but pure speculation.”
Inside the process
The process — known internally as “cross-ruffing — can take months of vetting. Nominees must participate in a series of interviews by partners from divisions other than their own to minimize the potential for bias.
People who have worked with the nominee are also interviewed. The former partner recalled a senior official explaining it this way: “I know more about you than you know about you. I’ve talked to 25 people about you for 50 hours.”
Candidates who garner the most support are passed on to the partnership committee, which conducts another round of reviews.
“There’s always a battle over the last handful of people,” the former partner said. “There’s a bunch of people who are seemingly deserving and qualified that don’t make it.”
The perks and gravitas
Goldman partners carry a lot of influence internally and can even shift the CEO’s position on important directional matters.
“Their ability to set policy and weigh in on strategy and influence the decision-making of the CEO is pretty profound,” Argenti explained. “It would be pretty hard for the CEO to operate without the consent of the partners.”
Goldman’s partners sit on influential leadership committees and run teams that are worth millions or billions of dollars to the bank’s bottom line. They get access to special perks, including a partners-only bonus pool and opportunities to invest fee-free in the bank’s investment funds.
In the past, they’ve received one-time bonuses that have added millions to their already generous annual incentive comp. They can also help direct the bank’s philanthropic spending through Goldman Sachs Gives, which the company says has granted $2.5 billion to more than 10,000 nonprofits. Plus, there’s a special wealth-management desk dedicated to helping them keep track of their money.
One of the most notable perks, though, might just be the doors that can open for Goldman partners.
“Random people will infer characteristics about you — integrity, commercial acumen, intelligence, teamwork — simply based on the fact that you are, or were, a Goldman partner,” said a former member of the group who was quoted in the British publication Financial News in 2020.
Partners who leave become members of the bank’s alumni network, and may jockey to be invited to annual dinners in New York and London, the ex-partner told BI.
“People would lobby” to be there, this person said adding that “sometimes people who left not on good terms wouldn’t be invited.” This was a point of contention under previous administrations, but Solomon has sought to change that by opening the dinners up more broadly, the person said.
Reading the tea leaves
The makeup of a class can say a lot about the firm’s ambitions and objectives. This year, industry insiders predict an outsized number of promotions from the investment-banking division.
Last quarter, dealmaking helped drive a 45% jump in profits. IB fees, specifically, were up 24% over last year.
“You tend to reward the people who are performing,” Argenti said, adding that promotions can say a lot about “where the bank’s energy is going.”
Since Solomon took over as CEO in 2018, he has also been shrinking the size of the partnership in a bid to make it more exclusive. In the last round of partnership promotions, the partner class saw just 80 new admits, which was slightly up from 60 in 2020.
The former investment banker and partner expects to see something in between the two this year, citing what appears to be “a reasonably big backlog of business” at the firm.
One area to watch will be the number of partners from underrepresented groups as Solomon has made diversity a priority.
Earlier this year, Goldman’s leaders vowed to do better after a Wall Street Journal report raised questions about whether the firm’s top brass had done enough to help advance female partners.
“Progress has been slow and we realize we need to do more to accelerate positive change,” the bank’s chief of staff Russell Horwitz wrote in a memo obtained by BI. “We will continue to focus on our talent development, retention and advancement initiatives.”
People have described becoming a partner at Goldman as an incomparable rush — but the former banker warned that the honor also comes with heightened expectations.
“It’s this amazing accomplishment for a second and then you exhale and you realize, ‘Holy shit. It’s just the starting line,'” this person said. “That’s where your career really starts.”
Are you a Goldman Sachs insider? Get in touch with this reporter. Reed Alexander can be reached via email at ralexander@businessinsider.com, or SMS/the encrypted app Signal at (561) 247-5758.
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