When 36-year-old Daniel Michalow, who was working as a portfolio manager for hedge fund DE Shaw, declared in 2018 that he’d quite like an assistant he could call “sugar tits,” it was supposed to be a joke. It was a Mel Gibson impression, suggested Michalow. But another assistant heard the comment and complained.
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Michalow’s Mel Gibson moment unleashed a chain of events, which this week resulted in a filing with the New York Supreme Court that might make it difficult for banks and hedge funds (in New York at least) to insist that employees sign away their rights if they want to receive deferred compensation after they leave.
DE Shaw parted comment with Michalow after the “sugar tits” comment and announced that there had been “gross violations of our standards and values”. Last year, however, the hedge fund was ordered to pay $52m to Michalow after a FINRA panel said DE Shaw defamed him.
Michalow isn’t letting matters rest there. Semafor reports that he filed the new claim last Tuesday, arguing that employers who insist that employees sign away their rights to report misconduct if they want to receive deferred compensation are contravening New York state labor laws.
If Michalow’s new claim succeeds, it means that not just hedge fund managers, but bankers, traders and everyone else, will be free to complain about their employers after they’ve left without the fear of having deferred pay deleted forever. This would be a dramatic and positive development, given that most financial services professionals are gripped by the fear of losing their deferred compensation if they say anything negative before their pay has vested.
Separately, the Wall Street Journal has identified probably the most important German employee at Goldman Sachs: 55-year-old Jan Hatzius.
Hatzius, who is based in New York and runs a team of 12 economists globally and 29 in America is known for his accurate and eclectic calls on the economy. First, he predicted the 2008 financial crisis. Then he predicted falling bond yields. Now he’s predicting that inflation will fall to 2% without causing higher unemployment.
Although he was born and raised in Germany, Hatzius hasn’t lived there for a while. He attended the University of Freiburg, then got his doctorate at the University of Oxford and was tempted to become an academic before deciding that his interests were too diverse. He’s been at Goldman since 1997 and is followed by economic advisors to the US president.
Hatzius isn’t always right and it’s not clear whether his latest call is prescient or not. Not everyone agrees with him: Marko Kolanovic, JPMorgan’s chief strategist (who’s Croatian) thinks stagflation is coming next.
Meanwhile…
Citadel’s commodities business made $4bn last year. (Bloomberg)
Once Citigroup trader Gary Stevenson received a £400k bonus he split up with his girlfriend and stopped seeing his friends. “It’s never enough. And I’d never leave. Not if it meant letting them win.” (Guardian)
Not everyone is a fan of Venkat’s new strategy at Barclays. “The investment banking arm continues to stick out like a sore thumb as it isn’t a natural fit to the rest of the business. Appointing four people to lead that division suggests the CEO doesn’t know what to do with it. Too many cooks spoil the broth, and the head chef is focused too much on sweet-talking and not enough on action.” (Euromoney)
Venkat’s revenue projections look unrealistic. ‘An almost doubling of investment banking deals revenues (from £2bn to £3.5bn) back to record levels would need a 2021-type super gold rush in deal flow or massive market share gains against the likes of market leaders Goldman Sachs or boutique champions like Evercore.’ Nor are markets revenues likely to increase from £7.2bn to £8.3bn+ by 2026. (IFR)
Barclays hired 1,177 graduates in 2023, up from 841 a year earlier and 851 in 2022. Of the new hires, 36% were female. (Financial News)
When ChatGPT goes mad and plans your meeting. (Twitter-X)
If you’re in New York you can demand that AI doesn’t scan your resume. This may prevent you from being instantly rejected for jobs. (WSJ)
UK employers could be sued for disability discrimination if they fail to make “reasonable adjustments” for menopausal women such as allowing them to work from home or lowering the temperature in the office. (The Times)
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