A note to the banker-bashers
Banker-bashing is in fashion. After all, the excesses and collapses of Bear Stearns, Lehman Brothers and RBS crystallised the subprime crisis in the US and Britain. Blaming well-paid banking executives for the woes of a long-suffering majority with'real jobs' is a message that resonates well with US voters in an election year.
Many people would like to get a piece of the wealth and power that investment bankers seem to personify. But few would survive the brutal, Stakhanovite work ethic, or the aggressive environment in which they operate.
True to form, i-bankers work long hours. For those in equity capital markets departments, the day often starts at 7.30am, attending briefings for equity sales teams that are used to take the pulse of the market ahead of trading. The day often ends very late. One or more all-nighters a week are common, especially for junior staff. Weekends as such rarely exist.
Then there's the constant flow of calls and e-mails, with stacks of documents to write and review, all with impossibly short deadlines. But that's only part of the job.
Much of the rest is about travelling and visiting existing or prospective clients. It's fun at the outset, but tiring and repetitive after a while. Waking up at dawn and returning home well past midnight two or three times a week is no fun. There's the non-stop pressure to pitch for, and win, new business, especially among the senior ranks.
The multimillion US dollar fees that are charged to clients, as well as the highly competitive environment - both externally and internally - mean there's a never-ending race to secure new deals and see them through to closing. Investment banks generally are paid only on a success basis. No one is rewarded for a deal that ultimately collapses, no matter who is to blame.
The bottom line is a work-life balance that's anything but balanced. Holidays are cancelled on a regular basis, and there is a high divorce rate. Lunches and dinners are eaten at desks (or with clients), and it's necessary to be available all the time to make sure that everything proceeds according to plan. Investment bankers based in Asia - at US firms in particular - know the importance of gluing oneself to one's BlackBerry. They need to stay connected to their superiors in New York, whether they are eating dinner or lying in bed.
That's not to mention the regular staff pruning. 'Under-performers' get kicked out at the drop of a hat, and are allowed only a cardboard box to collect their personal belongings. Their skills are not always transferable to other fields.
Of course, the work can be fun. It's exciting to chew the fat with chairmen, CEOs and chief financial officers on a daily basis. And there's the high compensation, which makes up for this sorry lifestyle. But even that is not what it was. These days, the largest chunk of year-end bonuses gets paid in shares or stock options, rather than in cash. Bonuses tend to come over several years to ensure bankers have a long-term incentive, and do not jump ship to the competition. Multiyear pay guarantees, other than for a handful of rainmakers, are mostly a thing of the past in today's brave new regulatory environment. New 'claw-back clauses' mean that hard-won discretionary payments may turn out to be much lower - or may even evaporate - in later years.
It's a far cry from the portrait of privilege put out by the kum-ba-ya-chanting, happy-camping, welfare state-touting 'occupy' crowd.
No one is expected to shed a tear for bankers. But it's not all easy money and champagne lifestyle.
Philippe Espinasse worked as an investment banker in the US, Europe and Asia for more than 19 years
