- Hundreds of senior bankers have shuffled seats in the
most active year for moves since the financial crisis.
- Tech bankers are the most coveted, and they’re still getting
poached — which is atypical this late in the year.
- Investment banks are paying millions to lure senior tech
bankers, who commonly make 1 1/2 times as much as bankers in
- Tech was the most active M&A sector this year, producing
$670 billion worth of deals.
Wall Street investment banks are still shopping this December,
and tech bankers — the most coveted and expensive specialists in
the dealmaking universe — continue to fly off the shelves.
Earlier this week, Deutsche Bank
hired software banker Greg Thorne from Stifel — the bank’s
second software hire in as many months. Last week, it was
Evercore, which opened up its checkbook to sign
Citigroup internet and digital media head Zaheed Kajani, a
senior managing director (MD) who reportedly has over 100
transactions under his belt.
Such hiring activity this late in the year is atypical, since the
hiring firm will usually have to cover the bonus the banker
would’ve earned at their previous company — a pricey proposition
that amounts to paying an employee for a year of work they did
for a rival.
But this hasn’t been a typical year on many fronts.
This year has been the
most active year since the financial crisis for hires and
departures among senior investment bankers, with firms of all
sizes poaching talent from rivals to capture a bigger slice of
2018’s massive dealmaking frenzy. This year has seen $27 billion
in mergers and acquisitions (M&A) fees — the most since 2007,
according to Dealogic.
Hundreds of managing directors have shuffled seats, but tech
bankers have been the hottest commodity, with nearly 50 MD-level
hires in the US, up 41% from 2017, according to data from
executive-recruiting firm Egon Zehnder.
“And the pace seems to be accelerating. Especially in
software, but really across the board,” Albert Laverge,
head of the corporate and investment banking practice for
Egon Zehnder, told Business Insider.
Other top tech bankers who switched firms this year include Kurt
Simon, who left JPMorgan Chase for Goldman Sachs; Tammy Kiely,
who agreed to join Morgan Stanley only to
rejoin Goldman; Sam Powers, who left UBS to run US TMT
banking at Bank of America Merrill Lynch; Mathieu Salas, who
left Citi to run fintech banking at Credit Suisse; and Adam
Nordin, an education-technology specialist who
left Barclays for Goldman.
It’s no surprise the market for tech bankers is booming, given
the bounty of fees the sector is producing. With two weeks
left in the year, tech was the most active M&A sector,
producing $670 billion worth of deals, according to Dealogic.
Among the largest were
IBM’s $34 billion buyout of Red Hat, Broadcom’s $18.9 billion
acquisition of chip-maker CA Technologies, and
Microsoft’s $7.5 billion deal for GitHub.
The next closest sector is healthcare at just over $500 billion,
which happens to be the second-hottest hiring sector for MDs,
especially in biotech. There’s also been a barrage of biotech
initial public offerings this year — 58 deals that have
raise a collective $6.3 billion.
“Everyone’s trying to recruit someone who is supernaturally
successful,” Julian Bell, head of investment-bank recruiting at
Sheffield Haworth in New York, told Business Insider. “If you do
successfully do that, you can add a lot of revenue on top.”
These bankers don’t come cheap
But great tech talent is scarce, and these bankers don’t
According to industry sources, it’s common for senior tech
bankers to make 1 1/2 times as much as similarly situated bankers
with a different industry expertise, such as consumer goods,
business services, or real estate.
“You have to be consistently good to get into the $2
million range in most sectors. As in very good,” Bell
By comparison, sources said, compensation for experienced
tech bankers in the $3 million to $5 million range is
In part, tech and biotech bankers command a higher premium
because of the revenue they bring in working in the hottest
sector for deals.
But they’re also more scarce because their talents are
coveted beyond the confines of Wall Street, Bell points
Big tech giants, as well as maturing unicorns, desire
seasoned bankers for chief financial officer and corporate
development roles, and the payouts, often laden with company
stock and options, are far greater than anything a top tech bank
like Goldman Sachs, Morgan Stanley, or JPMorgan can offer.
“If they get it right, they’ve just earned $30 million,”
And maybe much more.
Anthony Noto, a longtime Goldman Sachs banker, joined Twitter in
2014 as its CFO, and later as its chief operating officer, before
leaving earlier this year to take the top job at SoFi. He was
compensated primarily in stock and options at Twitter, which are
worth about $67 million, not including any of the shares he’s
already sold, according to regulatory filings and market prices.
Imran Khan, who left Credit Suisse to become Snapchat’s chief
strategy officer in 2014, had
accumulated a $150 million fortune by the time the company
went public in 2017 — mostly in stock that has diminished in
value since. Khan
left in September to start his own company.
Ajay Shah, who was appointed head of technology investment
banking at Deutsche Bank this fall and was involved in the bank’s
recent MD hires, said this dynamic has made finding the right
talent more difficult.
“The talent there is a little sparse in terms of people who
want to move, and people we really like,” Shah said. “The hiring
pool had gotten a little skinny because of all those bankers
moving to different parts of the ecosystem.”
But, with the deal market roaring and expected to continue
well into 2018, banks want to have a team in place to capitalize
on it as much as possible before the music stops.
Given the customary garden leave, waiting until the new
year to hire talent means a bounty of deal fees left on the
That helps explain why Deutsche Bank, and others, are still
poaching tech MDs well into the fourth quarter.
“Overall, the tech space is going to be extremely active,
and we want to hire ahead of that and have the right team focused
on clients,” Shah
recently told Business Insider.