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Why the Goldman Sachs Resignation Letter from Greg Smith Lacks Credibility (& how to Resign with Dignity)

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Greg Smith has become a bit of a cult hero for disgruntled white collar workers overnight, with his resignation letter from Wall Street investment banking firm Goldman Sachs in the form of a New York Times op-ed.

Mr. Smith, who spent 12 years at Goldman (10 in New York and 2 in London), decided to resign from his mid-level executive role  because he believed that the company’s culture had morphed into one that valued profit before its clients and that this behavior was encouraged from the very top (to hear both sides, you can also check out Goldman Sach’s response).

If you haven’t noticed, I have a bit of “stick-it-to-the man” rebelliousness about me. Witness my Comcast, Steve Jobs, E-Trade, Black Friday, Americans are overworked, and consumer 12-step program rants, for starters. I don’t think this non-conformist attitude is all that uncommon amongst hardcore frugalites. It’s probably the rule, not the exception.

And with the financial crisis and ensuing Great Recession, there has been no love lost for Wall Street Firms. Especially Goldman, who has often been at the center of controversy.

Combine my rebelliousness with my disdain for Wall Street and Smith’s op-ed really grabbed my attention. It had the potential to put a much more critical eye on one of the world’s largest financial institutions by the public, government, its shareholders (the GS stock dropped 3% the day it was released), and its customers. Wall Street needs this level of enhanced scrutiny and responsibility.

But since the piece was published, my enthusiasm has waned because I think Mr. Smith’s credibility suffers for a four big reasons:

goldman sachs resignation letter

1. Tenure/Financial Motive

The fact that Smith was with Goldman for 12 years before leaving really damages his credibility. No doubt, as a mid-level executive for an investment firm for 12 years, with their reputation for high pay and handsome bonuses, Mr. Smith leaves Goldman as a very wealthy man (one can fairly assume he earned millions in his time there).

If Mr. Smith felt so strongly about the changing culture at Goldman, why did he wait so long to leave? Perhaps he was waiting to hit certain financial goals before deciding to move on with his career. It took him 12 years to figure out Goldman wasn’t the place to be? Not buying it.

2. He Hands Over Responsibility to Others without Taking Action

The fact that Mr. Smith has decided to go public about his distaste for Goldman’s culture without any mention of trying to be a champion for change internally in the company or raising these concerns directly with leadership, speaks to his cowardice and self-motive. He doesn’t say he decided to leave after tirelessly pursuing culture change and raising concerns with leadership. He was in a leadership position and no doubt had access to key company influencers.

Instead, he says “I knew it was time to leave when I realized I could no longer look students in the eye and tell them what a great place this was to work.” That’s it? And you write an op-ed for the New York Times as a result?

3. At Second Read, the Op-Ed Looked More Like a Resume than a Resignation Letter

Sprinkled throughout the op-ed are self promotional gems like,

“Over the course of my career I have had the privilege of advising two of the largest hedge funds on the planet, five of the largest asset managers in the United States, and three of the most prominent sovereign wealth funds in the Middle East and Asia. My clients have a total asset base of more than a trillion dollars”

“I was selected as one of 10 people (out of a firm of more than 30,000) to appear on our recruiting video”

“getting a full scholarship to go from South Africa to Stanford University, being selected as a Rhodes Scholar national finalist, winning a bronze medal for table tennis at the Maccabiah Games in Israel”.

We get it, you are a special guy. Wait, wasn’t this supposed to be a resignation letter instead of a resume?

4. He States the Obvious

There is nothing in his piece that is the least bit shocking or unexpected to the common American. Smith admits, “I don’t know of any illegal behavior”. A Wall Street investment firm that sells products out of its own best interests to customers? Welcome to capitalism, my friend. Wait, you’ve already been at the heart of it for 12 years? You’re a Rhodes Scholar finalist who had no idea what you were getting in to when you applied for Goldman Sachs?

These four things lead to Mr. Smith being what his UK statesmen would call a “bloody wanker”.

What can you do to avoid being like Greg Smith?

If you don’t like your employer, there are much more dignified ways to handle the situation. For starters:

  1. Be honest with yourself. Let’s face it – there’s only one reason to work for Goldman Sachs: money. Be honest about yourself when taking a job. You know what you’re going into when you apply to a Wall Street investment firm. Be honest with your expectations for the job you signed up for.
  2. Be an enforcer of change. If you see things you don’t like, put your own ass on the line and raise your concern with management. Be vocal, and don’t just fall in line and accept the status-quo. Be the guy/gal who is not afraid to address the elephant in the room. At the very least, you will keep your dignity. Corporate cultures go bad when people fall in line and don’t keep it real.
  3. Don’t work for a place you hate for 12 years, even if they pay handsomely. Go elsewhere, become self-employed, anything but stick around for 12 years as you watch the life slowly get sucked from your soul.

If those three things fail, then go write a New York Times op-ed and score a multi-million dollar book deal to help shed some light on your situation. You’ll need that money to fight years of lawsuits ahead.

About the Author
I am G.E. Miller, & this is my story. My goal is financial independence ASAP. If you share that goal, join me & 7,500+ others by getting FREE email updates. You can also explore every post I have written, in order.

  • Aaron says:

    GE, this is an excellent post. Like yourself, I read the editorial and got caught up in the excitement of a guy sticking it to a wall street firm in the NYT, but I think you are spot on in your criticism. It is so much more challenging to work within an organization to make change than it is to walk away from something and wipe your hands clean of it.

    That being said, I still think it takes a bit of courage to publicly post something like this and attach your name to it. I can imagine even with his accomplishments posted in here, this will scare away more than a few potential employers.

    • G.E. Miller says:

      Sure, there were definitely risks involved in posting this in the NYT, but you have to wonder if those were calculated risks in an effort to set up his next career move. Will be interesting to see what Mr. Smith is doing a year or two from now.

  • R S says:

    I disagree with your first point. I think the op-ed discusses why it took him 12 years to leave. As a first job out of college, it takes time for the company atmosphere to get to the point where you can look at it critically.
    Given that in 12 years, he became a director (if director means the same thing it does at my company), that’s no small feat and his work environment must have been changing too rapidly for him to get a sense of what actually was going on.
    I have been working at my first job out of college for 5 years, and I am only just now at a place to look at things critically. However, I haven’t moved up the ladder – just in responsibilities – I’m sure if I moved to management positions, my opinion on how things are run would be quite different.

    That said, your second point is really what got me. As a director, I’d assume he’s in a position to make a difference. Yet he walks away.. If the company truly degraded over the 12 years he was there, wouldn’t he feel some responsibility to restore the company to it’s former levels?

    This part gave me a chuckle, “Today, many of these leaders display a Goldman Sachs culture quotient of exactly zero percent. I attend derivatives sales meetings where not one single minute is spent asking questions about how we can help clients. It’s purely about how we can make the most possible money off of them.”
    Himself included, it seems. Certainly not something I’d highlight in my resume, “Here’s a great example of where I had the multiple opportunities to speak up, but I didn’t.” 😉

    • G.E. Miller says:

      I’d agree on the first point if it were up to maybe 4-6 years or so. But 12 years is an eternity to figure out what a company’s culture is like, particularly at a higher level position. It just seems a bit ironic and a bit self serving that he didn’t like the “sell without regard for customer” approach, yet profited handsomely from it at the same time…. for 12 years (6 under the present CEO)… in a business that is notorious for that behavior (what Wall Street prospect hasn’t seen the movie “Wall Street” or read headlines for the last 25 years?).

      • R S says:

        Oh, maybe I misunderstood… I thought this was his first job out of college and he worked his way up to a higher level position. I assumed that the first few years, he would’ve been like me – busting his butt to do well in his chosen career path, not thinking too much about the corporate big picture, while working his way through the corporate red tape you encounter as a peon.
        I assumed he was at his high level position for the past 6 or so years, not 12.
        For a “normal” college student, he would’ve been 21 when he started, and is now leaving at 33? Like most college grads, I’m sure he joined the firm looking at the new oppurtunity through rose colored glasses, and I can see it taking a 6+ years to see things as they really are. Sure, the firm has a bad rep, but when you’re working 80+ hours a week, I bet you don’t have time to really think about it. Not to mention all the company training you receive, touting the great causes the company stands for, etc. These firms lay a foundation in new hires to give them a sense of company pride. It takes a bit to see through their propaganda.

        If this were his 2nd, or 3rd, I would agree – 12 years is too long and he’s been through the process of company brainwashing. Talking with my friends who’ve been at their first job out of college for ~6 years, they’re only just starting to see things for as they really are. In the first few years, everyone’s first thoughts were: pay off college loans (not a concern for him), get health insurance, get to a dentist and see what damage college has done to the teeth, buy a car, figure out how company retirement benefits work, explore the new city I’m working in etc.. just all the preoccupations with your first stable income..

        I guess I’d like to cut him some slack for that. I certainly don’t see myself as a director at 33.

    • Julie says:

      Wasn’t there a response from someone else at Goldman Sachs that said the title of Director is not very high up on the Goldman ladder. In fact, they even suggested that after 12 years at the company, he should have been higher up, and was probably passed over for a promotion.

      Apparently, he was a VP:

  • DaveS says:

    Interesting take on Mr. Smith’s departure. My knee-jerk reaction is to side with the guy because, like you, I’m a “stick-it-to-the-man” type (despite being a member in an older age bracket who ought to have gotten that out of his system). Nevertheless, I think it best to make a distinction between his motivation for leaving and the truthfulness of his claims. I also think he should be cut some slack for having mixed motives.

    True, it’s odd that he left after 12 years, but does that mean that his real reasons are not job dissatisfaction? Not really. He did indicate that his change of mind was gradual and implied that for most of his career he was a believer. Perhaps the implied rapid change in Goldman’s culture is a hard idea to swallow, but as someone who has seen his own company change for the worse, I can believe it.

    And, what if he was a coward who just hung in there long enough to build up sufficient cash to cushion his landing? He doesn’t say he tried to change things and doesn’t say he didn’t, though his silence leads me to agree that he probably didn’t. Still, that leaves us with an incomplete picture at best. Perhaps he’s not the bravest soul, but I cannot help but think that he also felt that he was alone. It’s hard to be brave or even confident of yourself if you fear that you may be the only one of your kind.

    As for point three, I think he added that to boost his credibility for the doubters who might argue that he really quit because he just wasn’t cut out for the job. Point four? Sorry, I don’t agree that this is capitalism, which is an economic theory that doesn’t necessarily entail screwing people. And Mr. Smith clearly pointed out that when he joined the company Goldman actually did look out for its clients.

    I would love to be able to avoid being a Greg Smith as you define him. I wish I had the courage to be the lone voice in the wilderness crying out for change. I’m not. Unlike Greg Smith, I, and many others like me who are unhappy with the culture of their current company, have even more reason to be a coward. We don’t have zillions to live on if I quit or resign. We’ve been looking for other work with little success, and, until we do, must sadly keep quieter than we wish we could. Does this weakness make us harder to believe when we finally complain? Sadly, it does. But that doesn’t mean we’re wrong.

  • Life Compass says:

    Why write the NYT article? Perhaps he’s positioning himself to be the next in a long line of Goldman people working in the Obama administration.

  • Warren says:

    In the late 1980’s I was working for a Wall Street firm and Goldman Sachs had a reputation for being the most above board firm on the street. The customer’s interests came first. From what I’ve seen in the news papers and from people I know, it is obvious that Goldman Sachs today is not same company that it was.

    What Greg Smith is saying is NOT that he spent 12 years at a bad firm but that 12 years ago it was still a good company that had the interests of it’s customers first. He did not spend 12 years getting paid by a company with a bad culture, for part of that time Goldman Sachs was an example of what a company culture should be.

    He’s saying that the company changed so he resigned.


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