Morning Coffee: The end of gardening leave as we know it? 34-year-old fund manager elated after primal vacation
If you work in financial services and reach a certain stature, there has long been a pleasure to be had from changing jobs which has nothing to do with the actual role.
During the notice period between leaving one job and starting another, you'll often be asked to sit out of the market in the hope that your clients will forget about you and your skills will atrophy. You will be paid, in full, by your previous employer. It's called gardening leave. And it can go on for six months, or more.
One ex-Goldman Sachs MD told us gardening leave was the source of his "best summer ever." A partner at a Big Four firm told the Financial Times: “I was annoyed at the garden leave until, a month in, I realised this was the greatest thing that’s ever happened to me, like a fully paid retirement in the middle of my career.” Many people time their gardening leave to fall over the summer months. It's about more than a new job: it's an opportunity to dabble in a whole new workless way of being.
It's a shame, then, that the gardening leave tradition might be under threat from cost-cutting and legislation. The FT reported yesterday that KPMG has decided only to pay its partners 50% of their salaries during gardening leave instead of the full amounts. There are worries that KPMG partners, who were probably earning more than $1m, won't be able to pay their bills as a result.
At the same time, governments in both the US and the UK are trying to put an end to the restrictive covenants that forbid people to work for rivals. In the case of hedge funds these can last a year or more, and contribute to some of the longest gardening leaves known to man or woman.
Fortunately, though, gardening leave is likely to endure. Employers will always want prized ex-employees to sit out of the market, and if ex-employers won't pay them fully to do so, then the onus will fall on the hiring firm to compensate them for the time they're dabbling with flora. Lower pay for gardening leave will simply mean higher sign-on bonuses.
Separately, if you're back from vacation and wondering whether it was well spent, then the tale of Oisin O’Leary, a 34-year-old fund manager at EFG Asset Management in London, may amplify your doubts.
O'Leary has participated in a trend for survival holidays. Last year, he went to the Pearl Island archipelago and spent two days trying to make a fire. “When you achieve that, something so small, it triggers this primal sense in your brain about ‘Oh, this is how our ancestors used to live’ and you get this immense sense of gratitude for all these teachings,” he told the Financial Times.
Similar experiences are available for $3k+. Expect to be left in the middle of nowhere and left to forage your way back to a camp. It's good for perspective - afterward, beach resorts seem like a "10 star hotel."
Meanwhile...
Michal Katz, head of investment and corporate banking at the New York, won the Arm Holdings IPO for Mizuho, which is one of the four global investment banks leading this year’s biggest deal. (Bloomberg)
Alvarez and Marsal hired seven people from KPMG for a new corporate finance practice. (Financial News)
Credit Suisse ESG research returns to oil and gas. (Zero Hedge)
Deloitte’s workforce increased 11% last year, to 457,000 globally. Tech consulting slowed, but companies are still upgrading IT and digital services, and Deloitte is selling AI and metaverse services too. (Financial Times)
There's a shortage of auditors in the US and it's starting to cause problems, particularly in areas like government accounting. (FT)
If you like academia, you might want to work for Himalaya Capital, founded by Li Lu, a former Chinese dissident. “We joke that Himalaya is an academic institution, where Li Lu is the professor, I’m the teaching assistant and the analysts are the students.” (Financial Times)
Said Haidar’s macro hedge fund suffered a further 15.7% slump in August. It's Haidar's worse run of trading losses for 20 years. (Bloomberg)
Soften the blow of returning to the office by buying yourself a little treat. (WSJ)
Americans have developed a laxative habit and now laxatives are running low. (WSJ)
Life with a $5m retirement nest egg. “Boy I do like to travel.” (WSJ)
Two decades from now it will be revealed that someone got a 2 year guarantee & deferred comp buyout from 5+ pod shops in a row, lost money at all of them and walked away with a $30+ mm 🌰 pic.twitter.com/utjByerbjm
— Lake Cornelia Research Management (@CorneliaLake) September 6, 2023
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