March 7 (Bloomberg) -- Goldman Sachs Group Inc., the fifth-largest U.S. bank by assets, will name new managing directors every two years instead of annually as it overhauls a process adopted 17 years ago.
After recipients are announced at the end of 2013, the firm won’t select managing directors until 2015, the firm wrote in an internal memo. David Wells, a spokesman for the New York-based bank, confirmed the contents of the memo.
Goldman Sachs created the managing director title in 1996 to recognize top employees who weren’t yet partners. The firm promoted 266 employees to managing director in 2012, up from 261 a year earlier. About 7.2 percent of the bank’s employees hold the title.
“A biennial process will allow us to invest more in the managing-director selection process so that it will continue to be a disciplined and rigorous exercise,” the bank said in the memo. “This will help to ensure that the managing director title remains as aspirational as it should be for our top performers.”
Business Insider reported the change earlier today.
Managing directors typically receive a base salary of $500,000, lower than the $900,000 granted to partners. Both also get bonuses that can boost their total compensation into the millions of dollars.
The first class of 87 managing directors included William C. Dudley, now president of the Federal Reserve Bank of New York; Clifford S. Asness, who left in 1998 to start hedge fund AQR Capital Management LLC; and Richard J. Gnodde, who was named co-head of global investment banking at Goldman Sachs in May 2011.
“The number of managing directors at Goldman Sachs has grown as a percentage of our population since the first class, reflecting the growth of our business and the expansion of our global footprint,” the firm said in the memo.
To contact the editor responsible for this story: David Scheer at firstname.lastname@example.org