Evercore paying up to $25,000 to delay start date
WSJ just released an article saying Evercore is offering junior $15,000 if they delay start date until January and $25,000 if they delay until next summer. Not sure why anyone would take that deal, and seems pretty small stipend for delaying work that long. May also be reflective of the layoffs Evercore had before COVID and theyre trying to further cut costs. Thoughts anyone?
Not sure if this would make sense, but as someone who will still be living at home with my parents right up until full time work, an extra $15-$25K for sticking it at home a bit longer sounds like a pretty good deal. Obviously, this is okay with me as long as the full time offer remains intact. This is all just my opinion, of course.
In other words, seeing as it's just your opinion, nobody gives a shit. Great. Thanks bro.
I guess when the OP asked to hear people's thoughts, he didn't mean their opinions. My bad.
A few thoughts here:
Kudos to those of you that can sit at home without work or distraction until the winter or next summer. That's beyond tough; even for $15K-$25K. I, for one, could not.
Isn't Evercore's RX business meant to prevent drastic personnel and cost-cutting measures in times of economic instability?
What's to prevent Evercore from further delaying new hire start dates if/when one takes the winter or summer option? A bit of a slippery slope.
Yes - a big selling point of having an RX business is that it is naturally counter-cyclical but Evercore's is historically significantly undersized relative to the top (HL / PJT / Moelis / Lazard). They have a solid practice but are much more leveraged to M&A.
For an idea of scale, in 2019 Moelis was #1 by value in completed restructurings at $74bn across 25 deals and Houlihan was #1 by quantity at 41 deals totalling $33bn. Evercore completed 12 deals worth $21bn.
RX is a much smaller portion of revenues than their M&A counterpart - this is true for most firms other than a couple exceptions (i.e. HLHZ, Ducera)
Also most RX fees are skewed toward the back end (have monthly retainer fees, but the bulk sum comes as a success fee at the end) and RX mandates typically take 6-12 months so while RX groups remain busy, a downfall in M&A activity will definitely cause issues from an immediate cash flow standpoint for most shops
Evercore is known for babying interns and analysts, and being pretty progressive in general. You could just as easily read this as “stipend for kids who are too scared to come back to the office during the pandemic”
Some quick thoughts to address some prospect fear given my vantage point at a EVR/LAZ/MOE/PJT.
1) This is probably a net positive for employee and employer. EVR saves money at a time when the capacity isn't needed given uncertainty and incomings still have future employment and some comp. The alternative is rescinding offers.
2) IB is a human capital business and good talent is hard to find. This enables them to retain future talent in an otherwise torrid market.
3) Reputation is also important so I would see this as a positive signal that aims to maintain that again vs. the alternative.
4) As mentioned in the prior posts of others and my understanding is that EVR has shifted a lot of existing capacity to address the RX opportunity, so the model is working. But bringing in tons of new headcount would put them over given anemic M&A. This reduces the need for RIFs (that's a good thing that they actually give a shit.)
5) For prospects aiming to go to PE, your first several months of training and hitting the desk are critical to helping you prep for recruiting. You probably want a full experience not the virtual version to set you up correctly for the season.
6) For 2020 summers, a couple more reassuring thoughts. M&A should hopefully start ramping again long before you hit the desk given the current delay and buildup. Also, existing analysts who are 2nd/3rd years are still leaving en mass for the buy-side in a couple weeks. Meaning the need for two classes worth of capacity will probably be there (not a prophet but that's my guess). Will internships at EVR/LAZ/MOE/PJT be more competitive? Probably. Will offer rates drop from 90s to 50s? Doubtful, given the points above.
From what I can see overall, well capitalized strategics are chomping at the bit to go buy stuff given decreased pricing in many sectors but are on the sidelines given uncertainty and closed financing markets. Sponsors are keeping an eye towards the future but are still currently focused on value plays where they can pick up material investments with favorable terms and good downside protection. Eventually, those opportunities run out and it's back to more traditional investment strategies. All of this means the need will be there, but in the mean time boutiques are just getting creative to manage headcount and costs until that time comes while minimizing the need to take negative actions. BBs on the otherhand (having also been in one), we'll see if they revert to the good ol' pendulum headcount management technique.
I like the positive spin but this is a bit naive. EVR (and every other bank) has excess capacity right now and is effectively furloughing part of its incoming analyst class in order to cut costs. If things improve, great -- all furloughed analysts will begin work at the later date. If things don't pick up as planned, guess what. Start dates get deferred further and then indefinitely. This is what happened in 2001 and 2009 to incoming analysts and associates. In the last crisis, start dates got deferred for so long that many analysts and associates eventually gave up and looked for other jobs because they had to move on with their lives and begin making a real paycheck, or their offers were outright rescinded. Nobody knows if this will be a V-shaped recovery or a U-shaped one or even W shaped. Hopefully it's a V shaped recovery. If it were me, I would not take the offer. I would rather secure my spot and take my chances with layoffs if they come -- it's not great to be laid off, but at least I will have been in the door.
Layoffs and now delayed start dates? Feels like EVR grew too quickly and are now rightsizing going into macroeconomic softness.
EVR has always been a general forward indicator for the broader EB sector so would imagine others who grew aggressively over the last 5-10 years will follow.
My $.02.
Some good posts that are on point here.
I do love how the majority seem to forget about the burden that this will place on the currently employed, productivity strained, and already stressed staff. Adjusting to a new work flow after years of your routine was pulled away? Don’t care - Train some kid you’ve never met, doesn’t know squat, and could leave for PE before you ever meet him....
Pretty much all of my peers are JUST ramping up to real desks, chairs, monitors, eating/work out habits etc. Finally realizing Cuomo the cuck is going to drag this thing out till 2021.
Do you know how awful it is going to be when employees are asked to waste hours of their day trying to explain excel spreadsheets and power point edits through the phone to someone who can barely write a formula? I can’t think of anything worse to pile on to my already shitty and f’d up “new normal”.
Not to mention how terrible your FT 1st year post-grad experience is going to be remotely. Don’t expect much. Maybe consider that cash.
One of the single-largest complaints from juniors is lack of exposure to clients/meetings/decision making. “I am so tired of being a meaningless powerpoint jockey”. Christ, you think you’re about to be Cc’d and included on meeting invites and looped in to meaningful dialogue when I have never seen your face? Yeah right.
The firm is doing you a favor while mostly considering the impact on revenue generating employees that they are leaning on hard to make revenue targets. Quit thinking these decisions have something to do with “impacting recruiting” and other PC garbage like that.
This is going to suck so badly for the existing first year analysts and associates (assuming a decent chunk take the offer)
You have a whole class of 2nd year analysts who are leaving at the end of this month after completing their two-year stint and going off to PE (which is the vast majority at Evercore).
1) Essentially no interns to take some of the load off for the July-August period
2) Now you don't have a full-time class either so you are covering the work of a whole analyst class for 6 months to a year
All the terrible coverage books that 2nd years would pass on to 1st years will have to continue to be absorbed by the 2nd years. I'm not sure what deal flow looks like at Evercore but you can't lose an entire analyst class and have no replacement. Every year at my firm the July -> Late August period sucks (for all juniors) because you have so few analysts to spread around the deals and Associates end up having to do a lot of the Analyst work, etc. It's bearable for 2 months but 6-months to a year would be horrible.
The time might seem really appealing, but you lose a lot of experience by delaying even until January. Will be very difficult to ramp up or even have a role on the team if you start that late, especially if other first year analysts have been on the desk for a while.
It sucks because personally I would love to take the time and travel, but seriously as a first year Analyst I don't think it's a good idea.
EDIT: LOL y'all really don't like truth on this website. Best of luck explaining your leave of absence to PE headhunters in the future. What do you want me to do, validate your opinion that you can take the critical first 4 months off work in a job with a J curve difficulty and it won't matter?
Just wanted to throw in here that this entire thread is the epitome of the circle jerking for "EBs" and especially the favorite child- Evercore. Everyone is spinning this so positively I almost thought I was reading a CNN article about Biden.
If this was ANY BB firm everyone would be posting "lmao well too bad you're not at Evercore or PJT and you don't have RX to hold you down" - looks like the tables have turned here. Grass aint that green over there at the EBs now huh?
In all seriousness I think its a terrible indication that they are putting this difficult situation on their analysts- they have money to pay you guys- just means the MDs bonuses will be smaller. Obviously M&A will be down and there are little to no capital markets/ trading activity to speak of at EVR.
Furthermore, the only bankruptcy situation has been Hertz so far, and most firms are raising debt just fine with the government backstopping every issue- this is a huge positive for the BBs with syndication desks- it also means little to no deals for RX- hence why this offer is to both M&A and RX.
I come here not to gloat but just to expose that the circle jerking for EBs is out of control on this site. Good luck everyone!
Have no desire to discuss the rest of your post, but you do realize that: 1. there have been more bankruptcies in the last 2 months than Hertz 2. RX firms work on deals that aren't straight Chapter 11
If you know anyone at any RX group you'd know there's plenty of RX dealflow. Even companies the government is offering an implicit backdrop to, like the airlines, have engaged RX advisors to work with them.
Keep the jerk going my man- obviously there are more complicated arrangements/situations that are being worked out through RX practices- the point is that the major fees (as compared to the massive fees from M&A and huge bankruptcies like Toys R US/ Worldcom/ Enron/ Lehman) are just not there- better luck next time though.
No worries bud - realize reading isn't always the easiest skill. Deals like Enron / Lehman are very rare, so saying there isn't much RX activity isn't a real comment unless you're implying that there only really was significant activity in 01 and 08 - if this is what you're saying, no need to read further - you're more stupid than I thought. Obviously for an M&A heavy bank like Evercore they're going to be affected by this crisis, but agree with the above poster that you're so clearly wrong when you state that Hertz is the only real activity in the space right now.
Figure given your struggles with reading you may also struggle with Google search, so here are some quotes from the restructuring shops confirming an increase in activity. Keep in mind that COVID impacts only began to be felt near the end of Q1 so business likely grew into April.
Moelis (from Q1 earnings call): "At the same time, our restructuring business, coupled with our capital markets capabilities, has experienced a tremendous increase in mandates recently."
PJT (from Q1 earnings call): "Since the onset of the economic shutdown resulting from the pandemic, we've experienced a dramatic increase in restructuring activity."
HL (from Q4'20 earnings call): "New restructuring engagement activity is running at almost double our recent monthly run rate as the pandemic has greatly increased the number of troubled situations and the speed at which solutions are needed."
Evercore (from Q1 earnings call): "Demand for restructuring and more broadly, debt advisory and liability management advice, has dramatically increased in the current environment as companies focus on their most immediate liquidity needs."
Let me know if any of those words were too big - happy to break anything down for you.
Just take the $25k and day trade for the year. Most day traders only trade the first two hours of the day, leaving you the rest of the day to chill and do whatever you want. You'd be able to grow it so that you'll have over 100k by the time you would start FT. Doesn't sound like too bad of a deal to me.
Darn, I didn't know it was that easy to quadruple your money in a year from day trading. Would love some private lessons! :)
Let me tell you about a magical place called Wall Street Bets.
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