WSO Podcast | E232: Terrible Bonus - Don't Hire Friends - Be Interesting | Weekly Wrapup #3
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Topics this Week:
0:00 Becoming A Better Conversationalist In IB
5:08 Never Hire Your Friends...Got Burned
9:10 Dealing With A Terrible Bonus?
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WSO Podcast Episode 232 Transcript:
Patrick (CEO of WSO): [00:00:04] Welcome to the WSO Weekly wrap up where I talk with my team about the five most trending discussions in the Wall Street Oasis community. Enjoy. All right. Welcome everybody, to another episode of the digital weekly wrap-up today. We're just going to have a quick one, three, three of the top trending discussions. Matt, take it away.
Matthew: [00:00:24] Sure. Thanks, Pats. It looks like we have a short bench today. Just Patrick and Nabil on the panel, but let's give it our best crack here. So first topic that was trending on the forums this week was all about becoming a better conversationalist and investment banking. We've had a handful of analysts make the comment that given they're working so much throughout the week that they don't really have much to talk about anymore amongst just their... their peers in the office, but even just friends outside of work specifically. We're hearing some... some talk around, given that they're working all the time, I don't know what to talk about anymore and even just feel odd writing this forum topic itself. So I'm definitely an interesting topic here. Pat, what are your thoughts on how to become a better conversationalist if it's something that you felt during your time as an investment banker?
Patrick (CEO of WSO): [00:01:10] Yeah, a little bit. I mean, there's certain like conversation topics like sports and stuff that you can always kind of lean on if you're into sports or whether it's at basketball or football or whatever season it is. But yeah, I think even just listening to like various podcasts or anything could be a helpful way to kind of just be a little bit more interesting. I don't know, maybe all your certain ones you recommend?
Nabil: [00:01:32] No, I mean, I personally don't listen to a lot, so I don't know what like sports again, like that's always a thing, right? Like whatever sport you watch, pick a team-friendly banter in.
Patrick (CEO of WSO): [00:01:41] Office and somebody said you could just buy more watches to talk about watches. That's an expensive way to be interesting, though.
Matthew: [00:01:49] Yeah, exactly. Well, then I feel like you're kind of living up to that typical banker expectation of those topics you're speaking about. I mean, it's interesting to even think about coming from the avenue of networking. You don't want to you want to find a way to differentiate yourself. And a lot of ways that could happen is just having some meaningful conversation. So, I mean, the only my only word with like sports, they feel like that's typically played out like every... every guy is going to speak about sports. I mean, even every woman who feels like it's a topic that could be brought up. But what would you what would you suggest for even maybe from a networking perspective, not even just like relationships internally, even with friends? Like how about networking? Obviously good conversations, important to leave a lasting impact with others.
Patrick (CEO of WSO): [00:02:34] What do you think, will?
Nabil: [00:02:37] I don't know. Like, it depends. Like what? The networking, I mean.
Patrick (CEO of WSO): [00:02:40] Yeah. Any sort of affiliation. So like if, let's say sports alums. So if you're talking to alums, like talking about like the different clubs, what's going on in campus, that type of stuff I think is interesting and always an easy way to connect or…
Nabil: [00:02:54] Some news-related stuff. You could talk about something non-political. Yeah, Yeah.
Patrick (CEO of WSO): [00:02:57] So I don't know how much people want to talk about like inflation, the Fed, the Fed's rate rises. I don't know if that's the topic of conversation that'll like actually get you strong relationship but…
Matthew: [00:03:09] Well, I think that to your point there, I know we've had conversations where you've gotten some pretty good outreach from people that were referencing your alumni and some cool places on campus. And I know you've been raving about that and how it left.
Patrick (CEO of WSO): [00:03:22] I just thought.
Patrick (CEO of WSO): [00:03:24] I was.
Patrick (CEO of WSO): [00:03:24] Absolutely shocked at some of these sales emails I'm getting now. I don't know if it's a bot or not. It's like, No, it's all custom. But basically they're talking about like hubs on campus and it's a tiny little liberal arts school that no one would know about.
Matthew: [00:03:36] Look how look at the impact it made on you.
Patrick (CEO of WSO): [00:03:38] Yeah, it was.
Matthew: [00:03:38] Like the founder of this business and it's resonating with you, right? So I think I think it's all about putting an effort in, right? Like having a conversation with someone does take effort and maybe even a little bit of prep as kind of silly as that sounds. Taking 5 minutes just to learn about your the individual you're speaking with and putting some prep in definitely goes a long way, both for personal relationships, but even just from a networking perspective as well.
Patrick (CEO of WSO): [00:04:03] Yeah. And just trying to go deep on a few specific things like let's say you love woodworking or building whatever in your spare time, you have some other strange hobby, maybe your chest, you know, and you like to talk about that. Like just finding other people around those interests I think is helpful and actually having being really knowledgeable about it and understanding what's the news in that specific realm makes you more interesting. So, you know, I watch a lot of like Tesla stuff, and you too, because I think it's super interesting what's going on there. So like, I could probably tell you everything that's going on with Tesla, like, so if someone's interested, talk about that like long or short. I think it's super fun to like argue with people over what's going on.
Matthew: [00:04:40] Peloton. I know Peloton.
Patrick (CEO of WSO): [00:04:41] Or Peloton or Peloton. The peloton is a little bit more of a sad story and I lost way too much money on that.
Matthew: [00:04:46] So that's the past couple of months.
Patrick (CEO of WSO): [00:04:48] It's…it's a bitter topic. Yeah, although about 25% yesterday.
Matthew: [00:04:53] Yeah it looks like a double off the lows so far.
Patrick (CEO of WSO): [00:04:57] Yeah.
Matthew: [00:04:57] But yeah. Yeah, exactly.
Patrick (CEO of WSO): [00:04:59] How was the place like, it was going to go bankrupt and now I don't think it's going to I think it's a it's a going concern now, but we'll see. We'll see how long it has.
Matthew: [00:05:06] All right. Well, without getting too off-topic here, guys, in a similar note, another trending topic of the week was around hiring your friends and how one individual got burned by that, unfortunately. So maybe we'll let you get a lead on here for this topic. But do you find is there a fine line you have to kind of walk, whether maintaining that loyalty you have with your friends, but also the loyalty you have to your business there? What are your thoughts on... on hiring friends or at least referring friends to a role?
Nabil: [00:05:34] I mean, I probably for business first, like, yeah, you don't want to like refer to someone who's like not a. Not like we'll live up to your reference and then that becomes an issue. Like professionally, you like it's better to judge your friends properly before you give them any kind of reference you don't want. I mean, there's always I think the post was about like someone who got referred in good faith, but like, that's very tricky. It's like easy to go after the event and be like, Yeah, this guy probably didn't work, but like, did you know, did you really think about it before? Did you just blindly submit like a reference, or did you think it would make a difference? Because there are companies that actually only hire two references, right? Like Steam and all that that do really well. But then the idea there is like the employees kind of understand what what is required at the company and then they bring like minded individuals and but then if you don't know, like them perfectly like…like, you know, are they going to fit in this role? And you make a reference that's like bad for your like or whatever. Sometimes it could leave a bad place and your managers or whoever, you know.
Matthew: [00:06:38] Introduce you. A lot of it introduces a lot of risks.
Nabil: [00:06:41] Exactly.
Matthew: [00:06:42] You don't really have control on or I think that's the scariest part.
Patrick (CEO of WSO): [00:06:45] We just talk about the... the ridiculous actual story, though. The guy brought somebody in for a banking and in the middle of the week, he's gambling in Vegas. He just needs to go to Vegas and he's at the craps tables and he's like, Oh, I'm good. Like, don't worry about it. They're like, Where are you? He's like, Oh, I'm like, He's not even trying to hide it, buddy.
Matthew: [00:07:02] That's crazy.
Patrick (CEO of WSO): [00:07:04] That's I mean, I think that's a weak way. That's an extreme example where the guy is coming into a really high demanding job and doesn't realize it or doesn't care and just thinks, Oh, I have the job now. I mean, the guy's going to get fired. Of course. Yeah. So, yeah.
Matthew: [00:07:20] But now that that's the issue is now the guy that referred him also has that... that bad look on him as well because obviously, people at the firm want you to make sure you're putting the firm's best interests out there as well. So I think you had to Nabil’s point. I think there's definitely some firms that only do referral-based hiring. The way I see it personally is I almost have buckets like within my own personal life, there's my friends, there's also just like acquaintances. And so in a situation, if I was ever put in that, I would maybe just lean on my acquaintances, people I know in my network that I wouldn't necessarily consider a friend, but I know they do good work and based on their experience, I think they'd be a good fit culturally, but also just for the work that needs to get done. So I think I would maybe pull from that pool within my personal network versus my friends. I mean, there's maybe unique situations, but I think it kind of ties back to your writing a high demanding job. Why introduce more risk? Because there's nothing more frustrating than not being able to control something, but have the risk still lie on you?
Patrick (CEO of WSO): [00:08:23] Yeah, to be fair, I mean, the only reason I got back into private equity after I was fired is because a referral from my former colleague at Rothschild. So, like, I would have never gotten back in if there wasn't for that referral because there was like there was some red flags because it was like, why did he leave that first firm so fast? And so him kind of putting his neck out was a big deal. But obviously, I worked hard for after I got hired, so it wasn't an issue for him and he pocketed a nice little referral fee on top of it.
Matthew: [00:08:52] Yeah, of course…of course. In that situation that would probably be considered more of a work friend. Right? There's people that have work. Friends and, exactly, friends. Right? Maybe you grew up with or went.
Matthew: [00:08:59] To...
Matthew: [00:09:00] College with. Yeah. Work friend is... is definitely easier because you least know they fit in there or they have the experience.
Nabil: [00:09:08] Exactly.
Matthew: [00:09:08] It naturally. All right, perfect. Well, then, last topic of the week, guys. Dealing with a terrible bonus. So I know we spoke about this last week. Bonuses are a hot topic, but ultimately from, I guess, just a personal situation pad. How would you deal with you know, you get a bad bonus, you were expecting higher and now all of a sudden you're feeling undervalued and underpaid again in a high-stress role? What are your best plans of action in terms of how to deal with that?
Patrick (CEO of WSO): [00:09:36] I think just trying to keep perspective is really important and then just stepping back and not it's really hard when you're working so long for your work not to define kind of who you are and feel like it's like what you are. It's like I am an investment banker or I am a private equity associate because you're working literally almost all your waking hours are spent in the office or working on that stuff. So it's one thing to say like, Oh, take back, get perspective, but it's hard to actually do. But it's important that in those moments where like you get really kind of maybe down on down on yourself because it was such a disappointing number. On the bonus that you kind of just take perspective in terms of where you are career-wise, how lucky you are to have that role in the learning that you're actually getting from it. And if you're at a place where you've been there for a few years and you haven't been learning, then that's a different conversation. Like, should you even be there? So you're getting a ton of value that's going to pay off. Ideally later in your career, much bigger, and that low bonus number isn't really going to move the needle if you continue to have success if you continue to learn. So I think just keeping that perspective helps make it a little a little bit less painful, although I'm not going to lie. You know, after... after like a whole year of 80-hour weeks.
Matthew: [00:10:48] And you're envisioning… you're envisioning this big bonus or you're hearing about previous years. I think the key to this is understanding as you kind of enter the investment bank career in the private equity space. I think you just have to keep... keep it known in your mind that you're directly correlated to the financial markets. Right? And so in good times, your... your pay and your salary is going to be almost like supercharged, right? So is that just that roller coaster mentality and kind of really just applying that throughout your life? Because I think without getting too philosophical here, that you're going to have your ups and downs throughout your whole life. And I think it's just really just kind of maintaining that... that level mindset. You may have a bad year, just but then again, that's the result of the economy's overall macro conditions. But when times do are prosperous, then you'll be extremely happy about the salary and the work that you put in, and the payoff you'll be getting.
Patrick (CEO of WSO): [00:11:42] Any thoughts on that?
Nabil: No, I agree fully.
Patrick (CEO of WSO): Yeah, I was going to say the other thing that's probably skewing things and making people even more pissed off is not just the weak macroeconomic environment, but is the fact that base salaries got so jacked up during 2021 in 2022 when they all accelerated from like 98k to 90k base all the way up to like 110 to 120 that the banks just like front-loaded in this, recouped it on the back end with the bonuses. And I was I said like there's no way they're going to be paying kids right out of school like over 200,000 dollars as a consistent thing.
Matthew: [00:12:17] You know how many people we've spoken to in the past year, people that are now VPs or even MDs that are saying they wish they got paid this straight out of school. Like I know when you guys joined, it was like that 75 to 80k was your base.
Patrick (CEO of WSO): [00:12:30] 55,000 base when I joined. And I remember I'm old…I'm old, so 55,000 base, I think it was like 65 at some banks, but it was like 55. And then my first bonus was. What was it, 35,000? Dan Which was like, yeah, it was like, it was amazing. And then like, I think they raised my base to like 65 in the second year. And then my bonus was like, Why am I blanking? How can I forget that? I think it was like 65 or something like that. So it's a much bigger bonus in the second year was obviously a jump from there.
Matthew: [00:13:02] But now you got 24-year-old kids rolling in. 200, 200.
Patrick (CEO of WSO): [00:13:05] Grand. Yeah, they're like, they're getting like 110. They're getting 110 base, which is more than like obviously with inflation not quite as severe.
Matthew: [00:13:12] And then everyone is wondering why Rolex prices last year are going through the roof and your Gucci loafers and your Hermes ties, Right?
Patrick (CEO of WSO): [00:13:20] Yeah, I thought there was a funny I think it was funny comment here where they said, like, you should create a fake awards ceremony for yourself and give… give yourself a speech, best effort or reward. And with an acceptance speech.
Patrick (CEO of WSO): [00:13:33] Maybe you could.
Patrick (CEO of WSO): [00:13:33] Stand up in the bullpen and give it to everybody.
Matthew: [00:13:36] Yeah, that'd be interesting. I'm sure if that were to ever happen, that would make its way onto... onto the forums.
Patrick (CEO of WSO): [00:13:42] Yes.
Matthew: [00:13:43] Especially people getting cheerful will definitely get be getting some emails through our support. But yeah. Anyways, guys, we'll keep it short this week. Definitely, a short bench lot going on, but I appreciate that your time to be all your time and we'll see everyone next week.
Patrick (CEO of WSO): [00:14:00] And thanks to you, my listeners at Wall Street Oasis. If you have any suggestions whatsoever, please don't hesitate to send them my way, at [email protected]. And till next time.
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