Don’t believe the hype: Wall Street is still a ‘white man’s world’

It may not be yet obvious to the naked eye but Wall Street is apparently trying its darndest to attract more women and ethnic minorities into its predominantly white, male ranks. This was news to me when I first heard about the so-called “diversity fellowship” programs that are popping up all over Wall Street these days and that offer signing bonuses to selected undergrads and MBA students that meet the banks’ criteria for “diversity.”

The bonuses, often paid in stages, can mean an additional $75,000 for the women and men of color who qualify, on top of starting compensation – salary and bonus — that typically is around $200,000, and can be more.

Since Wall Street usually expresses its priorities by rewarding, through higher compensation, the behavior it seeks, the firms that are offering more money to women and ethnic minorities appear to be sending the message that they want to change what historically has been a white male dominated business. To be sure, back in my days on Wall Street, there were a few women.

At Lazard, where I worked from 1989 to 1995, there were Christina Mohr and Sandy Lamb, two partners in the banking group (out of a total of around 75 partners), but it was not that far removed from the predominant ethos at the bank, which was still a private partnership founded in 1848, of wondering what possible role women could play on Wall Street.

In my 2007 book about Lazard, I tell the story of Mina Gerowin, the first woman banker at Lazard and her arrival at the firm in 1980, fresh from Harvard Business School, where she was a Baker Scholar. She was also related by marriage to Andre Meyer, the firm’s recently deceased legendary partner. She told me stories about her repeated humiliation at the firm. She often was asked to do work the men wouldn’t do. And the men at the firm did not want to work with her, solely because she was a woman.

The best it got for her, she explained, was when after she had done some work for partner Ward Woods, he managed to give her a backhanded compliment at the year-end review meeting. “I don’t know why she’s here,” Woods said about Gerowin. “I don’t think we should have women here. . . . But you know what? If we’ve got to have them here, I gotta say she did a hell of a good job.”

Times have changed at Lazard. It has been a public company since 2005. It has a market capitalization of around $7.3 billion. It has three women on its 10-member board. And it proudly notes its “MBA Diversity Fellowship” program on its website. Under a picture of three, young white women, the firm said it values “individual differences” and is “committed to fostering diversity among our teams.”

The fellowship program at Lazard, for MBA summer associates in investment banking “was created to help women and other under-represented groups in financial services consider a career in” investment banking. For those non-white male students accepted into the program – there is an application process – Lazard grants them $30,000 at first and then another $45,000 if they are offered an accept a full-time position at the firm.

Other firms do the same thing. Evercore, founded in 1995, is smaller than Lazard and went public a few months after it did. The firm has a market capitalization of around $4.5 billion. It also has a MBA Diversity Fellowship program available to “students who are defined as female and/or underrepresented populations.”

Like Lazard, Evercore offers $30,000 to its qualifying MBA summer associates and another $45,000 if they are offered and if they accept full-time employment after getting their MBA. “Evercore’s mission is to attract and retain the most talented professionals of varied backgrounds who reflect the global marketplace that we serve,” the firm says.

Goldman Sachs is on board, too. Like Lazard, it has been around a long time – since 1869 – and became a public company in 1999. Its market capitalization is around $100 billion. Goldman started its MBA Fellowship program in 1997 for “Black, Hispanic/Latino, Native American or women” for first-year MBA candidates. (Who knew?) It also pays $30,000 at first and then another $45,000 if the MBA graduate if offered, and accepts, a full-time job.

A Goldman spokesman said that “about eight or nine” of these fellowships are awarded annually. Morgan Stanley also offers a “diversity fellowship” program and includes in its definition of “diversity” LGBT students. Other banks, such as JPMorganChase, Bank of America and Citigroup offers similar programs.

Is any of this actually working? Are women, people of color and ethnic minorities finding success on Wall Street? Are they having rewarding and fulfilling careers? Or is Wall Street still just a white man’s world with a thin veneer of diversity layered on for public relations effect? According to Goldman’s latest numbers, from July 2016, 22 percent of the firm’s executives and senior “officials and managers” are women, while 82 percent are white. Only 2.6 percent of that top group at the firm is black and only 3.9 percent is Hispanic or Latino. (Marty Chavez, Goldman’s chief financial officer, is Hispanic.)

Only 5.3 percent of Goldman’s total workforce of around 35,000 is black while 37.6 percent is female. There are two women on its 11-member board of directors. Dina Powell, a former Goldman partner and a former deputy national security advisor, will soon return to the firm as a member of its management committee.

In some ways it’s even worse at Lazard. In banking, there are two black partners – the revered Vernon Jordan and William Lewis, the co-head of investment banking – and one woman, Jean Greene. At the end of February, Lazard announced that it had named 10 new managing directors worldwide – none of whom were women. But, in its public presentations, the firm proudly notes that its 2,800 employees worldwide come from more than 70 different countries.

At a symposium, held at the U.S. Treasury in 2010 about women in finance, Elizabeth Warren, not yet a U.S. Senator, said about the fact that there aren’t enough women on Wall Street, “Sometimes you have to lean back and sock someone in the mouth.”

She was right then and she’s still right. Wall Street is sounding some of the right notes but it’s still got a long way to go to be as diverse and welcoming as it likes to think it is.

Commentary by William D. Cohan, a special correspondent at Vanity Fair and the author most recently of Why Wall Street Matters. Follow him on Twitter @williamcohan.

For more insight from CNBC contributors, follow @CNBCopinion on Twitter.

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