A “pathological megalomaniac” deprives an ex-banker of 50 million dollars in bonuses
If you thought you had 50 million dollars in deferred compensation, and you were told on a conference call “deferred compensation sucks…it doesn’t exist anymore,” then you’d probably be pretty mad too. Brendan Sullivan, a former investment banker and private equity technology analyst who went to work for Bill Hwang’s Archegos in 2014, continues Hwang (and his ‘Grace and Mercy’ charitable foundation, a scheme administrator and a number of Archegos executives) and he allowed his lawyer to use some rather capricious language.
At the moment, we only have the plaintiff’s complaint, and the lawyers for the defendants do not seem to have commented on one of the news articles, so keep in mind that we’re potentially only seeing one side of the story here. But it’s certainly worth taking the time for a coffee break to browse the complaint, because it is absolutely full of events and behaviors that, if they happened as described, should be noted as massive red flags for any working relationship.
Sullivan claims Hwang suffers from “pathological megalomania” dating back to his time at Tiger Asia. The whole gist of the complaint is that Sullivan claims he had his arm twisted to reinvest his bonus into a “deferred compensation plan” where the money would be managed by Archegos. He alleges that employees who attempted to defer less than the maximum amount would be reprimanded and accused of lacking loyalty, and that Archegos often made people tell how much they planned to contribute to the plan before deciding their compensation.
It’s a bad sign if true, and it will remind the elders of how Dick Fuld at Lehman Brothers spoke with people he felt weren’t buying enough stock in the company. It’s natural for hedge funds and even banks to want their employees to have their “skin in the game”, but when it turns into a test of loyalty, it should be a sign that the bosses might not care about yours. best interests.
An equally bad sign is a boss who doesn’t share the credit. Sullivan alleges that Bill Hwang was unable to tolerate anyone having ideas outside of him, and that in good years he would say things like “I’m the reason for this result” and “you should pay me to work here”. The complaint also says he wanted employees to demonstrate that they shared his religious beliefs and that Hwang would make personal comments about their weight if he was in a bad mood.
There are dozens of other points in the lawsuit; with the knowledge we now have of the Archegos ending, this makes reading quite difficult at times. But the real story here is probably the one that begins on page 13, at the very beginning of Sullivan’s story. He was an ambitious analyst who wanted to manage capital. Throughout his time in Archegos, the possibility of him receiving a pot of money – even his own deferred compensation – seems to have been held before him, but it never quite happened. In any employment relationship, the question to always ask is whether you are truly moving towards your career goals or whether you have a boss who knows exactly what bait to dangle in front of you to keep you hooked.
Elsewhere, the headlines in London are that there has been a bit of political turmoil. What is remarkable, however, is that the two cabinet ministers who resigned, Rishi Sunak and Sajid Javid, are both former bankers (Sunak was at Goldman then moved into hedge funds, Javid sold Asian equity derivatives for Deutsche Bank).
It’s probably not a coincidence. The pair are friends – Javid is slightly older and has been nicknamed the “Jedi Masterby Sunak, who is much richer. And people in the finance industry tend to have a little more experience in handling a controversial resignation than politicians from other walks of life.
They seem to have handled it well; their letters arrived within minutes of each other, and with no indication that anything might happen in advance. Presumably, there was no headhunter involved, but if the former chancellor and former health minister had set everything up while hiding at a back table in an obscure branch of Costa Coffee, they might have found the experience curiously nostalgic for their banking careers.
Nikolaos Vasilatos moved from JP Morgan’s strategic investments unit, buying stakes in emerging tech companies, to do similar work as head of venture capital at Elysium Management, the former boss’s family office. by Apollo Leon Black (Bloomberg)
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