Additional Coverage:
- Jamie Dimon just made good on his promise to crack down on bankers with hush-hush private equity jobs (businessinsider.com)
JPMorgan Chase Cracks Down on Junior Bankers Jumping Ship to Private Equity
JPMorgan Chase is taking a hard line against its junior investment bankers accepting pre-arranged jobs with private equity firms. In a memo to incoming first-year analysts, the bank’s investment banking co-heads, John Simmons and Filippo Gori, warned that accepting such offers within the first 18 months of employment will result in termination. The memo cited potential conflicts of interest as the reason for the new policy.
This move escalates CEO Jamie Dimon’s long-standing criticism of the private equity industry’s aggressive recruitment practices. Last year, Dimon called the practice “unethical” and hinted at putting a stop to it. While the bank cautioned against it last year, this year’s memo makes it clear: taking a future-dated job offer will result in dismissal.
The bank is also clamping down on junior bankers skipping training to interview with private equity firms. The memo emphasizes mandatory attendance at all training sessions and warns that absences could lead to termination.
Private equity’s recruitment of junior bankers is notoriously fast-paced and disruptive. Dimon has previously expressed concerns about the pressure it puts on young employees, forcing them to make career decisions before they’ve even had a chance to settle into their current roles.
As an incentive for junior bankers to stay, JPMorgan Chase is shortening its analyst program from three years to two and a half, promising faster advancement within the firm.
However, industry insiders are skeptical about the bank’s ability to enforce the new rule. Some believe that determined junior bankers will simply continue to pursue private equity jobs discreetly. One private equity professional noted that top firms typically fill their junior positions quickly, and won’t likely wait for JPMorgan Chase analysts to become available.