He has been hailed as a hero and castigated as a wuss. He has been singled out as a voice for the legions of shat-upon, sleep-deprived Wall Street analysts who slave their weekends away, and he has been lumped in with the new breed of spoiled young Streeters who whine about not having anyone to pick up their dry cleaning.
He is Paul Leung, the reedy, spike-haired 23-year-old investment-banking analyst at Salomon Smith Barney Holdings Inc. who wrote the now-infamous Brutal Memo.
Mr. Leung inadvertently became the talk of Wall Street during the week of April 3 when his lengthy memo demanding a slew of perks for himself and his young colleagues leaked out of the banking house. The manifesto was soon e-mailed to downtrodden analysts and their bosses all over the Street. It was unsigned, but people clamored to figure out who its author was, because it was unusual for a mere analyst to show such moxie.
“I have friends at other banks who are calling and saying, ‘Who is this Paul? He’s my hero!'” one Salomon analyst said. “A friend at Goldman called me and said, ‘You have balls at Salomon!'”
But while Mr. Leung’s fellow slaves on the Street (yes, they’re called ‘slaves’) conferred godlike status on their Spartacus, some banking veterans, recalling their own days of servitude, scoffed at the sense of entitlement pervading the latest batch of young grads.
“My fundamental reaction after reading the memo was that this guy must be a fucking sissy,” said one former Salomon analyst who is now a banker with another firm. “It’s so absurd what they’re asking for. The whole notion of doing whatever it takes to get the job done has been replaced by making sure you get it done in time to get a facial.”
Over the last year an unprecedented number of kids in the analyst program have jumped ship for jobs at dot-coms and other firms. As a result, Salomon has fretted about the brain drain, while the remaining analysts–who, like their counterparts all over the Street, are almost exclusively recent college graduates who do their firms’ grunt work in exchange for an education, business-school recommendations and $70,000 or more a year–gradually discovered they had some real leverage. They didn’t have to take it anymore.
The Brutal Memo suggested 36 changes in the work conditions of the Salomon analysts.
Chief among the complaints were the “general disrespect of analysts,” slow expense reimbursement, a measly $20 cap on weekend working dinners, and the fact that if business class is booked, an analyst must fly coach instead of getting bumped up to first–”another example of the second-class citizenship of an analyst.”
The punch line was that within a week Salomon conceded on most of the requests.
Hans Morris, the popular managing director who is co-head of the bank’s financial institutions group, gave a Powerpoint presentation on April 3 outlining the myriad new perks that Salomon’s bottom-rungers could look forward to in respone to the memo: casual dress every day (“I think we’re the only major bank that hadn’t gone casual,” said a current Salomon analyst), access to the company gym on weekends, bonuses of up to $20,000 for referring a friend to the firm and a new coffee lounge.
Suddenly, analyst culture as Manhattan has known it for a quarter-century seems doomed. Will the bars of Yorkville ever be the same?
Solly brass said they had solicited the memo in early March after Mr. Leung and a supervisor were chatting about an analyst who had quit two days before. But the memo’s frank tone suggested that management was not as eager to hear from the kids as the firm insisted it was. “We are addressing this issue,” the memo states, “because frankly, senior management and firm management seem to [be] ignoring this problem, perhaps thinking it will go away.” It was this combative stance that had people talking about Mr. Leung.
Mr. Leung went to Stuyvesant High School, right in the shadow of Salomon Smith Barney’s TriBeCa headquarters, and graduated last year from Cornell University–the alma mater of Sanford Weill, the notoriously penny-pinching chairman of Citigroup Inc., which owns Salomon Smith Barney. Mr. Leung’s personal Web site at Cornell was warmly titled “Paul’s house o’ lovin.” It included a link to a music-downloading site and scenic photographs of the Big Red campus.
At Cornell, he majored in Applied Economics and Business Management and played an active role in the Asian American Playhouse, which put on Grease last spring (Mr. Leung played Kineckie). He also helped run the Chinese Students Association.
“We always looked to him for advice and guidance,” said Jannelle Choi, Cornell ’00, a member of the club. “He was really good at reaching out to members when they needed encouragement or motivation.”
Mr. Leung did not return phone calls to his office. A Salomon spokesman said the firm wanted to protect the burgeoning young author from unwanted fame. Mr. Morris said that Mr. Leung was simply doing what was asked of him.
“He is absolutely not an aggrieved or miserable analyst,” said Mr. Morris, who started as an analyst at the company 20 years ago. “He’s a highly-regarded guy. And I know he feels terrible about this, but in my opinion he certainly shouldn’t. It’s not his fault that it leaked.”
“Investment banking has always been known as a sweatshop,” said one Wall Street associate. “When you work weekends, 100 hours a week, and pull all-nighters until three or four the following afternoon, and then get a book thrown at you for screwing something up, it’s an atmosphere that’s hard to be upbeat about. There should be a whole shift in the way analysts are treated. You never get a ‘Thank you.’ You just get, ‘I hope you didn’t fuck this up.'”
Thanks to Mr. Leung, that shift may be underway.