| Goldman Sachs finds unlikely second home
Low taxes, tax breaks and a cheap but well-educated workforce persuaded Goldman to go on a hiring binge in Salt Lake City. JPMorgan and Morgan Stanley representatives declined to comment on the matter. "No one has yet matched what Goldman is doing here," said Kim Smith, former global co-head of training for Goldman's fixed income, currency and commodities division and a finance professor at Brigham Young University. We have groups and teams here who interact with our global operations abroad every day. Goldman's move out West underscores how for major investment banks, proximity to Wall Street means less and less when it comes to support staff, trade processing and even research. Taxing times Many of those functions "can be performed just about anywhere with a computer connection," says Charles Geisst, a Wall Street historian and professor at Manhattan College. The tax advantage is nonetheless important. While which could be good news for Salt Lake residents, it's a far cry from the $400,000 paycheck all Goldman Sachs employees have taken home each year, on average, since 2008. In addition to recruiting new employees from local universities such as Brigham Young, Goldman has transferred from the East Coast some junior-level workers who agreed to take pay cuts to keep their jobs, says a former Goldman vice president who worked in Utah. For believers in Utah, the appeal is broader than costs. State officials boast that an overwhelming majority of Utah residents are fluent in at least one language other than English. "Everyone's vision of Utah is, 'Oh it's just a bunch of Mormons out there,'" says Lane Beattie, CEO of the Salt Lake City Chamber of Commerce, who helped make the sales pitch to Goldman in 2009. But when companies actually come here, then they realize what we're really all about. Goldman set aside $392 million for U. By comparison, its federal tax provision fell 77 percent to $405 million, and its foreign tax bill shrank by 81 percent to $204 million over the same period. Utah Gov. Goldman's image as a Wall Street powerhouse dominated by hard-charging traders and swaggering bankers might seem at odds with Salt Lake City's reputation as a family-oriented town where the bars close early and the Church of Jesus Christ of Latter-day Saints is the most powerful local institution. "Whether it's our distance from New York or our distance from Washington, D. , where the antagonism has grown around Goldman Sachs, it's not happening here," says Becker, Salt Lake's mayor. "There is not the sort of friction with Goldman Sachs that there is in different cities. Some 2,000 miles away from the hustle and bustle. Goldman Sachs finds unlikely second home . state and local taxes last year, 21 percent more than in 2010, even as the bank's profit plunged 67 percent. Several former and current employees say that dozens of technicians, developers, accountants and research analysts on the East Coast have been replaced by less expensive staff in Utah. "Utah may be offering incentives, but the corporate tax rate is incredibly low and an even bigger element of the tax savings is that Goldman can attribute more of its taxable income to the state. I'm positive that $47. " Goldman wouldn't comment on that. Cheap labor Beyond the tax benefits, Utah offers Goldman talent for less than a fifth of what it is accustomed to paying. State officials say the bank exceeds that goal by paying local workers $80,000 a year, on average. "The Goldman guys who are here are more on the operations side, but the investment bankers leverage that to know what companies they need to pay attention to," said Blake Modersitzki, managingdirector at Pelion Venture Partners, a Salt Lake venture-capital firm. Goldman may soon have company. Goldman Sachs ranks as the second-biggest beneficiary behind Procter Goldman's trading technology, accountants for its corporate finance division and analysts to crunch numbers in asset management and global investment research. While Goldman does not yet have any investment bankers stationed in Utah, the presence of potential corporate customers nearby has made expanding there more attractive, Goldman officials said. |
Monday 12 March 2012
Goldman Sachs finds unlikely second home
