LONDON (Reuters Breakingviews) - Being number one doesn’t just matter for individuals. It has profound importance for industries, too. Before the financial crisis, investment banking was the clear career of choice for MBA graduates enticed by the prospect of money, power and prestige. Now they’re more likely to start out for Silicon Valley. Banking has lost its alpha-ness.
Take pay, the ultimate signifier of capitalist pedigree. Investment banking once promised untold riches, but now the tech sector has stats to match. Former Merrill Lynch Chief Executive Stan O‘Neal’s $162 million payoff in 2007 remains the one to beat, but the FANGs – investor shorthand for Facebook, Amazon, Netflix and Google – are catching up. Former Google subsidiary Waymo paid an employee $120 million for a year’s work, according to a legal filing.
Influence, the other classic mark of status, has also passed from finance to tech. True, former bankers like Gary Cohn and Steve Bannon dominate the White House. But SpaceX and Tesla Chief Executive Elon Musk is on President Donald Trump’s business advisory group, as for a while was Uber Technologies’ Travis Kalanick. Influence draws detractors as well as friends. Apple’s run-in with Europe’s antitrust tsar Margrethe Vestager marked tech out as the regulatory world’s new nemesis.
Tech companies have even adopted that other modern sign of eminence: a belief that rapid growth justifies being mean to workers. Google has been accused by the U.S. Department of Labor for extreme pay discrimination, though the search giant says its analysis gives it confidence that the company has no gender pay gap. A recent internal diversity report by Uber revealed a shortage of women and minorities.
There is consolation for finance in all of this. Reaching post-status makes companies better places to work. To retain millennials, and prodded into action by the death of a Bank of America Merrill Lynch intern in 2013, the industry has made soothing-sounding concessions, letting staff spend the odd weekend unmolested. No such joy for coders. A biography of Musk quotes him asking rhetorically whether 10 hours a week is sufficient time to spend with a spouse.
The upshot is that even if banking isn’t the career choice it once was, the industry is no worse for it. By stealing its status anxiety, the tech sector has done those who work in finance a favour.