A Gay, Latino Partner Tests Goldman’s Button-Down Culture
There is the rose-petal birthday present from his husband — a framed card that says “I love you” in Braille. Below that stands a picture of a wiry terrier named Galahad, acquired as a “sobriety dog” when Mr. Chavez stopped drinking in the 1990s. A few feet down, a basketball perches on a shelf.
“Basketball is so not me that I decided to put it up there so people could say, ‘What is Marty doing with a basketball in his office?’” he said, bursting into a peal of laughter.
Mr. Chavez, who is 52 and has a thick beard, represents a departure from the button-down partners of Goldman lore — plutocrats who wore their power on their sleeves and turned the bank into the most vaunted, feared and secretive company on Wall Street.
Goldman’s reputation took a beating after the 2008 financial crisis, when Rolling Stone called the company a “great vampire squid wrapped around the face of humanity.” The current presidential race, echoing with populist, anti-Wall Street messages, is putting the company’s ruthless reputation in the spotlight again.
Today Goldman is trying to change not only that public image, but also some of the central tenets of its culture, like the secrecy and reliance on back-room dealings. The company’s chief executive, Lloyd C. Blankfein, has said he wants Goldman to be thought of as a tech company — putting it in direct competition for talent with the Googles and Facebooks of the world. No one is more central to these efforts than Mr. Chavez.
Mr. Chavez, who was promoted just over two years ago to oversee the company’s 9,000 or so computer engineers — nearly a third of the staff — is pushing the 147-year-old company to, among other things, share more of its data and software with clients. His centerpiece project, Marquee, gives clients access to sophisticated trading data previously available only by phoning a Goldman employee.
Marquee is so closely associated with Mr. Chavez, in fact, that it was initially called “Martee,” a play on his first name. But it has faced internal resistance. Some colleagues complain that the company is handing out valuable information while paving the way for job cuts.
Mr. Chavez has responded forcefully, according to people who witnessed some of these conversations. “He basically said something to the effect of: ‘If your job is a purely manual job and you are just clicking buttons, you should look to upgrade your skills set now,’” said Adam Korn, a trading executive. “He was pretty direct.”
Some of Mr. Chavez’s ideas about openness date to his early years in Silicon Valley, where sharing is a religion. They haven’t always worked out: At one start-up, he proposed publicly posting everyone’s salaries, an unpopular idea.
For Mr. Chavez, transparency is a kind of personal credo. He displays his gay and Latino identities proudly, as well as the Japanese tattoos on his arms. Conversations with him routinely turn to the intricacies of marrying his husband, a Briton, and raising their baby son, who was born to a surrogate in California. He urges his colleagues to open up more as well, arguing that it can serve as an antidote to the negative public image of Goldman.
Mr. Chavez represents broad pressures across the financial industry. The 2008 economic crisis and the regulations that followed it are forcing banks to become less opaque and more technologically savvy and efficient. This has shifted the center of power in the business away from the trading desks, where it was before the crisis, and toward the programmers and engineers — until recently dismissed as the geeks in the back office.
‘Rethink the Whole Chassis’
Particularly at a place like Goldman, the changes can be an uncomfortable fit with business practices and a culture that have been built up over decades. Charles M. Elson, an expert on corporate governance at the University of Delaware, said that Goldman, born as an adviser to corporations, is not used to operating out in the open.
“Fundamentally, it’s trying to refit an old car,” said Mr. Elson, who is the director of the John L. Weinberg Center for Corporate Governance, named for the man who ran Goldman in the 1980s. “It’s not buffing that’s going to do it,” Mr. Elson said. “In this new environment you have to rethink the whole chassis.”
Mr. Elson said that Goldman went through a similar change when it converted from a partnership to a publicly traded company. That led to mass departures and internal battles, though Goldman emerged more profitable. It’s not clear that the current slimming-down and opening-up will lead to the same results.
Mr. Chavez says that if efforts like his are successful, clients will see “a very different configuration of the financial services industry than the one we have now.” Goldman will still have the chief product of a bank — money to lend and invest — but he thinks that the ways in which customers get access to that money will rely more on software and less on the bankers who traditionally delivered Goldman’s services.
Mr. Chavez grew up in Albuquerque with two parents who had not graduated from college and four siblings. All five of the children went to Harvard. His mother, a court stenographer whose parents had come from Mexico and Spain to the United States as immigrants, told Mr. Chavez that, because he was Hispanic, “To get half as far, you have to work twice as hard.”
He was the statistician for the basketball team and read the Encyclopaedia Britannica front to back. “I have no idea how he did it,” his mother, Rose Chavez, said recently. He earned the nickname “motormouth” from an uncle.
There was, though, at least one thing he didn’t talk about: his sexuality. He only came out the day after he defended his doctoral dissertation, in medical information sciences, at Stanford.
The difficulty of being in the closet is part of what convinced Mr. Chavez of the importance of transparency. “It can be hard to be out — or one can imagine that it might be hard, which is more often the case,” he wrote in a memo to colleagues in 2011. “But if that imagination leads to holding back, manufacturing alternative stories of how you spent your weekend or where you spent your time off, that not only impacts your peace of mind, it also has negative consequences for your career.”
When a recruiter from Goldman contacted him in the early 1990s, he worried that Wall Street wouldn’t take to his sexuality as kindly as Silicon Valley had. At the time he worked for a software start-up and had little notion of what Goldman even did.
“I didn’t think much about Wall Street,” he said recently. “I thought I was being clever in getting a free trip to New York City.”
During interviews at the bank, he said, he was impressed by his interviewers’ quick wits. And his future boss took it in stride when Mr. Chavez said he was gay.
Soon Mr. Chavez was plunged into Goldman’s early efforts to automate its trading business with a computer system, SecDB, which is still the spine of its operations. Within the elite trading division where Mr. Chavez was placed, the J. Aron & Company operation — a shop that groomed many of the company’s leaders — he worked with Mr. Blankfein, now the chief executive, and Gary D. Cohn, now Goldman’s president.
Mr. Chavez struggled, though, with drinking, a vice he attributes to an overindulgence in New York’s gay night life. While going through Alcoholics Anonymous in 1997, Mr. Chavez got Galahad, the dog, to try to help him stay sober.
He also decided he wanted a change of scene — pulling a “geographic” in the parlance of A.A. Over the protests of Mr. Cohn, he briefly took a job at another Wall Street company, Credit Suisse, then jumped back into the start-up world, building a company, Kiodex, that wrote software to evaluate energy-trading risks.
Kiodex had a rough ride. First, the tech bubble burst. Then, Mr. Chavez decided to collaborate with Enron right before the energy company went bust.
Sean Patrick Maloney, one of Mr. Chavez’s deputies at Kiodex, said Mr. Chavez’s outsider status gave him an unusual problem-solving creativity. “When you cross lines of difference in life — and you embrace things that to others seem taboo — it absolutely changes the way your brain works,” said Mr. Maloney, who is now a Democratic congressman from upstate New York. “He sees things that others miss.”
Still, his approach would occasionally go astray. It was at Kiodex where Mr. Chavez proposed making everyone’s salary public. Tom Farley, then Kiodex’s chief financial officer, says he talked Mr. Chavez out of that. “The type of transparency that Marty espouses isn’t for everyone,” said Mr. Farley, who is now in charge of the New York Stock Exchange.
Mr. Chavez, for his part, says the episode helped teach him not to prize “radical transparency for its own sake.”
Kiodex eventually recovered. Mr. Chavez sold it and retired to his house on Fire Island. He was 40 years old.
God: Take the Job
In the first weeks of his early retirement, Mr. Cohn phoned Mr. Chavez and asked him to return to Goldman. To consider the offer, Mr. Chavez traveled to a Catholic monastery in New Mexico for contemplation. At a Recode event last fall, he recounted how, while he was on toilet duty, God spoke to him and told him to go back to Goldman.
This is dicey territory for a Goldman partner. Mr. Blankfein was pilloried when he said, in 2009, that Goldman was “doing God’s work.” Mr. Chavez said recently that he regrets his reference to God at the event, but the incident conveys the earnest passion with which he speaks about Goldman.
Mr. Chavez was back at Goldman when the financial crisis hit — at the center of the bank’s efforts to calculate and track its health during those stressful times. Goldman made it through with better results than most rivals. But that success itself caused problems when government investigations uncovered instances in which Goldman profited from the country’s economic pain.
Mr. Chavez recalls friends and family asking: How can you work there? It was a message echoing across the world, with Wall Street under fire for driving the nation to the brink of disaster. Goldman began a charm offensive.
The company hired a new public relations chief, Jake Siewert, who previously worked as a chief White House spokesman under Bill Clinton. Goldman also began advertising campaigns stressing its philanthropic work and the financing it provides for projects like a new basketball arena in Kentucky.
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