Paris has become one of the premier places in the world for hiring financial services talent. Just don’t try firing anybody. 

Labor laws in the City of Light are proving difficult for major US investment banks to navigate, the Financial Times reported over the weekend.

Across the Pond and the Channel

For years, London was the financial services mecca of Europe, and that mostly remains the case. Post-Brexit, however, it’s been tougher for London-based traders to offer services throughout the European Union, creating opportunities for multiple rival hubs in places like Frankfurt, Dublin, Warsaw, Amsterdam, and Milan. 

But Paris is the top choice of US investment banks looking to move staffers from the Big Smoke. Wall Street’s biggest banks including Goldman Sachs, JPMorgan, Citibank, Morgan Stanley, and Bank of America moved at least 1,600 staffers to Paris by last spring and planned even more hires, according to the FT. But while French President Emmanuel Macron has encouraged this influx of highly paid (and high-spending) white-collar workers, US banks find the country’s labor protections too restrictive when it comes to decreasing headcount. Banking is a cyclical industry – meaning it closely follows the rise and fall of the markets — but in Paris, losing headcount is a royal pain: 

• By last fall, the biggest US firms had already cut a combined 20,000 employees worldwide. That’s easy enough to do in the States, but offloading traders in France, especially those with salaries in the seven-figure territory, can require dismissal payments more than five times that of London.
• French lawmakers have introduced a reform package, but restrictions on dismissal costs for highly paid bankers have been left out. Representatives from US banks told the FT that in some cases hiring capacity has increased in Paris, but they still need to be able to respond if markets and trading opportunities go south. 

“We’d only really consider going much further in our hiring if French labor rules became truly adapted to these kinds of cyclical activities,” an investment bank rep told the FT.

Attractiveness Bill: US banks won’t hate everything about the reform package. One part of the bill would introduce multi-voting rights for initial public offerings, so startup founders don’t have to lose control of their companies. Under those rules, the French incarnation of Mark Zuckerberg could soon be upon us.

In the latest sign that money is harder to come by in Silicon Valley, Y Combinator is asking for a little help from its friends. 

As it raises its next trio of funds, the famed startup accelerator is inviting past members to invest, according to an Axios report this weekend. The decision comes as the venture capital community continues to grapple with a world no longer fueled by ultra-low interest rates.

Howdy, Limited Partners

Y Combinator — which helped birth such tech mainstays as Reddit, Stripe, Dropbox, and Airbnb — is maintaining tight rules for its investors. Alumni, who will participate as limited partners, must invest a minimum of $250,000, Axios reported, which will be split across three separate funds: one for the initial checks distributed to the next incubator cohort of startups, and two others for additional capital commitments and funding rounds.

While the practice, known as the “stapling” of funds, was pretty typical during the 2010s halcyon period for VCs, it’s now a bit of a flex from one of Silicon Valley’s biggest kingmakers. In fact, venture capitalists are having a hard time finding investors at all:

• US venture capital firms raised just $9.3 billion through the first three months of the year, according to Pitchbook data recently reported by the Financial Times. That’s just 10% of what was raised throughout 2023, which itself was the worst year since 2016.
• Mega VC players have massively decreased the size of recent funds. Just over a week ago, Tiger closed its 16th fund after receiving $2.2 billion from investors; its previous fund, which closed in 2021, had raised over $12 billion.

Y Combinator is seeking to raise a cumulative $2 billion across its three funds, Forbes previously reported earlier this month.

Exit Plan: Investors have seemingly grown weary of pumping funds into the type of startups that previously thrived on access to cheap capital and the promise of a frothy IPO or M&A market. “Unless we see meaningful improvements from the exit market we’re expecting fundraising difficulties to linger and that will put downward pressure on dealmaking,” PitchBook venture capital analyst Kaidi Gao told the FT, and another anonymous chief investment officer added: “It’s tough maths for a lot of investors.”

Boeing’s boss enjoyed a big pay bump last year. 

The aerospace giant revealed late Friday in an SEC filing that outgoing CEO David Calhoun received about $33 million in compensation in 2023, which was a healthy jump from the $22.6 million he took home in 2022.

It’s Good to Be the King

While Calhoun’s pay bump doesn’t seem like the best PR move of all time, given that Boeing is off to a truly annus horribilis that began when a door panel blew off a Boeing 737 Max 9 jet during an Alaskan Airlines flight in January, it’s also a symptom of the heightened arms race that companies find themselves in when trying to hire — and entice — their next CEO. Bestowing a massive salary is a given, but so are add-ons like stock awards tied to higher equity prices, free transportation (probably a given at Boeing), and personal security details. 

That means that sometimes weird stuff like a CEO getting a 45% jump in pay right before the company falls into a reputational crisis is going to happen. Boeing even addressed the awkwardness, saying in the filing that “it bears emphasis that Calhoun’s 2023 awards were designed to emphasize the long-term shareholder value growth.”

But Boeing also signaled that this is a one-off it hopes to never repeat:

• Calhoun declined a roughly $3 million bonus earlier this year and is getting a smaller stock award this year. The company also said it plans to tie executives’ long-term incentive pay to new quality and safety goals.
• Most of Calhoun’s compensation for 2023 comes via stock awards that aren’t realized until he sells the shares, which can’t all be done at once. Boeing’s stock price has already dropped about 27% this year, which makes Calhoun’s package less lucrative.

Told You So: Calhoun’s compensation already came under fire last year when proxy adviser ISS said Boeing had boosted his pay despite reporting negative total shareholder returns. “The company has underperformed over CEO Calhoun’s tenure,” ISS said. Fortunately for Calhoun and many CEOs, underperforming can still be quite lucrative.