MDs off the menu?

At the end of this month Goldman kicks off the promotions season and announces the latest batch of managing directors. Will fewer make the grade?

At Goldman the answer will probably be no. The firm's famously healthy third quarter profits should help insulate its aspiring executive directors against disappointment - insiders say it's unlikely the firm will make fewer promotions than in 2006.

Morgan Stanley may also be liberal with titles. Although the bank announced disappointing results for the third quarter after losing $390m on a single day in August, one senior Morgan Stanley insider says the number of MDs announced in December is likely to be comparable with last year: "Managing director promotions can even be a little counter-cyclical - if people aren't being paid, promoting them is a way of maintaining morale."

However, headhunters are less convinced that staff in struggling businesses like structured credit will be given the opportunity to move onwards and upwards. "In a lot of product areas, these guys just won't have the revenues linked to their names to justify managing director promotion," says Lee Thacker, a partner in the financial services team at Heidrick & Struggles. "There are strict criteria for MD promotions at US banks and these won't have been reached."

If there are fewer MD promotes, it won't be good news for anyone in the lower echelons of the businesses concerned. Fewer new MDs typically means fewer new vice presidents (VPs) and longer spent scaling the slippery stick to fame and fortune.