Salomon Smith Barney

Choosing an employer could sometimes become a difficult task. Graduates and job seekers must not rely on popularity alone to draw the conclusion whether or not they want to work for the company. Preferred companies for employment are usually those who offer attractive career paths, continual wage increase, and challenging tasks. As graduates increasingly modernize their thinking, they continue change criteria of their favored employers as well.

Today, the main criteria people seek jobs is generally competitive working conditions. Due to the increasing respect toward values of professionalism, the amount of offered salary and benefits come in the second row since job seekers choose jobs that give them comfortable working with their partners, bosses and subordinates in their new working atmosphere. In order to select suitable companies, graduates and job seekers must perform a small analysis before applying for a certain company.

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Concerning the situation, in this paper, we will discuss a company named Salomon Smith Barney and its potential as preferable employer. In order to asses how future employees will value the company as an employer; we need to assess corporate financial conditions, growth and corporate culture. A comparison with other employers in the same industry is also necessary to provide job seekers best decision making.

II.                 Corporate History

Two young founders established the company Smith Barney, one was a broker, Charles Barney, and the other was an investment banker, Edward B. Smith. Each of them develops their own firm. Barney started his firm in 1873 and Edward Smith started his in 1892. By 1987, Primerica Corp. acquired the company. Afterwards, the company was merged with Shearson Lehman brothers to form Smith Barney Holdings Inc. Today, the company is a full-service investment banking and securities brokerage firm having 7.1 million clients account for almost $ 1 trillion in client assets. The company has 13,000 financial advisors located in 500 locations around US (‘Our History’, 2006).

III.              The Business

The company, Salomon Smith Barney, is currently known as the Citigroup Global Holdings Inc (CGMI). The company provides full-service investment banking and securities brokerage business. Through its three business segments, investment services, private client services and asset management, the company provides a full range of financial advisory, research and capital raising services to corporations, governments an individuals.

The company is subsidiary of Citigroup Inc. The company is a diversified holding company whose business provides broad range of financial services to clients around the world. He following is an elaboration of each of the three segments:

§  Investment Banking and Trading

CGMI’s investment banking services encompass a full range of capital market activities, which include underwriting, and distribution of debt and equity securities for U.S. and foreign corporations. The company often acts as an underwriter or private placement agent. The company also provides financial advice to investment banking clients on a wide variety of transactions including mergers and acquisitions, financial restructuring, etc.

§  Private Client Services

Under the private client services segment, the company provides several services including investment advice, financial planning, and brokerage services to various types of clients whether they are individuals, small and mid-sized companies or large corporations. Revenues are earned from fees in managing client’s assets and commissions earned as a broker in purchase and sale of securities.

§  Asset Management

Under the asset management segment, the company offers a broad range of asset management products and services from global investment centers, including mutual funds, closed–ended funds unit investment trusts and managed accounts. Clients of this segment are from private and public retirement plans, endowments, foundations, banks, insurance companies, other corporations, government agencies and individuals. The company sometime cooperates with Smith Barney network of Financial Consultants and other subsidiaries within the Citigroup structure.

IV.              Financial Analysis

In 2002, the company was named as the foremost distributors of managed account by the Cerulli report. It even leads the closest competitors by more than $ 1 billion (‘Salomon Smith Barney’, 2002).

However, the company revealed weak financial performance during few of the last years. Revenue growth is significantly declining and has become lower than many of its competitors. In 2003, along with the mounting legal suits for the company, Citigroup changed the Salomon’s name into Citigroup Global Markets Inc (Farrel, 2003).

In 2004, the company revealed a controversial lost of $ 531 million. Nevertheless, Citigroup remain referring to the company as a ‘valuable legal vehicles’ for business operations in certain areas (‘CitiGroup Global Markets’, 2005).

V.                Competition

Salomon Smith Barney, currently known as the Citigroup Global Markets Inc. (CGMI) is competing with famous financial services corporations like Merryl Lynch, Lehman Brothers Holdings and The Goldman Sachs Group. According to Yahoo Finance (2006), CGMI is lack revenues compare to their competitors.

In 2004, CGMI has total revenue of 23 billion, while Merryl Lynch has total revenue of $47 billion. Goldman Sachs was recorded to have 2004 revenue of $ 43 billion, while the Lehman Brothers Holdings Inc. has recorded revenue of $ 32 billion. This means that the CGMI has a narrower opportunity of expanding their business to the global world (‘Yahoo Finance’, 2006).

In terms of revenue growth, the company also lacks behind their competitors. CGMI has a growth rate of 11.3 % in 2004, while its competitors have an average revenue growth of 47% in 2004.  Lehman Brothers has a revenue growth of 52 %, Merryl Lynch has a 47% growth and the Goldman Sachs Group has a revenue growth of 45%. This is a better indicator that Citigroup Global Market does not necessary ha a better performance than its competitors (‘Yahoo Finance’, 2006).

The largest number of employee among these financial service companies is that of Merryl Lynch and Co Inc. The company has a total employee of 50,600 by the end of 2004. CGMI is also recorded to have a large number of employees. The company has 40,000 employees, while Lehman Brothers and Goldman Sachs Group have an average of 21,000 employees. The large employee number indicated that the company is popular among graduates and has a good reputation in managing their employees. However, it could also mean that the company has already sufficient amount of human resources that it is not looking for many more. A clearer perspective can be obtained by observing the employee growth indicator (‘Yahoo Finance’, 2006).

In 2004, CGMI has grown in terms of number of employee, by only 2%, while its competitors, like the Merryl Lynch still grew by 5 %. Other competitors, The Lehman Brothers grew 16% in 2004 while Goldman Sachs grew by 12%. These numbers displayed that applying to CGMI will be a lot tougher today compare to applying to its competitors (‘Yahoo Finance’, 2006).

The indicators above displayed that the company is currently unfavorable for job seeker. Revenues are significantly lower than competitors are, and the number of employees is already high, causing employee growth to be significantly low within several of the coming years. In that condition, graduates and job seeker would prefer the Lehman Brothers Inc, the Goldman Sachs Group, or the Merryl Lynch Co Inc, as a future employer.

VI.              Corporate Culture

The company, which formerly known as the Samolon Smith Barney, has been found to have several controversial legal suits. Some of the company’s high-ranking employees are convicted for taking bribes and performing practices that ‘deceive’ clients. For example, in 2005, Thomas A. Moogan, a former high ranking employee of the Salomon Smith and Barney is found guilty of taking almost $ 643,000 in bribes from two companies that did business with the firm (Maull, 2005).

According to 10 investments banks, The Salomon Smith Barney is the worst out of Citigroup’s subsidiaries. In 2003, Citigroup was forced to pay $400 million to cover for Salomon’s fines. The Salomon Smith Barney was accused of delivering fraudulent reports on two clients, Focal and Metromedia Fiber Networks. The company was also convicted for spinning, parceling out shares to top executive that gave significant investment banking business to the firm (Farrel, 2003).

Back to the criteria of good employers that need offer competitive working conditions, I believe that it is not worthy to work for Salomon Smith Barney since the company has no supporting culture for the development of my career.