Google hire highlights Wall St. talent problem

When Google announced that it hired Morgan Stanley's chief financial officer, the news seemed to underscore a growing shift in power between Wall Street and Silicon Valley when it comes to talent.

Since the financial crisis, graduates have increasingly said goodbye to Wall Street bonuses in favor of careers in tech.

At Harvard Business School, for example, 33% of graduates went into finance last year, down from 44% in 2007. By contrast, 17% of Harvard Business School grads went into tech last year, up from 7% in 2007.

Now, Silicon Valley's allure may also be rubbing off on seasoned Wall Street executives.

On Tuesday, Google announced it had hired Ruth Porat, one of Wall Street's most powerful female executives, to manage the search engine company's finances.

Shares of Google, which has been struggling with rising expenses, shot up on the news, closing up $11.38 a share, or 2%, to $570.19.

Porat, who has been with Morgan Stanley for 28 years, is not the first Wall Street C-Suite executive to make the leap, however.

In 2012, Twitter said it had nabbed Anthony Noto as its CFO. Noto had been the Goldman Sachs banker who helped the social-media company raise $2.1 billion in its initial public offering just nine months earlier.

In December, messaging app Snapchat said it had poached Imran Khan, the Credit Suisse banker who led Chinese e-commerce company Alibaba's IPO.

Facebook's CFO, David Wehner, also enjoyed a long career as a Wall Street banker and stock researcher before he switched sides — first in 2010 as CFO of gaming company Zynga. Wehner moved to Facebook in 2014.

"Wall Street is not viewed as the safe choice it once was," says Dan Eaton, a lecturer in the management department of San Diego State University.

Indeed, banks have been slimming down in an effort to please regulators who have demanded they be prepared to make it through the next crisis without help from taxpayers. Last year, New York City's Wall Street employed 167,800 people, down from 188,300 in 2007, just as the mortgage crisis was starting to unfold.

Pay is also down. Last year, the average Wall Street bonus ticked up 2% to $172,860, down from a high of $191,360 in 2006, and $177,830 in 2007.

To compete, Wall Street needs to improve its treatment of workers, says Alan Johnson of compensation consulting firm Johnson Associates.

"The conventional wisdom for 30 years was that if you want to make the most money you go to Wall Street. But now you can make more money in tech, and you can have a more interesting and better culture," he said.