Mention DE Shaw to anyone in the investment industry, and in return, you would get comments describing a hedge fund that is based on computer algorithms, which manages multi-billion dollars of wealth for its clients, and which is also a fortress of an opaque company culture.
A year ago, DE Shaw let go of Dan Michalow, a former partner and managing director who had risen in the Wall Street firm’s ranks quite impressively. After keeping the decision under wraps for a while, the company finally confirmed it to a news outlet when sought after for comment.
From there, a pandora’s box opened up. Both DE Shaw and Michalow maintained different stories. While the company carefully alluded that Michalow was fired due to sexual misconduct, the former employee insisted that while he might have been rude to employees, he had never been a “pervert”.
The back and forth went for a while, with neither party backing down from their stance. When it seemed that the controversy had died down, DE Shaw did something per its reticent company culture and pulled a curious move on its employees.
What is DE Shaw Up To?
According to reports, DE Shaw asked employees to either sign a non-compete by September 16, 2019 or pack their bags to leave with deferred compensation. The reason provided was to get the unconventional hedge fund in line with its traditional counterparts.
But the firm never mentioned that September 15, 2019 was the day when Michalow would be free of his “restrictions on interference” clause, allowing other DE Shaw employees to join him in a new venture if they saw fit.
Since the apparent move for non-compete was tethered to Michalow’s departure and that information wasn’t actively disclosed to anyone, the company’s approach was received with raised eyebrows by industry analysts.
But keeping close to its brand, DE Shaw has not been open about its intentions to employees, setting an example that demands a significant change in the company approach.