Hazard of the Trade: Bankers' Health

By LESLIE KWOH

Add investment banking to the list of things that could be dangerous to your health.

A University of Southern California researcher found insomnia, alcoholism, heart palpitations, eating disorders and an explosive temper in some of the roughly two dozen entry-level investment bankers she shadowed fresh out of business school.

WSJ's Leslie Kwoh stops by Mean Street to point out that it might be time to add investment banking to the list of activities that could be hazardous to your health. Image: Scott Youtsey for The Wall Street Journal.

Every individual she observed over a decade developed a stress-related physical or emotional ailment within several years on the job, she says in a study to be published this month.

Investment banking has long been a beacon for ambitious people who crave competition, big money, steak dinners and paid-for town-car service. The 100-hour workweek, these ironmen and ironwomen tell themselves, is just the opening ante in a high-stakes game.

But investment bankers, salespeople and traders are only human. Under the immense stress of their jobs, many suffer personal and emotional problems that escalate into full-blown crises, with some bankers developing conditions that linger long after they have left the industry.

Of course, no one is being drafted into high finance. Aspiring Wall Street stars sign up for the punishing hours with eyes open. What's more, the study's small size and the lack of a control group raise questions about how closely the findings apply to the broader population of roughly 267,000 would-be masters of the universe.

But Lindley DeGarmo, 58 years old, a former director at Salomon Brothers who left the finance industry in 1995 to become a pastor, recalls how managers often worked the younger hires to exhaustion. "The culture was very much that these were dogs' bodies," he says.

John Chrin, a former managing director at J.P. Morgan Chase & Co. who left the firm in June 2009 to pursue an executive-in-residence position at Lehigh University, recalls seeing junior staff gain 30 or 40 pounds within a couple years on the job. When he worked at Merrill Lynch & Co., now a unit of Bank of America Corp., he recalls that one managing director ordered a chauffeur to turn on the air conditioning even though it was out of order, causing the car to burst into flames. The managing director then threatened to have the driver fired. Bank of America declined to comment.

"Maybe the job amplifies some of the tendencies that were already there," he says.

The USC study began a decade ago at two Wall Street banks that granted access on the condition they remain anonymous.

Alexandra Michel, an assistant management professor at USC's Marshall School of Business, shadowed the bankers at the office—sitting next to them, following them to meetings, mirroring their hours and even pulling all-nighters—for more than 100 hours a week during the first year, about 80 hours a week during the second year, and then followed up with in-person interviews.

“By the fourth year of the study, many bankers were a mess. Some were sleep-deprived; others developed addictions.”

The study will be published in the next issue of the Administrative Science Quarterly, due out later this month.

During their first two years, the bankers worked on average 80 to 120 hours a week, but remained eager and energetic, she says. They typically arrived at 6 a.m. and left around midnight.

By the fourth year, however, many bankers were a mess, according to the study. Some were sleep-deprived, blaming their bodies for preventing them from finishing their work. Others developed allergies and substance addictions. Still others were diagnosed with long-term health conditions such as Crohn's disease, psoriasis, rheumatoid arthritis and thyroid disorders.

One mild-mannered banking associate spoke about exploding in rage at a cab driver after unsuccessfully attempting to open a locked door from the outside: "I became so furious that I kept banging against the windows like crazy, swearing at the poor guy. And then I turned around and saw that a managing director was watching with his mouth open. I was so ashamed."

Meanwhile, company "perks" offered to employees, such as take-out meals and car service, had gradually blurred the lines between work and life.

One vice president described work as a never-ending nightmare, waking up every morning and wishing the day before "was just a bad dream." Another vice president said he was so worried others might notice his drinking problem that he would "keep losing half of what they are saying."

By the sixth year, the participants, now in their mid-30s, had split into two camps: the 60% who remained "at war" with their bodies, and the remaining 40% who decided to prioritize their health, meaning they paid more attention to sleep, exercise and diet and set limits on how much they allowed work to consume them.

Roughly one-fifth of the bankers left the profession, she adds. For fear of being exposed, the banks prohibited her from detailing the exact size of the study group, attrition rate and precise start date.

Bankers are at higher risk for burnout and mental-health problems due to the volatility in their profession, says Alden Cass, a New York-based clinical psychologist who specializes in counseling Wall Street professionals. In a study of 26 stockbrokers he conducted a decade ago, Mr. Cass found nearly one-quarter had clinical levels of depression, more than three times the rate among the general population. That was when the economy was booming and compensation levels were high, he adds.

Recent turmoil on Wall Street has served to heighten stress levels. That makes the roughly 40 patients who stream into Mr. Cass's midtown office each week appear even more anxious and high-strung than before.

Most seek help after their personal relationships are affected by the job. Some are addicted to prescription drugs like Adderall or Ritalin. To cope, they resort to "depersonalization," a feeling of numbness toward the rest of the world. A few have been suicidal.

Many have neglected their health for so long that Mr. Cass gets them to go for physical check-ups.

"There's a reason you don't find an awful lot of old investment bankers," says Mr. DeGarmo, the former Salomon Brothers director. "It's a tough life."

Write to Leslie Kwoh at leslie.kwoh@dowjones.com