Increasingly, it's as much about escaping the regulatory headaches of working for a bank as it is the rich payday.
"The attractiveness of being a senior [banking] executive is diminishing," said UBS banking analyst Brennan Hawken. "The scrutiny is higher. The constraints are higher. The PR battles are not pleasant."
Ruth Porat, who served as Morgan Stanley's (MS) chief financial officer for the last five years, is among the latest to make the move from Wall Street to Silicon Valley. She will be leaving the bank at the end of this month to assume the role of CFO at Google (GOOGL).
Other banking execs who have moved to the tech mecca include: Anthony Noto of Goldman Sachs (GS) who joined Twitter (TWTR) as its CFO; Imran Khan of Credit Suisse (CS) who joined Snapchat; Sarah Friar, the CFO of Square, who worked at Goldman Sachs; and David Wehner, Facebook's (FB) CFO, who was a deal maker at Allen & Co., the investment bank.
Although Porat's total compensation at Google is expected to hit $70 million compared to the $13 million she earned at Morgan Stanley last year, more than money may be motivating her decision.
"Ruth's quality of life will probably improve substantially -- especially in the post-Dodd-Frank era," Hawken said, referring to the increased regulation following the financial crisis as well as the West Coast business and lifestyle culture.
Porat was more circumspect when asked to comment about banking regulations during Morgan Stanley's earnings call with analysts on Monday.
"I think that fundamental regulatory change was needed with the backdrop of 2008," she said. "There's been meaningful improvement in the stability and resiliency of the industry. Now it is time to pause, digest and assess to see where we undershot and overshot."
So many analysts on the earnings call congratulated Porat on her new job at Google that Morgan Stanley CEO James Gorman was prompted to joke about it.
"I feel like all of you are going to start following tech stocks," Gorman said.
The allure of Silicon Valley in the face of banking regulations has been acknowledged throughout the industry. While high-level moves have captured the headlines, more worrying for the banks is the loss of lower- and middle-level talent who do much of a bank's day-to-day work.
"The more important trend for the industry is at the more junior/entry levels," said Guy Moszkowski, CEO and banking analyst with Autonomous Research based in New York. "These things come in waves, and we saw it in the late 1990s as well -- the 'cool' factor associated with tech increases, and the financial firms find it harder to get the attention of the best and the brightest on campuses as they look to recruit."
The big banks realize they have to compete with Silicon Valley not just for talent, but for business. JPMorgan Chase (JPM) CEO Jamie Dimon warned in his annual letter to shareholders: "Silicon Valley is coming." He was speaking of the growth and increasing viability of technology based banking-like institutions such as PayPal and LendingClub (LC).
"Exciting changes are happening in finance. It's just not happening in banks," said veteran banking analyst Dick Bove. "If you really love finance, there are so many companies that are cropping up. The conversation is different. It's not: 'What is the latest regulation?' or government's impact on the business."
The Valley also offers finance geeks a less restrictive work culture. "From a Silicon Valley view, New York finance seems like a bunch of people in stuffy offices, dressed in suits, pushing numbers around late into the night," said Gayle Laakmann McDowell, CEO of CareerCup, a firm has advises Fortune 500 tech and finance firms through interviewing and talent acquisition.
"By contrast, Silicon Valley tech companies have casual dress codes, bright and fun office spaces, and they talk about the value of 'work/life balance,'" she said. "Also, they're actually building something new that the employees can show their friends and family."