Press Sighting: New York Post
October 24, 2005
"Booming profits at Wall Street's most powerful firms have real estate agents, art dealers and luxury car salesman brimming in anticipation of what many expect to be a round of sky-high bonuses."
FAT CAT IS BACK
By Peta Hellard
Published: October 24, 2005
Booming profits at Wall Street's most powerful firms have real estate agents, art dealers and luxury car salesman brimming in anticipation of what many expect to be a round of sky-high bonuses. Last week's blockbuster earnings reports from Citibank, J.P. Morgan and Merrill Lynch set the tone for firms to hand out an estimated $17.5 billion in bonuses to more than 150,000 traders, brokers and bankers, according to executive search firm Options Group.
Tom Angello, managing partner of executive search firm Horizon Group, said he expected this year's round of bonuses to be at their highest level in many markets with some on Wall Street likely to take home up to 15 times their base salary.
"Last year was a good year for everybody but I would expect the compensation to be up to 30 percent higher this time around," he said. "Some traders and bankers and people in hedge funds will exceed 12 times their base salary. Bonuses of $5 million or more would not be surprising."
For many, flashy cars are the favored way to splash their bonus cash.
Noah Lehmann-Haupt, president of Gotham Dream Cars, said the demand to drive the showroom's yet-to-arrive 2006 Ferrari F430 had increased of late with Wall Street workers lining up to pre-book the reservation list for when the $250,000 car arrives early next year.
"I have certainly been getting a fair share of Wall Streeters — mostly in their 30s but some in their mid-20s —looking at hiring or buying in antici- pation of bonus time."<!-- //-->
The real estate market is already showing signs of being another popular choice for bonus-inspired spenders this year.
Figures traditionally show an increase in property purchases in the first quarter of a year compared to the last quarter of the previous year, something many brokers attribute to the delivery of Wall Street bonuses in January or February.
In the first quarter of 2005, the percentage of total residential property sales in New York City below 96th Street had increased by 22 percent on the previous quarter with Upper West Side townhouses proving most popular with a 200 percent increase.
Dottie Herman, president and CEO of Prudential Douglas Elliman, said this year's anticipation of big bonus payouts had seen many Wall Street professionals showing interest in the market earlier than in previous years.
"In both Manhattan as well as in the Hamptons, I am starting to hear from agents that they are already getting the Wall Street calls — and these wouldn't normally start to come in until December," she said.
"We anticipate a very busy first quarter in 2006."
Pamela Liebman, CEO of leading residential real estate firm The Corcoran Group, said she has a married pair of investment bankers looking for a multimillion dollar second home in Bridgehampton and a 27-year-old banker receiving his first bonus and wanting to spend about $1 million on a one-bedroom starter apartment.
While buying tangible assets is a popular way to blow a yearend bonus, for others partying in style is definitely the first preference.
Tatiana Byron, president of premier New York event planner 4pm Events, says she knows of one Wall Street man who is spending about $200,000 to rent a yacht to cruise the Caribbean with 20 of his closest pals, finishing up with a round of golf at a luxury Barbados course.
For another young Wall Street trader, post-bonus plans are to take a dozen friends on a five-star, 10-day safari to Kenya — at a cost of about $12,000 a head.
Copyright 2005 The New York Post
