Junior bankers say they’ll quit after bonuses fall

It’s a tale of two Wall Streets.

Hundreds of thousands of young bankers have cut spending after their bonuses fell this year.

But the richest 1% are living large thanks to surging stock markets and surging Bitcoin – meaning their inflation-beaten bonuses haven’t affected their wealth.

Official figures show that the average Wall Street bonus for 2023 was $176,500, compared to $180,000 for 2022. Thanks to inflation, that 2% drop is even more painful.

Given that about 1 in 11 people in New York are employed in some capacity by a financial firm, according to comptroller data, any changes in Wall Street compensation can have an outsized impact on the rest of the city.

Bonuses are distributed at the end of the year and typically represent the majority of a person’s total compensation.

For example, a CEO of a large company might earn a salary of $500,000 or more and, in a good year, earn a bonus of $1 million or more.

But a first- or second-year analyst at a large company making about $110,000 in salary saw his bonus drop to as much as $30,000 or even zero from the $100,000 he expected.

And VPs at big companies — whose salaries are typically between $200,000 and $250,000 and who expected at least the same in terms of bonuses — also complain about getting closer to $100,000. After taxes, the bonus amounts to just over $50,000.

A vice president of a large company who owns a one-bedroom apartment in the West Village, although without an elevator, said that after receiving even less this year than last year, he tried to reduce the number of times he ate out to two evenings. a week instead of three or four.

At his favorite places – Carbone where branzino costs $95, Dante’s where veal Milanese costs $60 and Saint Theo’s where lamb chops cost $68 – a dinner bill can quickly reach $300 or more and a drinks bill can easily reach $100 for an appointment.

Hank Medina, who runs the social media account Litquidity, with more than 840,000 followers on Instagram, said younger employees have had a “brutal year” and are re-evaluating a career in finance.

Medina told the Post that he received hundreds of messages from young bankers saying they “were unhappy and were going to leave” because of the meager payout.

Some executives who spent decades on Wall Street said they sympathized with younger employees who worked hundreds of hours a week in hopes of getting a big payday only to be penalized.

“First-year employees only make $100,000 in New York. They count on a decent bonus to pay their rent,” said a source in his sixties, who has worked as a banker for four decades.

The source, who noted that the median rent in Manhattan is $4,257 according to a February StreetEasy study, said it “felt for the kids.”

Although these senior executives may feel sorry for the rank and file, many of them are celebrating their own financial victories.

Those who have spent decades in finance have seen their personal assets – which often number in the tens of millions – return more in profit than they would have made with a bonus in a good year, sources said at the Post.

Over the past year, the S&P 500 has climbed 30%, the Nasdaq index has risen 38%, and Bitcoin – which some of the richest have invested in – has surged 159% to over $73,000 at its peak. summit.

The richest also benefit from a certain deflation.

For example, chartering a Gulfstream at the height of the Covid crisis cost $15,000 an hour, while today it’s closer to $12,000 an hour.

But unease over bonuses was enough to push some executives to cut back where they could.

Kaye Gitibin — CEO of luxury car service Go Rentals that will deliver a swanky car directly to customers at private jet terminals and yacht marinas so they don’t have to deal with a regular rental service — has stated that people would not give up luxury and convenience but want to cut costs where they can.

“If a customer was renting a Range Rover HSE a few years ago, they are now renting a Range Rover sport which costs $50 less per day,” Gitibin said. “If they were renting an Escalade, now they’re renting a Denali.”

“This year, people are now going on ski weekends five or six times, not seven or eight times, and staying home the other weekends,” said Doug Gollum, founder and editor-in-chief of Private Jet Card Comparisons, a jet buying guide.

Jim Murren, CEO of the Ritz-Carlton’s “yacht collection” — which offers high-end cruises starting at $2,000 a day and is fully booked all summer — said people still prioritize spending on vacations but reduced their spending in other areas.

“What we learned is that people spend their money differently,” he told the Post. “Consumables were negatively affected by a small bonus pool, but the desire for experiences was not affected.”