This is a tale of two Wall Streets.
Hundreds of thousands of junior bankers are taking cuts after this year’s bonuses were cut.
But the very top 1% are living well off of the soaring stock market and the soaring price of Bitcoin—meaning that the bonus of losing out on inflation hasn’t affected their wealth.
The average Wall Street bonus in 2023 was $176,500, compared with $180,000 in 2022, according to official statistics. That 2% decline is even more painful because of inflation.
Given that approximately 1 in 11 people in New York City is employed by a financial firm in some capacity, according to Comptroller data, any change in Wall Street compensation would have a negative impact on other parts of the city. It can have a huge impact.
Bonuses are paid at the end of the year and typically make up a large portion of total compensation.
For example, a managing director at a top company can earn a salary of more than $500,000 and earn a bonus of more than $1 million in a good year.
But analysts in their first or second year at a top firm, earning about $110,000 a year, found their bonuses were down to $30,000 or even nothing, compared to the $100,000 they expected.
Also, vice presidents at large companies (who typically earned salaries between $200,000 and $250,000 and expected bonuses of at least the same amount) complained that their salaries were approaching $100,000. ing. After taxes, the bonus is just over $50,000.
The vice president of a large company that owns a one-bedroom apartment in the West Village, albeit a walk-up, said his income this year is even lower than last year, so he’s trying to cut back on the number of nights he eats out to two nights. It’s not 3 weeks or he’s 4 weeks he’s 1 week.
With carbone priced at $95 for branzino, Dante’s for veal Milanese at $60, and lamb chops at St. Theo’s for $68 at his favorite spots, the dinner tab quickly reaches $300. That adds up to more than a dollar, and your date’s drink tab can easily reach $100.
Hank Medina, who runs the social media account Litquidity, which has more than 840,000 followers on Instagram, said younger employees have had a “rough year” and are reevaluating their careers in finance. .
Mr. Medina told the Post that he had received hundreds of messages from junior bankers saying they were “dissatisfied and planning to quit” because of the stingy payments.
Some executives who spent decades on Wall Street said they sympathize with young employees who worked 100 hours a week, expecting big pay but ended up being stiffed.
“In New York City, a first-year employee’s salary is just $100,000. They rely on a decent bonus to pay the rent,” says a source in his 60s who has worked as a banker for 40 years. said.
The source noted that, according to one source, the median rent in Manhattan is $4,257. street easy study Since February, he said, “I’ve been thinking about the children.”
While these senior executives may sympathize with ordinary people, many of them are celebrating their own financial victories.
People who have been in the financial industry for decades have experienced that their personal assets, many of which are in the tens of millions of dollars, have generated more returns than their bonuses in a good year. sources told the Post.
Last year, the S&P 500 index rose 30%, the Nasdaq index surged 38%, and Bitcoin, which is invested in by some wealthy people, rose 159% to a peak of more than $73,000.
Even the wealthiest people have benefited from some degree of deflation.
For example, it used to cost $15,000 an hour to charter a Gulfstream at the height of COVID-19, but it’s now closer to $12,000 an hour.
But the discomfort with bonuses was enough to drive some executives to cut back as much as possible.
Kay Gitivin, CEO of luxury car service Go Rentals, needs to use a regular rental service to deliver luxury cars directly to customers at private jet terminals and yacht marinas. No — said people will not give up luxury and convenience. However, we want to reduce costs as much as possible.
“Customers who were renting a Range Rover HSE a few years ago are now renting a Range Rover Sport for $50 less per day,” says Gitibin. “If they were renting an Escalade, now they’re renting a Denali.”
“This year, people are going skiing five or six times a weekend instead of seven or eight, and spending the rest of the weekend at home,” says Peter, founder and founder of Private Jet Card Comparisons, a jet buyer’s guide. said editor Doug Gollum.
Jim Mullen, CEO of the Ritz-Carlton’s Yacht Collection, which offers luxury cruises starting at $2,000 a day and is fully booked through the summer, said people are still spending more on vacations. However, he said he is prioritizing spending on other areas.
“What we learned is that people spend their money differently,” he told the Post. “Consumables were negatively impacted by the small bonus pool, but desire for experience was not.”
