In Tuesday's Wall Street Journal, Robert Frank details the ways Wall Street's top bankers are economizing as their bonuses decline. Frank notes that while pay in the financial services industry is likely to increase slightly this year, Wall Street, though still poised for a good year, is experiencing the largest drop in bonuses since the start of the financial crisis. The slide comes on the heels of last year's controversial rise in banker pay and amidst Wall Street's unease about regulation and volatile financial markets. Frank adds that new pay structures linking compensation to long-term performance will result in bankers receiving a smaller portion of their bonuses in cash. The austerity measures Frank highlights include:
- Flying commercial airplanes to destinations like St. Barts or Aspen for Christmas instead of taking private jets
- Flying private but "jet-pooling with strangers" or swapping catered in-flight meals for brown bag lunches to save money
- Scaling back on holiday-season purchases of jewelry, sports cars, and yachts
- Buying or renting 6,000- to 8,000-square-foot summer homes instead of 12,000-square-foot properties
The Internet has greeted the story with its usual irreverence:
- Bankers Are Suffering Positively Ruthless Cuts, notes Gawker's Hamilton Nolan, citing the "devastating line that was actually printed in this newspaper story" that "demand for weekly yacht rentals in the Caribbean this winter is 'quite poor." Nolan adds, "When will the big money "Trickle Down" to the workers of Wall Street, eh! ¡Revolucion!"
- Bankers Searching For Deals Is A Slippery Slope, warns Dealbreaker's Bess Levin: "First it's 'who's giving the best deals?' then it’s 'let's wait 'til it goes on sale.' Before you know it you’re sticking to a budget and next year? You’re taking the day after Thanksgiving to line up at have your weave knocked off in a stampede for flat screens."
- Only on Wall Street, says The Wall Street Journal's Shira Ovide: "This is what austerity looks like in the rarified world of Manhattan private schools and chauffeured cars."