Wall St. Bonuses Boom; Luxury Sales Are Proof
Swank restaurants, art auctions, Porsche dealers report good times.
Dec. 14, 2009— -- A year ago, plunging stock portfolios and massive layoffs dampened year-end bonuses on Wall Street, forcing high-flying traders and hedge fund managers to put a lid on lavish spending.
But with the stock market up sharply and financial firms from Goldman Sachs to Bank of America once again reporting soaring profits, big bonuses are expected to return to Wall Street.
Not all financial firms will be doling out big bonuses, of course. Just last week the Obama administration's pay czar, Ken Feinberg, released new rulings that will curb pay packages for some of the highest-paid employees at companies receiving what the administration deems "exceptional assistance" from the government, including AIG, Citigroup, General Motors and GMAC.
President Barack Obama lashed out at Wall Street on Sunday, calling bankers "fat cats" who "don't get it."
"I did not run for office to be helping out a bunch of fat cat bankers on Wall Street," Obama said in an interview broadcast on CBS's "60 Minutes."
Still, luxury retailers who cater to this group are already reporting a sharp rise in interest from monied financial industry employees.
"We've already seen stronger sales," said Wayne Duris, general manager of New Country Porsche of Greenwich, Conn., a Manhattan suburb packed with money managers and investment bankers.
Duris said November sales at his showroom doubled compared with last year and that December is already off to a strong start, thanks to interest from Wall Street traders. His company recently sold two new Porsches -- with price tags of more than $100,000 -- to Wall Street professionals.
"People are feeling like they can spend again as the economy gets a little bit better," Duris said.
There are other signs that bankers are loosening their wallets as bonus season approaches.
A recent auction of modern art at Sotheby's beat estimates by bringing in $182 million. Retail sales at luxury retailers such as Saks and Burberry also rose for the first time in more than a year. And five-star restaurants in Manhattan are once again packed.
One Wall Streeter recently spent about $38,000 to rent out the lower Manhattan restaurant Tribeca Grillfor 100 guests, according to a manager there. Nobu, another expensive eatery in Tribeca, has seen bookings for parties by Wall Street firms soar in recent months compared with the same period last year, the restaurant said.
Another reliable indicator that Wall Street is expecting a big bonus season: high-end real estate sales are on the rise.
Kathy Cole, a property broker with Coldwell Banker Timberline Real Estate in Vail, Colo., said she has already fielded calls from several people in the financial industry wanting to see listings for ski homes with price tags north of $3 million.
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