Wall St. Bonuses Bounce Back

Flickr/<a href="http://www.flickr.com/photos/jtyerse/3954240271/">jtyerse</a>

For indispensable reporting on the coronavirus crisis and more, subscribe to Mother Jones' newsletters.


The vast majority of the country is still slogging through these grim economic times, with 9.6 percent unemployment and anemic economic growth. Last week, claims for unemployment benefits unexpectedly jumped by 20,000, to 457,000, and the Labor Department is projected to announce a higher unemployment rate in its monthly jobs report tomorrow. But on Wall Street, in spite of diminished trading profits, one symbol of excess has fully bounced back: bonuses.

This year’s Wall Street bonuses, the New York Times‘ Susanne Craig reports, are expected to increase 5 percent; more specialized financiers could see bonuses rise by even 15 percent. This new data comes from a soon-to-be-released report by Alan Johnson, who studies finance compensation with Johnson Associates, a New York-based consulting firm. As Johnson told the Times, “I did not expect compensation would come back the way it has. I underestimated the industry’s resiliency.”

Craig rounds up some anecdotal evidence as well to illustrate how the heady, bonus-fueled days on Wall Street are back once again:

One does not have to look far to see that Wall Street has found its stride again. Hot new restaurants are opening, and they are packed with traders and investment bankers. John DeLucie, the chef and one of the owners of The Lion restaurant, one of Greenwich Village’s newest hot spots, said business had been surprisingly strong since it opened in May.

Customers are buying vintage bottles of wine; the restaurant recently sold a 1982 Château Mouton Rothschild for $3,950. “We are seeing a lot of luxury purchases, like vintage Bordeaux, things that we haven’t seen sell well in a few years,” Mr. DeLucie said.

Which sounds an awful lot like this 2004 Times story, “That Line at the Ferrari Dealer? It’s Bonus Season on Wall Street,” from when the housing mania was at its peak:

While the Maybach, an exclusive line of luxury cars made by Mercedes-Benz that starts at $315,000, appears on the wish lists of many bankers, relatively less expensive models from Aston Martin, Bentley, and Maserati have also been popular. Michael Parchment, general manager for Miller Motorcars, a luxury dealership in Greenwich, said demand had been soaring.

”It’s probably up 20 to 30 percent from the same time period last year,” he said. ”Unfortunately, production isn’t up.” The result, he said, are some unhappy bankers.

One more nugget for you, a number to keep in mind: Between Goldman Sachs, Morgan Stanley, Citigroup, Bank of America, and JPMorgan Chase, the amount of money set aside for bonus pay this year totals a staggering $90 billion. That’s actually down about 3 percent from last year, Craig notes—but by comparison, it’s also larger than the GDPs of 157 of the world’s countries.

THE BIG PICTURE

You expect the big picture, and it's our job at Mother Jones to give it to you. And right now, so many of the troubles we face are the making not of a virus, but of the quest for profit, political or economic (and not just from the man in the White House who could have offered leadership and comfort but instead gave us bleach).

In "News Is Just Like Waste Management," we unpack what the coronavirus crisis has meant for journalism, including Mother Jones’, and how we can rise to the challenge. If you're able to, this is a critical moment to support our nonprofit journalism with a donation: We've scoured our budget and made the cuts we can without impairing our mission, and we hope to raise $400,000 from our community of online readers to help keep our big reporting projects going because this extraordinary pandemic-plus-election year is no time to pull back.

THE BIG PICTURE

You expect the big picture, and it's our job at Mother Jones to give it to you. And right now, so many of the troubles we face are the making not of a virus, but of the quest for profit, political or economic (and not just from the man in the White House who could have offered leadership and comfort but instead gave us bleach).

In "News Is Just Like Waste Management," we unpack what the coronavirus crisis has meant for journalism, including Mother Jones’, and how we can rise to the challenge. If you're able to, this is a critical moment to support our nonprofit journalism with a donation: We've scoured our budget and made the cuts we can without impairing our mission, and we hope to raise $400,000 from our community of online readers to help keep our big reporting projects going because this extraordinary pandemic-plus-election year is no time to pull back.

We Recommend

Latest

Sign up for our newsletters

Subscribe and we'll send Mother Jones straight to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate

We have a new comment system! We are now using Coral, from Vox Media, for comments on all new articles. We'd love your feedback.