(fixes typo in third paragraph)
Talk about the end of the salad days. The White House is pledging action against “irresponsible” bonuses for executives at bailed-out Wall Street companies and Senator Claire McCaskill has proposed a law to cap their compensation to $400,000 a year.
Masters of Wall Street should not make more money than the president of the United States, she argues, at least not until they wean themselves from government aid. So what’s a Wall Street executive to do on only $400,000 a year? Here are some ideas – precluding paying rent, buying food, putting gas in the car or getting the poodle a trim:
REAL ESTATE: Thank goodness the property market crash has opened some affordability gaps for the newly upper-middle-class executive. The prospective banking executive could pick up a one bedroom, one bathroom co-op condo on West 45th street, or see if she could get a mortgage on Bernard Madoff’s Montauk $3.3 million East Hampton estate. In this market? Unlikely. Plus, agents will tell you the market price is actually much higher. Pity.
OFFICE OR HOME DECORATION: He could spend a year’s salary on four painted portraits of billionaire investor Warren Buffet. In May, performance artist Michael Israel painted a portrait of the head of Berkshire Hathaway in 10 minutes flat. Six months later, a Minneapolis executive bought it for $100,000 in an eBay auction, with the proceeds going to the non-profit Girls Inc program.
PARTY PARTY PARTY: The future titan of Wall Street may not be able to afford Rod Stewart, who played at Steve Schwarzman’s big birthday bash in 2007 for $1 million, but he could gorge on 10,000 or so of the Blackstone chief’s favorite crab claws, which were going for $40 per claw back in the heyday of high finance.
SUPERBOWL: StubHub had a Super Bowl luxury suite going for $83,340, so a bank exec could still easily play the part of overpaid sports junky and still have more than $300,000 to lose on the outcome of the game. If he wants to be a bit more frugal, club premium seats are going for $10,511 a pop. If ego demanded, he could afford 4 seconds of TV advertising.
GETTING OUT OF DODGE: The cost of operating the private jet fleets, while difficult to estimate, could still be managed by the bank exec of tomorrow. NetJets Inc, owned by Warren Buffett’s Berkshire Hathaway, was selling fractional ownership shares of private planes for a minimum of $406,250 back in December, so that’s out, but through Marquis Jet, it is possible to purchase 25-hour increments of time in NetJet planes for $115,900, or roughly $4,600 an hour. Virgin Galactic was offering tickets to space for $200,000 in 2006 through Park Avenue travel, but like the plan to cut Wall Street executive pay, space travel is just an idea at this point.
MAKING IT BACK: Lloyd Blankfein, CEO of Goldman Sachs, earned more than $68 million in 2007. At $400k it would take him 170 years to get back to the good old days.
OTHER AFFAIRS: Spitzerish peccadilloes? Shoe collections? A few fine bottles of wine? How would you deal with a crummy $400,000 day job on Wall Street?