January 29, 2009Do Shrinking Wall Street Bonuses Mean Less Head-Turning Cars on the Road This Year?

For months, those in-the-know have predicted that Wall Street bonuses would drop precipitously this year from one year ago.  2008 bonuses have now been allocated and are being paid out this week and, sure enough, this year’s bonus payouts ($18.4 billion) amount to about 1/2 of last year’s total (about $32.9 billion).  What I have not yet seen addressed (and I will continue to scan for articles) is anything that considers the average bonus per worker.  With thousands of employees having been laid off in the finance sector, how much is the drop in bonus payouts a factor of the drop in employees to pay bonuses to? While many who worked at Lehman and Bear Stearns got picked up by other firms, many did not, a factor which may have contributed to bonus diminution.  Same is probably true for the consolidation efforts at Bank of America/Merrill Lynch and elsewhere.  

The presence of premium car dealerships in Manhattan’s Financial District and along Park Avenue in Midtown has long been associated with bonuses.  Often, finance guys (or gals) will take the money they received and go buy a ridiculous (read: awesome) car.  This explains the Audi R8, Mercedes SLR McLaren, and the rotating selection of Maserati and Ferrari autos on display on the windows of Manhattan dealerships.  So, will this ritual be affected in 2009?  It remains to be seen. But I’ll be paying attention.