Bankers can't possibly afford NYC on a mere $500K/year

The lead story in today's New York Times Styles section is all about the tremendous difficulties that executives at bankrupt companies receiving public bailouts will face if their salaries are capped at only $500,000. For example, many of these people might have to give up necessities like armed chauffeurs, twice-annual $16,000 vacations, and $4,000,000 summer homes. It's really heartbreaking.
Barbara Corcoran, a real estate executive, said that most well-to-do families take at least two vacations a year, a winter trip to the sun and a spring trip to the ski slopes.

Total minimum cost: $16,000.

A modest three-bedroom apartment, she said, which was purchased for $1.5 million, not the top of the market at all, carries a monthly mortgage of about $8,000 and a co-op maintenance fee of $8,000 a month. Total cost: $192,000. A summer house in Southampton that cost $4 million, again not the top of the market, carries annual mortgage payments of $240,000.

Many top executives have cars and drivers. A chauffeur’s pay is between $75,000 and $125,000 a year, the higher end for former police officers who can double as bodyguards, said a limousine driver who spoke anonymously because he does not want to alienate his society customers.

“Some of them want their drivers to have guns,” the driver said. “You get a cop and you have a driver.” To garage that car is about $700 a month.

A personal trainer at $80 an hour three times a week comes to about $12,000 a year.

The work in the gym pays off when one must don a formal gown for a charity gala. “Going to those parties,” said David Patrick Columbia, who is the editor of the New York Social Diary (, “a woman can spend $10,000 or $15,000 on a dress. If she goes to three or four of those a year, she’s not going to wear the same dress.”

Total cost for three gowns: about $35,000.

You Try to Live on 500K in This Town


  1. Bear in mind, somewhere in a village in the Sudan or Bangladesh or the like is someone who would similarly mock you for your dependence on your smartphone or netbook. Or internet connection, for that matter.

  2. Somewhere in every village in Sudan or Bangladesh there is a peasant who knows more about cell phones than you do.

  3. Does your hypothetical Bangladeshi pay tax that is funnelled into my bank account to keep me from going under?

  4. If they don’t like it then they can get other jobs.

    Many others will possibly run these companies for a profit on that money and maybe we will be getting some new blood into these positions.

    Are we running businesses or are we preserving their Fat?

  5. @4 again, a little less glibly– a very large number of people worked very hard (and frequently rather underhandedly) to put you in a situation and society where you can count yourself as one of the richest few percent of the world’s population.

    The global median income in 2005 was $1700 bucks a year. Someone in a first-world country making twenty times that wouldn’t look around and call himself ridiculously wealthy, and would likely be very upset if someone suggested capping his income to benefit countries who got the short end of the global economic development stick. (And yes, it was a stick).

    Admittedly, the latest data I’ve managed to lay my hands on are a bit out of date (2005), but 500k a year in relation to the median personal income in the us would a ratio of 15.6. Anybody currently making more want to cap their income at 26,500 a year and send the rest to Darfur or someplace similar?

  6. Kicking the rich is more fun when they’re on top, with egos in full bloom. Kicking them when they’re down isn’t nearly as much fun.

  7. If your company is making money, then spend away. If not, then too bad. That is how we all live…in reality. When the money is coming in, it can be spent (and hopefully saved). When the coffers run empty, you draw on your savings. Simple economics. I would hope a banker can fathom it.

  8. I think their salaries should be capped at zero dollars per year.

    Save the money for people who actually produce goods.

  9. Where’s my violin when I need it?

    I somehow survive on my 800 a month disability with a really nice 2 bedroom apt, and these guys are crying about _only_ 500k?

    Boo hoo, cry me a river.

  10. @8 :

    Kicking them when they’re down?

    I’ll tell you what : you can kick me once a day for $500,000 a year.

  11. Am I the only one who sees a problem with spending $10,000 on a dress for a charity ball?

    And, for crying out loud, take public transit like the rest of us!

  12. If they want more than $500K a year, there’s a very easy answer: Convince their shareholders that taking the bailout money is a bad deal.

    If their company requires government cheese to operate, I think it’s fair we place income limits on the recipients of that cheese. (Does that make it any clearer for the few remaining trickle-down fans out there?)

  13. @9 There’s no schadenfreude when they’re on top. Aah, delicious schadenfreude.

    As so often happens on the internet, I wish that NYT article were in reality clever satire. Sadly, it probably isn’t.

  14. People are still surprised that a capitalist economy leads to such wasteful over-indulgence in the ‘elite’ clas?


    And if this is the society you WANT…why are you arguing about $10,000 dresses and multiple-$8,000 vacations, and $125,000 drivers?

    Granted, it’s grotesque excess, but…oh, heck, a Spock quote jumps to mind…

    “What you want is irrelevant, what you have chosen is at hand”

  15. The sad reality is that these people want for absolutely nothing in their lives, and contribute little or nothing to the world. They have been on top, are on top, and after the dust of this catastrophe (which they, among others, caused by virtue of their greed and stupidity) settles, they’ll still be on top. Screw ’em.

  16. While the NYT article is a nice bit of rabble rousing, let’s not ignore the fundamental issue: executive compensation has become divorced from actual performance.

    I don’t claim to know what constitutes appropriate compensation for the successful stewardship of a multi-billion dollar corporation.

    But I do know that the noises that Congressman Frank and Treasury Secretary Geithner are allegedly making about extending Federally-mandated compensation restrictions to all US companies, regardless of whether they receive federal assistance or not, are a recipe for bureaucratic mediocrity and stagnation, not progress and success.

    Such a move would perpetuate the problem, because performance would continue to have little bearing executive compensation.

  17. Shorter: “Poor people have it so easy!”

    But really, I’m enough of a capitalist to say that you are free to spend your own money how you choose.

    But Wall St. is no longer talking about how to spend its own money. Its talking about how to spend taxpayer money, so they no longer get to choose. The taxpayer (via the gov’t) does. If they don’t like that requirement, then they don’t have to take any taxpayer money. No one is forcing them to take it.

    No one deserves to live a lifestyle that includes multiple houses, full-time drivers, personal trainers, and $15k dresses on the taxpayer’s dime for running a company into the ground. But anyone who can run a highly profitable company is free to do with their own earnings as they see fit (as long as its in accordance with the law).

  18. Fire them all for even suggesting that they need all those things. They have many underlings who would be more than happy to do at least as good of a job for that money. I mean, these are the people who broke everything, why do they even have jobs? Because of the competition in hiring economy-ruiners?


    Bear in mind, somewhere in a village in the Sudan or Bangladesh or the like is someone who would similarly mock you for your dependence on your smartphone or netbook. Or internet connection, for that matter.

    The problem with this heavy handed analogy is it completely ignores the fact these executives mentioned are mostly bankers who have been bailed out by the public and who have used these funds to benefit themselves and not much else.

    In most any other small scale system you are simply rewarded for the work you do and punished by lack of reward by failing.

    At the end of the day, few if any of the idiots who have helped caused this mess have been punished legally or even socially. Most of them will live the exact same lives they always have lived, yet people who they have bled dry via their incompetence have had their lives destroyed.

    In “It’s a Wonderful Life” George Bailey lives a modest life and the failure of the savings and loan he ran would have destroyed the lives of his customers as well as himself.

    Will the head of Citigroup live in the back of a limo and take showers at the YMCA while scarfing down instant noodles somewhere? Hell no.

    That’s what’s sick about all of this.

    If you can’t figure out how to live for $500,000 a year, you shouldn’t be in charge of money.

  20. This is small potatoes, nano-potatoes, compared to Hollywood. Michael Eisner got a ~ $138,000,000 goodbye kiss after 14 months of running Disney into the ground. Keanu Reeves got ~ $97,000,000 per Matrix film (including salary and percentage.) At least the bankers can probably count to ten on the first try.

  21. Brooklyn here, making well under 100K in our crappy apartment. I have two words for them: go die.

    No, I have more words. I’ve been here 17 years. WHen I got here, I thought this was supposed to be a town full of artists, punks, hipsters, people that live on the edge, in dirty, cheap apartments.

    The FINANCE industry KILLED new york. made it a cheap, tawdry, conformist suburban mall. Please, take your millions, get in your chauffeured cars, who terrorize cyclists and pedestrians daily, and drive to some place where you are WANTED. Just go away.
    P.S. I can find childcare less than 45 grand a year. Chumps.

  22. I can understand… the mortgage on their primary residences. I can understand the need for a bodyguard, especially with all the negative feelings towards brokers and CEOs and the like. Heck, I can even /barely/ understand the personal trainer.

    I can’t understand the summer home. Or the vacations. Or the ludicrously expensive dresses (does the difference in appearance between a 1K dress and a 10K dress really justify the 9K price difference? Really?). And maybe I’m a bit biased here, but, why do you need a personal limo? It’s slower than public transport, considering where their primo apartments are.

    Yes, there are people below us who could look at us and laugh at what we ‘need’, but what we have, we’re earning with our own work (I hope), not on a bailout plan. Part of getting bailed out is that beggars can’t be choosers.

  23. Of course bankers can live within the 500k cap but it’s all about negotiating. Why accept what’s offered if they can finagle more? If they showed no reluctance at taking the cap, people might suggest that they could get by on less. The art of the deal is a time-honoured tradition.

  24. $500K a year, I could live like a God! Take the Subway, join the Y and buy a used push diesel Winnebago. Got the major bases covered, well except for the entire month of August in Edinburgh for fringe but hell I have friends with flats there…

  25. I live in New York City and I make about $500k a year and I can tell you that the “lifestyle” described in that ridiculous article is taken out of some fantasy Sex and the City episode.

    Armed bodyguards? $4M house in Southhampton? $15k dresses? Living like that takes huge money in this crazy city and is reserved for the very, very rich (i.e. way more than $500k per year).

    The reality in America’s most expensive city is this if you make $500k:

    -Nice 2-bedroom apartment in a safe neighborhood
    -Maybe you might own a car and keep it in a garage
    -Dinner/take-out once or twice a week
    -Subways/buses for most of your travel
    -Summer vacation on the Jersey Shore
    -Shopping at Macy’s and Banana Republic
    -And save a little bit every month

    $500k anywhere else in America (even SF or Boston) is big money but not in NYC. You won’t starve, and you won’t struggle but in the Big Apple you ain’t living the lifestyles of the rich and famous on $500k.

    Jay in NYC

  26. I like how in the banking world when you fail you expect to be rewarded exactly the same as if you succeeded. And then complain when your gift of further employment is too cheap when you should have no job/company if you played by your own rules.

  27. Hey maybe if they spent a little more time working and a little less time living it up, they wouldn’t be on government assistance. Last time I checked people on welfare aren’t going on $16k vacations.

  28. Well, if they can’t do it for $500,000 a year, I know some guy in India who can probably do it. In fact, I just got off the line with customer support and I’m fairly sure he’d be willing to relocate.

  29. @32 I think that was the point of the article – it takes much more than 500K to live the way the bankers are accustomed to living.

    That said, the lifestyle you describe sounds about like ours here in NYC (although we vacation in Europe, not the Jersey Shore) and we get by quite comfortably on ~250K (no debts, putting a bit away each month). I feel like 500K would be quite a step up for us; not that we’re really into luxuries, but we’d certainly be more than merely “well-off” at that income.

    Hehe… the captcha is “New-York Married.” Very appropriate.

  30. If I have no vote in a bailout, then I’m actually okay with the money going to personal trainers and hair stylists and drivers and the like, because those people are not rolling in dough and need the work.

    It’s when gobs of money get pocketed by consultants or lobbyists that I lose my cool. That’s one reason I support the government creating jobs (CCC style) because the money goes directly to the person working, without some jerk-off middle-man.

  31. The cash incentive for the irresponsible business practices that got us into this mess must be removed. Over the past two decades executives have justified their absurd salaries and even even more absurd bonuses by focusing exclusively on short term gains while completely ignoring long-term consequences or using deceptive accounting practices to cook the books. Until taxpayer money is paid back, it’s only reasonable that those, who have run these companies to their own obscene private benefit and to the public’s colossal detriment, should have their salary limited.

    Or, to put it in a slightly different fashion:

    For too long the greedy have been suckling at Mammon’s teat; that teat having run dry, they deserve no sympathy now that Uncle Sam refuses to replace it.

  32. The problem with this sob story is that for someone well established in the world of high-finance, their salary is garnish on the top of their total earnings (not including any spouses’ money, inheritance, and private consulting they may do).

    I believe the new initiative would cap total compensation for these people at $500k, which I assume would include stock options, bonuses etc. So that is a serious remuneration ceiling, but if you are in such a position to be subject to this rule, one imagines you would have a) savings (the interest alone could probably keep you close to a few 100k a year if you are lucky) b) investments (that hopefully haven’t pancaked) c) stock options (that hopefully aren’t worthless) d) etc… all of which will provide you with sufficient reserves and probably even ongoing income that should be able to accommodate most (all) of your lavish needs.

    In short, if you are in a position to be having the type of expenses mentioned, salaries must be a small part of your total income. Thus I have no sympathies.

    But this whole compensation issue is truly a red herring. A decent first step, and subsequent sideshow, there are many more fundamental issues that ought to be at the forefront if one wants to salvage the US.

  33. @ Antinous #25:

    …Keanu Reeves got ~ $97,000,000 per Matrix film (including salary and percentage.) At least the bankers can probably count to ten on the first try.

    If word had got out that they used taxpayer money to make “The Matrix Revolutions” there probably would have been rioting in the streets.

  34. @32:

    I won’t deny that NYC is disproportionately expensive. Rents are on the high side, and the general cost of living does tend to be higher. However, it’s extremely possible to live (well) on less than 100k a year.

    Living Downtown is probably going to always be too expensive for mere mortals like ourselves. However, living in Brooklyn or Hoboken isn’t too bad. If that’s still too much, go pick a city along an NJTransit, MetroNorth, or LIRR line. The commute isn’t terribly short, but is fairly relaxing. I did it for a time, and didn’t mind it all too much. If you’re willing to live in Newark, the PATH is fast and cheap. If you insist on driving, tolls and parking fees aren’t ridiculous if you can manage to carpool with 2 or 3 other people.

    NYC is expensive, though small sacrifices tend to pay off big-time.

  35. The poor bankers need to take a look at Haruka Nishimatsu, CEO of Japan Airlines. He cut his salary to $90K and cut back on ‘luxuries’. These weasels in charge of the banks should be fired for their incompetence. Be glad they are being offered $500,000 (I’ll never see a salary that high) and not a room at the Metropolitan Correctional Center.

  36. @32: honestly? a lot of what you describe certainly sounds like upper class living to me. Maybe you’re not doing as well aws some of the megawealthy bankers, but you’re still ahead of most of us.

  37. I can understand the seething at the giant expenses, however the money is getting spent on some valuable and valid things.

    Cutting the $125K out of your budget for an armed chauffeur means one chauffeur is out of a job.

    One wealthy socialite cutting $12K for a personal trainer may not put him or her out of business, but losing three or four clients like that would be another job lost.

    a 16K annual vacation budget is five times more than I’ve spent on vacations in my entire life, but then again, I use coupons and search for deals, the hospitality industry isn’t going to miss me cutting back. How many travel planners, private jet pilots and mechanics, and spa employees are going to get laid off while America wallows in a little social justice?

    I don’t want my tax dollars being spent on those things any more than the rest of you, but then again I didn’t want my tax dollars spent on bailing out wall street in the first place.

  38. Jay in NYC suggests that $500K/annum is not big money in NYC. While I agree with the general premise that it’s comparatively worth less in NYC than in other parts of the country, to say that one could only live a barely middle class existence in the city for that kinda scratch seems…well, ridiculous.

    The salary info I’ve seen suggests that a salary $500K in Manhattan is roughly equivalent to $275-300K in my neck of the woods (Omaha, NE). If you’re making that kind of money here, you’re doing really, really well. $500K is $41,667 a MONTH. That’s most of the average annual FAMILY income nationally.

    And talking about housing…just a quick perusal of shows that it’d be reasonably simple (assuming 10% down) to buy a pretty nice place (2br/2ba, 1300SF) on W. 57th and 2nd Av. for about $850K, or around $5K/month. Granted, it’s a cracker box compared to what that could buy outside of Manhattan, but $5K is a pretty small fraction of your monthly income.

    In short, cry me a river.

  39. Nobody is forcing these people to take government money. Salary restriction for government funding at the top of the heap is very fair even though I do not think that government ought to fund these businesses at all.

    Just as there are limits to how much one can make when one is poor and in need of government funding there should be caps be in place for how much top earners in a corporation or business should make before they can ask for government assistance.

    It is not up to general taxpayers to decide how people spend money—unless individuals and businesses are asking taxpayers for financial assistance. The article is nothing but a boo-hoo column.

    These very wealthy individuals are essentially asking poor and in debt Americans to allow them to continue to fund their extravagant luxuries when our leaders trusted them to use the money to help the economy improve but they did not and have not. If they had done what they promised or even began working to use the funds to solve the problem then nobody would be wondering where the money went.

    How can the bank CEO’s expect the continuation of government aid without restrictions on what qualifies them for aid.

    –and yes I realize it is expensive to live in NYC however if a hard working inner-city teacher can do it on a teachers salary then……perhaps the CEO’s quality of life standards need to be brought a bit more into perspective.

  40. If you like that article you’ll LOVE the Wells Fargo add on front page of the second half of the A section.

  41. I am actually ever so slightly sympathetic. If you suddenly hacked my salary in half (and some of these people are about to lose a LOT more than half), I would be in trouble. It isn’t that I can’t live on half of what I currently make, it is that for me to untangle from the various commitments to shell out cash I have already made would be hard, and in some cases impossible.

    Just consider an executive who is paying a massive mortgage that is eating up a good portion of his current salary. Suddenly he can’t pay it. He can try and offload it, but in the current market he might not be able to offload it for enough to pay back his debts. You almost certainly will have some of these people going bankrupt not because they chose not to change their life style, but because they simply can’t pay for commitments they have already made.
    Of course, my small sympathy aside, I say tough shit. When they are spending their own money they can pay themselves whatever asinine salary they want if their shareholders don’t care. When I am forced by the government to reach into my own wallet to bail these jerks out, they can suck it up and go bankrupt like the rest of us.

    The only real danger to the rest of us I see is for New York and Chicago. Both of these cities have a sizable hunk of their population that depends on these people economically. These places could be hit extremely hard. You might not care if a high end restaurant closes down, but I bet the waiters and cooks do. This sort of thing can trickle down the pain, especially in places where there are numerous rich folks wandering around. Again though, I say tough shit. My wallet has already bailed out enough people. I would like to save the cash that is left for bailing my own ass out.

  42. They are dinosaurs who haven’t realized yet the climate has changed and there’s nothing left to support them anymore. They putter around the dying jungle gloom hoping for another last meal, but the mammals are already clamoring over their toes.

    I am reminded of Phil Ochs’ Ringing of Revolution for some reason:

    G C G C
    In a building of gold, with riches untold,
    G C G – C
    lived the families on which the country was founded.
    G C G C
    And the merchants of style, with their red velvet smiles,
    G Em D
    were there, for they also were hounded.
    G C G C
    And the soft middle class crowded in to the last,
    G Em Bm
    for the building was fully surrounded.
    G C G D7 G
    And the noise outside was the ringing of revolution.
    Sadly they stared and sank in their chairs
    and searched for a comforting notion.
    And the rich silver walls looked ready to fall
    As they shook in doubtful devotion.
    The ice cubes would clink as they freshened their drinks,
    wet their minds in bitter emotion.
    And they talked about the ringing of revolution.
    We were hardly aware of the hardships they beared,
    for our time was taken with treasure.
    Oh, life was a game, and work was a shame,
    And pain was prevented by pleasure.
    The world, cold and grey, was so far away
    In the distance only money could measure.
    But their thoughts were broken by the ringing of revolution.
    The clouds filled the room in darkening doom
    as the crooked smoke rings were rising.
    How long will it take, how can we escape
    Someone asks, but no one’s advising.
    And the quivering floor responds to the roar,
    In a shake no longer surprising.
    As closer and closer comes the ringing of revolution.
    Softly they moan, please leave us alone
    As back and forth they are pacing.
    And they cover their ears and try not to hear
    WIth pillows of silk they’re embracing.
    And the crackling crowd is laughing out loud,
    peeking in at the target they’re chasing.
    Now trembling inside the ringing of revolution.
    With compromise sway we give in half way
    When we saw that rebellion was growing.
    Now everything’s lost as they kneel by the cross
    Where the blood of christ is still flowing.
    To late for their sorrow they’ve reached their tomorrow
    and reaped the seed they were sowing.
    Now harvested by the ringing of revolution.
    In tattered tuxedos they faced the new heroes
    and crawled about in confusion.
    And they sheepishly grinned for their memoroes were dim
    of the decades of dark execution.
    Hollow hands were raised; they stood there amazed
    in the shattering of their illusions.
    As the windows were smashed by the ringing of revolution.
    Down on our knees we’re begging you please,
    We’re sorry for the way you were driven.
    There’s no need to taunt just take what you want,
    and we’ll make amends, if we’re living.
    But away from the grounds the flames told the town
    that only the dead are forgiven.
    As they crumbled inside the ringing of revolution.

  43. $500k a year plays well in Peoria. But this is theater.

    I’m a freelance advertising executive and my wife is a staff secretary. In recent years our household income has been between $200k-$275k and that has put us in either a small (900 sq. ft.) 2 bedroom in a walk-up tenement building, or a one bedroom apartment in a medium market elevator building, or a 450 sq. ft. studio apartment in a white glove building. And we’ve never made enough to justify having a car in the city.

    People outside of New York City have no comprehension of how expensive it is to live here. Wages are also skewed relative to the cost of living.

    $500k in New York is not living large. It is merely comfortable. People on this thread talking up how they could live like kings on $500k a year. You don’t live in New York. These companies are in New York. Live like kings on that money? In New York City? The hell you could.

    Now don’t get me wrong. These CEOs are living in fantasy land, and they brought this on themselves. If they had shown a modicum of humility or even pretended momentarily not to be self-entitled pricks, they wouldn’t be in this situation. Executive compensation for the past decade has gotten so out of proportion, and lost all connection to performance.

    If they’re living off the tax-payer dole, then let them “hurt” on $500k a year. It just means they’ll tap into their $100M+ savings to maintain their lifestyle while they look for another job or wait out the recession/depression.

    I don’t have any problem with their salaries capped at $500k, but don’t kid yourself. $500k in NYC is not a fat cat. Not by a long stretch.

  44. I don’t claim to know what constitutes appropriate compensation for the successful stewardship of a multi-billion dollar corporation.

    I can claim to know what constitutes appropriate compensation for the unsuccessful stewardship of multi-billion dollar corporations. $0.

    There are varying degrees of success, but failure is failure. And if they’re asking for a bailout, they’ve failed. $500,000 isn’t too little, it’s far too much.

  45. @#9 eustace

    “Kicking the rich is more fun when they’re on top, with egos in full bloom. Kicking them when they’re down isn’t nearly as much fun.”

    I beg to differ.

  46. Well, I know as sure as sugar that -I- am not giving up my armed chauffeur. No, Christopher!

    The Mrs. invented a new game the other night in which we rented a concert hall, filled it with vanilla ice cream, and set a pack of starving editorial assistants on it by telling them that the president of Random House is buried in the middle. Such hijincks! Such jollity! They licked the place clean with their little pink tongues.

    Don’t tell me that, soon, such japes will be no more!

    We ski in the Bahamas, summer in the lost city of Atlantis, and our dearly darled-up doffing daughter Buffy SIMPLY MUST have her monthly jaw implants – how can anyone expect us to survive in the city on (articulated gahsp) half an oyster? A shucked shell? A measly pawed-over pearl?

    No, we’re definitely keeping the armed chauffeur.


    People outside of New York City have no comprehension of how expensive it is to live here. Wages are also skewed relative to the cost of living.

    I was born and raised in NYC and find your claims to be utterly ridiculous. I make less than you and have no debt, have savings, have a decent sized apartment.

    $500k in New York is not living large.

    Even the few people I know who are ”living large” don’t come close to $500k.

    Where do you live? Because I’d love to be your landlord, consultant and anything else since it seems like you’re paying face value for things without haggling or looking for a lower cost in any way.

    Sorry for the snark, but your comment makes me think of one thing to make lemonades out of these lemons: People need to find ways to get these people who have too much money in their pockets to share them with us. Anyone need a lightbulb changed? I’ll do that for $20 per bulb, 5 bulb minimum.

  48. PS: Sorry for my typos. Up late. Just want to add you need to pay the lightbulb fee. The $20 covers labor per lightbulb.

  49. This is small potatoes, nano-potatoes, compared to Hollywood. Michael Eisner got a ~ $138,000,000 goodbye kiss after 14 months of running Disney into the ground. Keanu Reeves got ~ $97,000,000 per Matrix film (including salary and percentage.) At least the bankers can probably count to ten on the first try.

    Which is all fine because it’s done by private companies. If Disney’s shareholder think that Eisner’s performance was worth 138 millions, fine, their decision. But it’s not private money any more with those banks, it’s government’s and thus taxpayer’s money and they might have to learn to an income only 10 time the average family income or get another job.

    1. Which is all fine because it’s done by private companies

      Actually they’re publicly traded companies, which means that they’re inextricably tangled up with Wall Street and the banks. As I pointed out before, they also receive subsidies in the form of tax breaks. There is absolutely no such thing as a private company. For good or for ill, all businesses have complex relationships to government, i.e. taxpayer, funds.

  50. To be honest, I’m just surprised that with these people earning in excess of seven figures a year, they only spend about $1000 on a suit.

  51. I’m Poor (Western Standard), past, present & future. In fact, I am aiming for Real Poor (Emerging Economy Standard). I doubt I’ll make it to $1700, but close enough. I happen to enjoy having less money. If done right & it’s your choice to make, you can have a rather enjoyable life.
    However, this is not why I am trying to live for even less. No, I’m just trying to beat the rush. There’s only so much stuff in the world and we’re using way too much of it.
    If the Static State view of the planet is correct (and, of course it is), then we’re seeing the first tremors of an coming eco-quake caused by our belief in continuous growth. The solution is simple as it is seemingly heretic: Consume less, way less. Either voluntarily now or by nature defaulting in a decade or three.
    I would like to defend the rich though, because they’re needed and will also be needed if we adopt a steady state system for our governance. The reason most people make money is because they contribute more to society and as such they should get more of the resources (money). Besides, a million people getting flatscreens or fancy watches does more damage than one fool in a $10.000 dress.

    Why not try to make it nice to be a poor person? Poor people use less resources, that means more for you! One idea: Use less (some kind of yardstick would be needed) = get free access to all media/knowledge/entertainment. All of which is practically free to distribute anyway. If you gave me universal, guilt-free access to all digital media, I’d be willing to give up cow. Think of the co2 saved.

    It’s always better to face the onslaught with open eyes and a willingness to move. You certainly won’t survive blindfolded.

  52. executives justify their over inflated salaries by the money they generate for the company…
    if their company does not make any money then what is their justification???

    These people should be put out on the street with the rest of the trash… they drove their companies into the ground they need to lose their jobs!

    this is the biggest money grab of all time…

    RAPE!!!!! since no one else seems to be screaming it I will… HELP!!! RAPE!!!! WE’RE BEING RAPED!!!

  53. We need to see more unemployed bankers sleeping rough on the streets of NYC. Disgusting over-salaried pariahs! I think that sums it up!

  54. Aww, my heart bleeds. I say cap all pay – regardless of industry – at £100k per year. No-one in the world needs more than that and anyone who claims to do so is from another planet and really needs the grounding that something approaching a normal paycheck would grant them. Politicians pay would be the one exception to this rule – it should be capped at whatever the average wage is for a skilled worker in said politician’s country. That way they keep in touch with their constituents and we won’t have the problem of people entering politics out of greed any more. Needless to say multiple incomes would have to be heavily taxed and any dodgy dealings (backhanders, etc) should be extremely heavily penalised with automatic jail time but it shouldn’t take too much work.

    As for arguments that people won’t work without the incentive to earn mega-bucks? Bullshit. They’ll work to feed themselves and the top jobs will be taken up by the most motivated, the ones that do the work because of love and ability, not because of money.

  55. So New York really is like an episode of Gossip Girl?
    I’ve always wondered.

    Maybe these poor, rich people should consider to move. Seems like almost anywhere else on the planet with the possible exception of London or Tokyo you can really live like a king on that kind of money.

  56. Tom Wolfe had a character in Bonfire of the Vanities explain how it was impossible to live in Manhattan on a mere $2 million/year, and that was in the 80s.

    I still don’t know why so much of our financial industry has to be in NYC, given modern telecommunications. Why can’t they relocate to Lincoln, Nebraska, where their $500k salaries will let them live like kings? And then, when their presence makes it impossible to live on $500k in Lincoln (which will take a few years), they can relocate to Peoria….

    Marty Busse

  57. I live a full, interesting life and want for nothing. I estimate that if I invested that $500K in a account that barely matched inflation, it would feed, clothe and shelter me for about Twenty Years!

    Of course I might elect to blow it all on a group ticket on Spaceship Two ….

  58. On the sentiment that these Captains should ride public rtansit like the rest of us:

    Srsly, the public transit is over capacity as it is. I don’t want Bob the Banker to use his Social Darwinist muscle to push ahead of me in the press to get on the subway at rush hour.

    On the other hand, maybe if some of these Important People started complaining about the frightful service, the MTA would do something besides 86 another train line. Because we all know who pulls weight in NYC today.

    On the sentiment that most of the world would look at us mutants with our laptops and think the same of us,

  59. Pay for executives should have a reasonable cap, but stock options and incentives should align to create incentives for directors of publicly traded companies to act in the best interest of shareholders and maximize wealth. If they do so, they should be rewarded. I don’t think that there should be a problem with executives making large sums of money if they create continually and reasonable wealth for shareholders, the true owners of the company. Lambasting the rich is unnecessary, and some (no all, obviously) executives have extensive education and experience that should be paid top dollar for if they take on high levels of responsibility and deliver results. What they do with their money then is their business.

  60. Boo-hoo. Move to Jersey. Take the commuter train to work. Buy a home gym and get some willpower to use it instead of hiring a trainer. Send your kids to public shool and if one spouse is making $500k a year, the other can stay home and take care of the kids and you can fire the nanny. If you must get a vacation home, stop being a walking cliche and get one that’s not in the Hamptons. Spend $5,000 on your vacations instead of $16,000. And I bet you can get 4 dresses for 1 or 2 thousand and they would look really nice. Or get one $10,000 dress a year and wear it to all your secret Illuminati balls where you eat pate made of homeless people. There. Problem solved.

  61. What bothers me is not so much the complaint that $500,000 isn’t much for an executive lifestyle in Manhattan — I’m willing to buy that — but that these guys run BANKS and were apparently too stupid to adequately save or invest their own multi-million-dollar salaries against potential future loss of income, or to generate secondary investment income … no, apparently it all goes to consumption, they have no cushion to fall back on, and they’re entangled in high recurring expenses they now have to rapidly and catastrophically extricate themselves from to make up for sudden loss of income.

    Perhaps this inability to manage obscenely large salaries in such a way that one has savings left over for a rainy day suggests they should not be running A FINANCIAL INSTITUTION?

  62. I only wish the whole set of articles the NYTimes is running were satire. Otherwise I would have to think that they are shilling for the asshats who mostly caused the problem.
    As for how much it costs to live in NYC-I know some prime real estate right in midtown, just steps from Grand Central. The views are limited, but it’s really energy efficient! Just hop off the end of platform 24, and go right at the end of the station, then it’s down two flights…..And the rent is very affordable.
    When most of the population of NYC lives on 10% of what these people are complaining about I have no sympathy for them. If you want to give to charity, they can do more with 5,000 dollars cash than with your appearance in a 10,000 dollar dress. Heck, you could even volunteer to do some work for said charities!

  63. Instead of apathy for rich or defending them, I see this as a moment to just take a step back everybody. This is one of those rare times where life imitates art. The rich banker now has to move in with the maid/ chauffeur/ cook and be taught how to live on 500k a year. The bankers will have to learn there’s more to life then 15k dresses and Jason Stathem driving them to work. Instead of ranting and raving either way, I say we start a reality show and use the residuals to pay back the tax payers.

    Srsly, For the people that the ripple effect will hit they’ll find something else. NYC isn’t going to stop needing security, bouncers, cab drivers and America isn’t going to run out of fat people anytime soon. The recession hit some of us alot earlier though. I’ve been working in health care 2 years and still don’t have health insurance. So the clinic I work for doesn’t have to give me benefits I work oncall so my hours are not steady even though my department is under budget and I basicly work full time anyway… You suck it up, take what you can get and ride it out.

    1. BlindKarma,

      There is nothing more to life than being driven to work by Jason Statham. Take it back.

  64. @54 – Just consider an executive who is paying a massive mortgage that is eating up a good portion of his current salary. Suddenly he can’t pay it. He can try and offload it, but in the current market he might not be able to offload it for enough to pay back his debts. You almost certainly will have some of these people going bankrupt not because they chose not to change their life style, but because they simply can’t pay for commitments they have already made.

    So the rich executive now knows what it’s like to lose his possessions. And unlike the multitude in the real estate crash, they were at least part of the problem. Anyone else in any other business who screwed up so badly would not just get a salary cut, they’d be fired with no chance of a job in their industry anywhere. Remember everyone on this planet is affected by them. So why not cap their salary?

  65. A core problem is the inability to “down-shift” — not because one cannot simply bear to live without luxuries!, but because the market for those luxuries (particularly real-estate) is seemingly more illiquid than ever and it’s tough to unload them. That said, one can always unload them at a significant loss…

  66. Can’t live well on half a million a year in NYC? Excuse me while I roll around on the floor laughing.

  67. I think the true story is that 80% of CEOs didn’t support Obama. Now it’s his chance to stick it to them. The government should not dictate compensation to private corporations. I also feel that private corporations should not need the government to bail them out. So, six of one and a half dozen of another.

  68. No-one has mentioned why NYC is so expensive to live in — it’s *because* of the people with the immense salaries. If the salaries come down, you can bet the cost of living will too.

  69. Ok, someone check my numbers here.

    Searching a Manhattan apartment website like this one:

    Shows that there is a wide variety of apartment pricing in Manhattan, yes. There are plenty of places going for upwards of $10,000 a month. But those are swank. For argument’s sake, let’s put that down as an arbitrary fence post. Fine, you’re paying $120,000 a year because you need a bigger place with a doorman. Whatever. It’s stupid, but let’s look at the details. Say you make $500,000 annually.

    Using a simple withholding calculator:

    Gross pay: $500,000
    Net pay: $303,491

    Now, if you’re paying $120,000 for a place, you’re still taking home $183,491, or $7645.46 every two weeks. Even tacking on some exorbitant parking fees, you should be doing very well. If not, you just don’t know what you need and what you don’t. You don’t need a $2500/month car payment. You live in Manhattan. If you don’t like to take public transportation, that’s what cabs are for. You should really consider whether that dry cleaning bill can be trimmed with clothes you can wash. Perhaps you could run/cycle instead of being in the swank gym?

    Either way, the point is, even if you pay more in rent than most people do to own a place, you still take home something like 3x what most people in this country make a year. Expensive to live in NYC or no…you’re not going to get much sympathy outside of Manhattan. And even then, speak about it quietly in restaurants.

  70. I think the best argument for this is that it’s a chance to “change guard” at the big banks. This is the perfect opportunity for a VP or lower to jump on the low-paying CEO position and make him/herself a legend by brilliantly leading the company out of the governments debt. Isn’t this the kind of underdog-friendly situation that management genius-types wait for?

  71. Bankers make six figures for doing a five figure job.

    Their bosses make seven, for a six figure job.

    It’s about how much cream they can skim off the top of our milk bottle.

  72. @Flynn

    Its not about need or not need. Its about how much you can acquire to show your status off. These are the type of people who feel inadequate around 180ft yachts because their yacht is a measly 150ft. Never mind most people in this world will never set foot on a yacht in their lives. They do this in a similar fashion that lords in medieval Europe threw banquets, to show that they can which increased their status.

    People don’t need $10,000/month apartments, they want the attitude, lifestyle and status that comes with it.

  73. I have mixed feelings about this article.

    On the one hand, I have very little sympathy for the hedge fund managers, investment bankers, and corporate lawyers who have suddenly seen their 7-9 figure incomes drop to 6 figures. On the other hand, there is some truth to the story that Manhattan is expensive.

    First, it’s worth thinking about why these folks live in Manhattan. Most of the people discussed in this article work a lot. They regularly work 60 hours a week (during a light week), and probably regularly work 80 hours or more. They usually have to work on the weekends. (I know this. I was a management consultant, and had lots of friends who were consultants or bankers).

    Because of infrastructure issues, if you live in an outer borough of NY, or in a suburb in NY, CT, or NJ, it will probably take you at least an hour to get into the city (or out of the city) during peak commuting hours. That extra ten hours a week makes a big difference if you work 80 hours a week. (Remember that there are only 168 hours a week. Factor in 7 hours a night of sleep, and you’re down to 39 hours a week not working.)

    So, most of the folks in this article are forced to live in Manhattan, close to their offices. Manhattan isn’t that big, and demand for apartments in desirable neighborhoods is huge. So, prices are very high. It’s not unusual to see apartments sell for over $1000 a square foot, plus condo/coop fees and real estate taxes. (That’s actually a low guess.)

    Secondly, it’s true that stuff costs more in Manhattan. NYC has high income taxes (above and beyond NY state taxes). Restaurants and groceries cost more in NYC. If you want to keep a car in NYC, you’re probably going to have to pay about $500 a month to garage it (and still pay a fortune in insurance.) If you have young children and two working parents, you’re probably looking at another couple thousand a month for daycare or a nanny.

    However, you tend to get different stuff for your money in NY. When I lived there, I found that most people who had cars had BMWs, Audis, or Mercedes. The reason is pretty simple: if you can afford to spend $500 on parking every month, you can afford to spend the extra $200 a month for a luxury car.

    Many of those small apartments people mention are actually very nice. Yes, an apartment might stuff 3 bedrooms into 1200 square feet, but it’s likely to have a full time doorman, a huge gym in the basement, and a Wolf stove in the kitchen. People in NY don’t live badly; they just live in less space.

    I also think it’s worth noting that the prices in NY are a function of supply and demand. The reason that everything is so expensive in NY is because (1) there isn’t that much land in NY, and (2) there are a lot of people who want to live there. Because of the finance industry, those people have lots and lots of money.

  74. @#64
    But Hollywood isn’t asking for a bailout of epic proportions (or any bailout at all, for that matter).

    I’m not sure I understand your point. Yes, businesses that are publicly traded are tied into Wall Street, and yes, a variety of businesses receive tax breaks, which — while incentives for them to do business — impact the taxpayer.

    Films fail, and the government — to my knowledge — doesn’t bail out the filmmakers. Rather, their failure/success in the market is viewed as the failure/success of that film and the marketing & distribution that handled that product.

    Film companies fail, and life goes on. The people who failed go on to start new companies, and the cycle begins anew.

    Businesses do what they can to get as many breaks as they can, both in terms of taxes and in terms of just -how- much they can eke out of their staff for every dollar they pay. Governments provide benefits — be it tax breaks or loans — to give entrepreneurs incentives and to help ensure the business has a chance in the market (socialism is everywhere, to a degree). However, if those same businesses fail, they are generally unable to ask for a handout, even if they produce a tangible good for the marketplace.

    The issues here are that not only are the bankers making an obscene amount of money — even by wealthy first-world standards — but that they are also not producing anything of value in the process. Yet, they think that somehow… somehow… we should be willing to save their business -and- their lifestyle with an extra injection of our taxpayer monies. These are taxes that could have… that -should- have… gone elsewhere, as we have many more needs throughout our nation at this time. How will we meet our other pressing needs? Are we less solvent as a nation now, because of this bailout? Can we be convinced that this was truly for the best? The wailing and gnashing of teeth that can be heard from the upscale apartment homes of Manhattan does little to convince us mere proles that their plight is worth our pity.

    Maybe I misunderstand your point, though. Could you please explain, if that’s the case? Thanks.

  75. @#91 POSTED BY MVJOE

    I also think it’s worth noting that the prices in NY are a function of supply and demand. The reason that everything is so expensive in NY is because (1) there isn’t that much land in NY, and (2) there are a lot of people who want to live there. Because of the finance industry, those people have lots and lots of money.

    Look, supply and demand have little to do with “luxury” pricing.

    What I never understood about people complaining about NYC pricing is that this city is the most walkable and commutable one you have ever seen. I grew up in the deep end of Brooklyn and things were cheap because the neighborhood was poor. But we also rode the subway to go to specific neighborhoods to get specific things at lower prices.

    It’s not hard to do. You just have to choose to do it.

    So anyone feeding the argument of hardship in this thread really needs to stop. Anyone complaining that $500,000 is too little to live on who doesn’t make anywhere near $500,000 needs to stop. You shouldn’t be making excuses to help the negotiation of incompetents.

    @#87 POSTED BY RANDALLL , FEBRUARY 9, 2009 8:14 AM

    I think the best argument for this is that it’s a chance to “change guard” at the big banks. This is the perfect opportunity for a VP or lower to jump on the low-paying CEO position and make him/herself a legend by brilliantly leading the company out of the governments debt. Isn’t this the kind of underdog-friendly situation that management genius-types wait for?

    Exactly. This fact is what everyone is ignoring here. If there’s any way to pull this off, I’d recommend culling practically all of the upper management at these failed companies, allow underlings to rise and make sure they get the message that they are the “new guard” and will be held to a higher standard.

    Seriously, will anyone really cry at this point of an incompetent bank CEO now has to sell stuff from a folding table on the street?

  76. Just adding my personal anecdote to the mix:

    I live in Astoria, Queens. It’s a very safe and vibrant neighborhood, but is rather unfashionable (it’s mostly Hispanic, Greek, and Bengali, mostly second generation immigrants). From leaving my front door, it takes me ~15 minutes by subway to get to midtown Manhattan. I have a nice 1 bedroom apartment, can afford minor luxuries, and save fully *half* my paycheck after taxes. I make $75K a year.

    So yeah, cry me a fucking river. Don’t believe these ridiculous claims about cost of living in New York. Perhaps it takes more than 500K to live on the set of Gossip Girl. And perhaps you should move.

  77. I’ll admit I know next-to-nothing about executive compensation, or the horrors of living on a mere $500K for an entire year. But my first reaction upon hearing about the $500,000 salary cap was: “I wonder how they’re going to find a way around it”.

    IANM kinda touched on this ~#41. Anyone else know how they can weasel their way around that cap?

    Anyone know how many execs this will affect? And what the total difference between their pre-cap salaries and their post-cap salaries will be? What’s the total dollar amount that’s being taken out of all those execs’ pockets?

  78. My mom, at the age of 47, is a college student who also works almost every day of the month and in fact takes on extra cleaning jobs on the side. She supports herself, my brother and her husband who is legitimately disabled yet can’t get disability without any assistance from anyone. She does volunteer work for the school and her church despite her considerable health problems including a recent diagnosis of late stage breast cancer. She does all of this on a grand total of about 10k a year. My brother and step-father, who are truly good men, can’t find jobs because none exist where they live and they can’t move because they can’t afford to. None of them have health insurance so they’re all in dire need of medical care. They live off of junk food (white bread, peanut butter, top ramen) because it’s all they can afford, often have no heat or gas to get to work so my mom has to walk several miles in the snow and heat and often she doesn’t eat at all so there is food for the others.

    And I’m supposed to be all broken up because some fat cats who couldn’t give a crap about all the lives they’ve ruined can’t afford their precious summer homes? Don’t hold your breath.

  79. Wait, surely if they don’t like the wages they are being paid, they can just leave and get another job, just like those folks on ~$10/hr at WalMart etc. amirite?

    Of course, the main question is, why isn’t anyone who espouses this position on fire already? Whatsamatter, you got no matches in NYC?

    /goes off to sharpen pitchfork/

  80. @ #54 posted by Anonymous:

    I am actually ever so slightly sympathetic. If you suddenly hacked my salary in half (and some of these people are about to lose a LOT more than half), I would be in trouble…

    Do you honestly believe that you would still HAVE a job if you’d screwed up as badly as these guys? If so I’d like the kind of job security that you’ve got.

  81. The typical investment banker should try to work out a mansion-share arrangement, or would have a trust fund contributing to rent. It’s just commonsense. You minimize your expenses while doing whatever you have to do (such as not getting that third DVD player in your limo) so that you don’t have to work 15 hours a week at Morgan Stanley forever.

  82. Keep it up NY Times! Even if this wasn’t satyrical, a few more pieces like these, and these execs won’t have to worry about the austerity of a $500k salary. The underclass will hang them all from lampposts as an example to the other greedy, unscrupulous and incompetent CEO’s. We haven’t even begun to see class warfare in this country yet.

  83. The point being ignored by many is the simple fact that the New York Times has become an utter, utter joke. Their ‘plight of the victim banker’ sob stories have pushed me away from them, possibly forever.

  84. After actually reading the NYTimes piece (as opposed to just scanning it), I’m perceiving it not as satire, but very subtle tongue-in-cheek humor. It seems like NYTimes articles, even moreso than other newspapers, have a tendency to clinch the narrative in the final sentence, and following this one carefully through all the way to the end revealed its intent to me.

  85. J. Dimon is worth a mint, Pandit is not worth spit.
    When I was in training in NYC, I earned about 34K, with expenses of about 36K, but the 2 hour commute made it all worthwhile. (That’s 10 hours a week!).
    Eventually my salary creaped up, to 100K, then my expenses went up also, since I tried to reduce my commute to a reasonable 7 hours a week, I nearly lost money!
    Then my salary creaped up past 100K, I was finanlly making more then my expenses.
    For those who think otherwise, they’ve never experienced NYC, and the commute and quadruple taxation…(NY, NYC, NJ, Fed), and the real estate taxes alone eat up 1K/month for the home I was renting in the hispanic section of town (I agreed to pay real estate taxes in my rent to an old lady who went into a NJ nursing home…).
    The commute is NOT enjoyable, as someone else described it, but a waste of another part of my day where I’m trapped with others I dont know.
    Now my income is about 12K/year, and quite honestly, is more then making 100K commuting into the city.

  86. Go see *Inside Job* It’s infuriating and outrageous. It gives you a real sense of how cynically self-serving these people are at the world’s expense.

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