Wall Street Bonuses: The Other Side Of The Story
Until this week, New Yorker Andrew Schiff's personal finances were his own personal business. That changed last Wednesday when Schiff — communications and marketing director at the Wall Street brokerage firm Euro Pacific Capital — was featured in a Bloomberg article about how smaller bonuses are leaving Wall Street workers strapped for cash.
More than 1,500 people have commented on the story, and it's fair to say most of those comments aren't sympathetic. Schiff tells NPR's Robert Siegel that he regrets becoming the public face of the 1 percent's woes.
"I never intended to do it and I probably should have seen it coming," Schiff says. "I didn't want to be a poster child for greed."
That said, Schiff doesn't deny that he's done well for himself. He makes $350,000 a year, lives with his wife and two children in a 1,200-square-foot Brooklyn apartment, has one child in private school and rents a summer house in Connecticut.
"I certainly am aware that on a national average I'm doing very, very well," he says. "I just find it very expensive and more expensive than I would have thought. If you would have asked me five years ago, 'Hey, you're going to make this kind of money,' I would have said, 'Wow, everything I've ever wanted about living in New York would have been accessible to me.' And the reality is that it's not."
Setting The Record Straight
As a communications director, Schiff concedes that his involvement in the Bloomberg story was "not my finest moment." But there are a few things he'd like to say to set the record straight.
For one thing, Schiff says he was a bad example to use in the piece because his bonus usually amounts to about one-sixth of his salary, or around $60,000, a far cry from 80 percent many Wall Street workers receive. He says that after taxes, his bonus wouldn't even cover private school tuition for his two kids.
"I told [the reporter] about things like the traffic jam that I was stuck in and he used that as a metaphor of my entire life, the idea of being stuck," Schiff says of the article's opening, "even though I expressly told him that wasn't how I felt."
That said, he does see the drop in Wall Street bonuses as potentially problematic, though he's quick to clarify, "I use the word 'problem' in relative terms."
Schiff explains that if big bonus earners assume those bonuses are going to keep coming, they might buy into a lifestyle that becomes untenable once the bonuses stop.
"They have to make big changes," Schiff says. "That's emotional. It might seem like a high-class, frivolous problem to people with much lower means, but it's going to mean a lot to them."
For all the grief — and colorful emails — he's been getting, Schiff says the bright side to all the unwanted attention is that it has people talking. "It's possible to build some common ground," he says, "by just having a frank discussion."
ROBERT SIEGEL, HOST:
Until this week, Andrew Schiff, the director of communications and marketing at Euro Pacific Capital, made the occasional appearance on cable TV business shows. With his brother, Peter, he wrote a book, "How an Economy Grows and Why it Crashes." But his personal finances were, appropriately enough, his own personal business. That was then.
This is now. And now began on Wednesday, when a Bloomberg story hit the Web with the headline: Wall Street Bonus Withdrawal Means Trading Aspen for Coupons. Andrew Schiff was quoted in the story, among other people. He described living in New York City, making $350,000 a year and feeling squeezed. Well, more than 1,500 people have commented on that story at the Bloomberg site.
And, Andrew Schiff, I think it's fair to say - wouldn't you agree - that most of them are not sympathetic to you.
ANDREW SCHIFF: No, they're not. And many of those people have sent me personal emails of similar color.
SIEGEL: I gather you regret becoming a public face of the one percent blues.
SCHIFF: Yes, I never intended to do it and I probably should have seen it coming, but I didn't want to be a poster child for greed and venality.
SIEGEL: On the other hand, you know, you're making the kind of income that places you at the very highest-rung nationwide. For Wall Street, you're, you know, you're kind of grunt at that amount of money.
SCHIFF: Yeah, for Wall Street, I'm certainly a small fish, not a big fish. I certainly am aware that, you know, on a national average I'm doing very, very well. And I told the reporter, I certainly never complained to the reporter about my salary. I know that I make a lot of money. And what I was really talking to him about was the costs of life in a place like New York, where those high salaries are possible.
SIEGEL: Well, for somebody out there who's pondering an offer to come to New York to work for mid-threes, tell us about it. You and your wife and two children live in a 1,200-foot apartment in Brooklyn. One child goes to a private school and...
SCHIFF: She just started there.
SIEGEL: ...according to the article, you rent a summer house in Connecticut. You don't own a second property. And you find it's tough.
SCHIFF: I wouldn't say I find it tough. It is quite enjoyable and our lifestyle is certainly adequate. I just find it very expensive. And if you would've asked me five years ago, hey, you're going to make this kind of money, I would have said, wow. That's everything I've ever wanted about living New York would have been accessible to me.
The reality is it's not. The cost of living here is certainly hasn't budged. It's going, going up and up. The taxes, especially when you get to a high level, are murderous. And I just wanted to make - to the reporter, I was just saying, you know, the kind cartoon lifestyle that you would assume for the rich in New York City, the Wall Street fat cat, you know, how much that really costs.
SIEGEL: Well, there you were in the Bloomberg article quoted, along with somebody else who estimates the cost of dog care in his household to be about $17,000 a year. And so, you know, you're in there. You're one of these people, grouped together as the...
SCHIFF: Yeah, it's amazing. It's people have actually construed me with these other people and have assumed that I'm the guy with the dogs, when I don't even have a dog - although I'd like a dog. They've said all kinds of things to me about how I could live more frugally.
And these things - and to a certain extent, the only good news here is that I think it's OK to have a discussion, a frank discussion, about lifestyles and about money.
SIEGEL: Beyond your situation, is this a problem on Wall Street now, that people who did depend on big bonuses once a year - one big check, much bigger often or usually than their salaries - is it a problem that people are experiencing?
SCHIFF: I mean I use the word problem in relative terms. But I think it might be a problem for them. I mean, these people were getting paid 80 percent of their salary in bonuses. If that is severely limited, that's going to take a big - make a big change in how those people will live.
SIEGEL: Well, Mr. Schiff, thank you very much for talking with us about it today.
SCHIFF: You're welcome.
SIEGEL: That's Andrew Schiff, director of communications and marketing at Euro Pacific Capital in New York. He was one of the people quoted in a Bloomberg story: Wall Street Bonus Withdrawal Means Trading Aspen for Coupons. Transcript provided by NPR, Copyright National Public Radio.