Install

Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Wall St. Pays Financiers $13Bln Bonus




NEW YORK -- Even by the inflated standards of high finance, Wall Street is overflowing with holiday cheer this year. Investment banks have set aside $13 billion to pay bonuses, 20 percent more than last year, with pay packages above $10 million no longer a rarity.


Yet among Wall Streeters whose incomes once astounded Middle America, the mood has changed. One industry veteran bemoaned the "opportunity cost" of remaining a financier in the Internet Age. Others are leaving to join online start-ups, technology companies and venture capital firms, the pillars of the new economy, where they sometimes take home more than their old bosses from Day 1 - and, they say, have more fun.


For the first time since Wall Street became the surest professional path to riches during the frenzied 1980s, those with the biggest paydays are former investment bankers.


Like Timothy Weller. He is the talk of the Street, but mostly because he no longer works there. Last summer, Weller, 34, left Donaldson, Lufkin & Jenrette, where he was a middle-ranking analyst tracking the telecommunications business, to join Akamai Technologies, which provides networking services for the Internet.


Akamai, based in Cambridge, Massachusetts, enticed him to sign on as chief financial officer by selling him 1.05 million shares, valued then at $2.63 million, and even lent him the money to buy them. Gratification was quick: When Akamai went public in October, its stock soared from $26 to $230. Weller's stake is now worth $240 million.


Few bankers will reap such gains, but many are still taking their chances on the Internet. One-time masters of the universe say banking has become prosaic, with the heavy demands no longer producing unrivaled rewards. Bankers now ogle online entrepreneurs the way lawyers and accountants once envied Wall Streeters.


"It used to be that investment bankers were at the cutting edge," said Mark Long, who as a banker for CS First Boston helped some of America's hottest Internet companies go public. "Today, bankers are just hired guns."


During a trip last summer to promote the Internet start-up Intraware to potential investors, Long, 32, accepted his client's offer to become a vice president, joining shortly before it went public.


With profits for financial firms and bonuses for bankers at all-time highs, there is certainly no looming crisis on Wall Street. Even those who leave banking often do so with trepidation, fearing that inflated Internet stocks could come crashing down.


The Internet is more a blow to the psyche. The pressure to earn Internet windfalls shows up in little ways, as with the rising stock analyst who says he has lost repeated bidding wars for Upper East Side apartments and adds, only half in jest, that $10 million does not buy much of a condo these days.


The online lure is also enhanced by ex-bankers who have changed careers seamlessly. Jeff Bezos worked on Wall Street until he founded Amazon.com, and that trend keeps gathering steam. Bezos, now many times a billionaire, hired a number of other former bankers and made them Internet retailers.


Robert Lessin, chief executive of Wit Capital, an online investment bank, and formerly a top officer at Salomon Smith Barney, has poached a long list of bankers from Salomon, Merrill Lynch and other firms.


"It's like I'm a banker but I get to wear casual clothes," said Kate Cornish, 28, who left Salomon for Wit a few months ago.


Especially susceptible are those who are three to five years out of business school - on the cusp of devoting a career to a firm, but young enough to start fresh.


"They say, 'I want to be a multimillionaire by the time I'm 30, but if I stay at Morgan Stanley, it may take me until I'm 50,'" said Joseph Perella, Morgan's head of investment banking.


In reaction, Morgan Stanley has started offering stock to some newly hired bankers.


Not long ago, Wall Street did not have to try so hard. Investment banking, offering top dollar, consistently ranked as the No. 1 or No. 2 career choice for top business graduates.


Popular culture followed the money. "Wall Street," the movie, and "Bonfire of the Vanities," the novel, created a stereotype of bankers and traders whose only obstacle was their own greed. In the early 1990s, investment banks were seen as the engines of globalization, financing road projects in China and privatizing phone companies in Brazil.


But the Internet, like an electronic black hole, has stolen all the gravity. Securities firms seem to have less to do with creating Internet companies than they did with arranging restructurings or sending capital abroad. And through the Silicon Valley looking-glass, Wall Street egos can appear almost humble.


New York Times staff Laura M. Holson and Patrick McGeehan also contributed to this article.