The rudderless public outrage over executive compensation in the financial industry has clearly gone too far. It's one thing to set limits on cash bonuses for top bankers who live and breathe the heady empyrean of financial risk-but it's another thing altogether to challenge the one core security they know in this vale of tears. We speak, of course, of their right to dissolve their marriages and conquer fresh free markets of the heart. As Bloomberg correspondent Alexis Leondis notes, "divorce settlements for executives such as bankers who rely on bonus payouts are becoming harder to negotiate as some firms give employees less cash and more long-term incentive awards including restricted stock and deferred money."
Leondis declined to indicate just who those clients were, no doubt solicitous for their pride when news of their plight became public and they're promptly flooded with charitable contributions to preserve their East Hampton summer spreads and keep their wounded, uncomprehending children from joining the Exeter scholarship rolls.
Clearly one of the chief advantages of a standing pool of ready cash is its efficacy in buying off a disgruntled spouse. Eleanor Alter, a New York divorce attorney, explained that as a result of the industry-wide drift into stock and deferred compensation, many of her clients are forced to sell off second homes and-horrors!-take their kids out of private schools in order to meet the expenses involved in split-household child-rearing.
Is nothing sacred? After all, the shrinking bonus system not only reduced overall cash on hand -it distorts the basis for computing the level of future child support and alimony payouts. That's because, as Alter says, the conventional big-ticket divorce settlement is based on a couple's earnings over the past four years-but now the executive compensation set-up is so deeply in flux that "no one knows where it's going to go." Glenn Liebman, a Long Island-based CPA, almost audibly shudders at the prospect ahead: "Changes to compensation are creating a horror show when dealing with the other spouse's budget and support package for the children."
And it's not like the stock market-the new de facto basis for most Wall Street settlements-is exactly the most stable predictor of earning power, either. So are the new diminished payouts causing more Wall Street players to keep their big swinging dicks zipped, and endure the quiet desperation of keeping up their loveless marriage franchises? Are we witnessing the senseless sacrifice of a generation of would-be Don Drapers?
Perish the thought. After all, additional compensation schemes that get worked out post-divorce aren't necessarily covered in existing settlements-so for the ambitious, adultery-seeking executive on the go, this is actually a propitious season to go a union-sundering, Leondis reports. "This may be an advantageous time for financial executives to get divorced because there's less money in cash compensation to go toward alimony or spousal support, according to Robert Stephan Cohen, a New York attorney." Just do the math on the other end of the negotiating table: "Non-working spouses will get a smaller share of money through restricted or deferred compensation than they would have if their spouses were rewarded with cash payouts."
So if you ditch a non-working spouse in artificially straitened time, you can pile up additional compensation sweeteners as you continue storming the citadels of finance-especially since financial firms still offer sizable cash bonuses for switching employers. And what are such machinations, after all, but the laws of elective affinity applied to the seductions and wooings involved in teasing your maximum reward from the fickle mistress known as the market? Indeed, if Wall Street were really on its game, it would heed the real lesson of the failed Lehman Brothers cult of executive fidelity, and tie additional performance deals to the negotiation of a partner-pinching divorce. After all, it's all about the art of the deal-and in today's oversight-infested Wall Street, no less than in your basic consciousness-raising seminar, the personal has become political.
Let the poor slobs in the lower orders contend with the far less forgiving math of splitting up on five-figure incomes. Let the sentimental guardians of the national safety net manage a child poverty rate that was nearing 20% even before the onset of the recession.
After all, another Bloomberg dispatch makes it plain that, compensation woes aside, another key indicator shows that Wall Street has stirred fully back to its accustomed way of life: Esmé E. Perez notes that, after a sluggish 2009, helicopter commutes from New Jersey to Wall Street are back in full swing-at a daily rate of $200 per passenger. Liberty Helicopters, which handles the Jersey trade, will resume regular weekday services in April after maintaining a skeleton schedule for most of the past year. Liberty marketing vice president Patrick Day says that the service took calls from 150 prospective clients when it launched a new ad campaign last month. This, too, should only help to further embolden members of Wall Street's wandering-spouse class: helicopters, after all, not only permit you to survey one's actual living conditions from a safe aerial remove-they are also form the backbone of any battle-tested system of emergency evacuation.
Chris Lehmann commutes to work on dog-back.