Tuesday, February 3, 2009


by Alexandra Lebenthal

• Area Rug, $87,784
• Mahogany Pedestal Table, $25,713
• 19th Century Credenza, $68,179
• Pendant Light Furniture, $19,751
• 4 Pairs of Curtains, $28,091
• Pair of Guest Chairs, $87,784
• George IV Chair, $18,468
• 6 Wall Sconces, $2,741
• Parchment Waste Can, $1,405
• Roman Shade Fabric, $10,967
• Roman Shades, $7,315
• Coffee Table, $5,852
• Commode on Legs, $35,115
• Decorator Services, $800,000

The $1.2 million spent on decorating the Merrill Lynch office of John Thain has gripped everyone as yet another symbol of Wall Street’s disconnect from the values of everyone else. His termination from new owner, Bank of America, was clearly tied more to multibillion dollar losses at Merrill in the 4th quarter, seemingly ill-timed bonuses to Merrill employees prior to the closing of the deal with the Bank as well as a hefty dose of corporate political maneuvering.

Shocking as it was, extravagant expenditures would not have brought a second glance in the media in prior years. I’ve been in more than one executive office suite of powerful men. I have taken the elevator only reserved for the “C Suite” and their guests. Each time I always felt a sense of being Willy Wonka in the great glass elevator, always baffled as to why mere mortals were not allowed such close promixity to the titans who ran the company. Is it that mere mortals aren’t good enough to be close, or is it that those titans are so supremely busy that even a few extra seconds to stop at other floors might delay the important business at hand?

I have been led down the welcome area to the private dining rooms where meals are served on fine, delicate china. There is a feeling that you are in the halls of money and power and brilliance. A potential for any wish you have to be granted, but really just a feeling that you are lucky to be there even if you leave empty handed.

Anything you want to eat or drink is readily available though there is always a printed special menu for the day. I’ve noted that the men (as if it weren’t obvious, there aren’t many women and even fewer now), usually order off the menu in a strange demonstration of “power” -- as if to show even the waiter that one always must be on his toes with the leaders of the company. “

"The creamed oatmeal Sir?"

"... No, I think I’ll have the steel cut today."

Ironically most of these offices are interchangeable, showing little differences save the sterling silver framed pictures of spouse, graduations and a prerequisite corporate fishing or golf trip with a few close colleagues; Chippendale is the furniture designer of choice, silk window treatments cover the curtains beyond which are views of the Manhattan skyline, and there are antique maps on the walls. They rarely show a sense of personality and style, and most likely were the concept of corporate decorators and the executive’s spouse.

John Thain has since argued that when the office was redone he thought the company would do much better and no one doubts that this was true. But when he arrived on November 2007, the company had already billions in losses making layoffs inevitable, if not already well underway.

When layoffs -- excuse me, Reductions In Force (RIF’s) -- happen, they are across the board in different departments and come with little warning though people usually sense a “today is the day.” Among those in the RIF, some may be directly responsible for generating actual revenue, and some are “merely overhead.” But these are the people that ride the regular elevators and who rarely, if ever, glimpse the executive floor. They are people with their own careers, families, hopes and dreams. The difference they make to the firm’s profitability usually exceeds the cost of a Louis XVI commode or an Aubusson rug.

Let us look at the $1.2 million in cost and describe a few fictional employees who might have been on the list whose compensation in total equals that amount.

John “Johnny G” Gianfarra, 47. Municipal Trading Desk, Assistant Vice President. Base Salary: $125,000. Target Bonus: $45,000. Benefits: 17%. TOTAL COMPENSATION: $198,900.
John has been at Merrill for his whole career. After graduating from Adelphi in 1984 where he captained the Lacrosse Team he got an interview at Merrill due to his Uncle Dom who worked there. He started on the Muni desk as operations “ops” clerk, making sure that trades went through properly especially “DK’s” from other firms. For the last seven years he has been on the desk as a Liaison helping Financial Advisors across the Merrill “system” find the bonds they need for specific clients. A few of the really big producers depend on him and always tell their branch manager that they couldn’t do as much business as they do without him.

Last year he was responsible for assisting in the generation of $40 million in sales credits. He is always on the 5:52 pm to Cold Spring Harbor, Long Island with a lot of Muni guys from other firms. Johnny G’s wife, Mary Anne, whom he met when she worked on the trading desk too, takes care of their three kids, John Jr., 7, Suzette, 14, and Rose, 16.
Eileen J “EJ” McGonagall, 39. Equity Trading Institutional Support Staff. Base Salary: $75,000. Target Bonus: $12,000. Benefits: 17%. TOTAL COMPENSATION: $101,790.

EJ brings in a dozen Krispy Kremes every Friday, never forgets anyone’s birthday, but above all makes sure the six institutional salespeople she supports have everything they need to handle some of the largest equity buyers in the world.

She is the first one to pick up the direct wire to the major institutional accounts, never leaves without all trade errors and commissions corrected.

With equity business down, the other sales assistant on the desk will now be covering all 12 salesmen. Her husband worked in Compliance at Bear Stearns and thankfully was able to get a position after the sale last March at JP Morgan.

Hopefully his salary will cover them while she looks for another job. After years of trying to have children two years ago they finally had twins using in vitro fertilization.

The cost wasn’t covered by insurance and they are still in debt from that and the larger house in New Dorp, Staten Island, but Ryan and Kevin are reminders every day of how good God has been to them.
Xi’an “X Man” Fong, 25. Security Reception, Global Headquarters. Base Salary: $27,500. Target Bonus: $0. BENEFITS: 17%. TOTAL COMPENSATION: $32,175.

Xi’an’s parents emigrated from China and he is the first member of his family to graduate from high school and work outside of Chinatown. His job at reception in the lobby of headquarters is to clear visitors.

“X Man” was a nickname given by his co-workers since they always messed up the pronunciation of his first name. He has developed the unique ability to take a photo with the sensor camera that actually makes people look decent.

“X marks the spot,” he says, and usually evokes a smile from those already made weary by the constant charade of security at all buildings in the City.

Grant Mullane, 64. Waiter, Private Dining Room. Base Salary: $47,000. Target Bonus: $0. BENEFITS: 17%. TOTAL COMPENSATION: $54,990.

Grant has been at Merrill for 42 years. He remembers what Mssrs Regan, Tully, Komansky, and O’Neill liked to eat for each meal. Always quietly efficient, coffee is poured quickly for early morning breakfast guests with the sugar and creamer nearby, water never dripped when glasses are refilled, and he always knows the daily menu perfectly by 6:30 am.

Each year he has put money away in the bank from his meager salary and is looking forward to retiring with his wife, Mary, to a small condominium he bought in Apalachicola on the Gulf Coast of Florida next year when he turns 65. It’s not glamorous but will be their dream home nonetheless and a celebration of all the years he put in at the Company.
Sheila Parham, 33. Marketing Department. Base Salary: $47,000. Target Bonus: $7,000. BENEFITS: 17%. TOTAL COMPENSATION: $63,180.

Sheila is down to earth and no nonsense. She tells people directly how it is.

If they complain, she tells them there are people in Harlem, where she grew up, who aren’t ever going to move beyond the projects and the streets. She is smart, efficient and has an incredible ability to make people like her and want to be with her. She works on the marketing brochures for the Wealth Management division and is known for never having missed finding a typo.

Charles “Chip” Somerset, 27. Global Investment Banking of the Americas. Base Salary: $150,000. Target Bonus: $460,000. BENEFITS: 17%. TOTAL COMPENSATION: $713,700.

It has been a tough year for Charles’ family. His older stepbrother, Blake Somerset, was a banker at Lehman. Though now working at Barclays, he lost most of his net worth. The two have spent a lot of time together recently as Blake’s marriage to his wife Grigsby is now on the rocks as a result of their economic misfortune.

Chip himself married a year ago at a grand wedding on Block Island, and has a baby due in two months. Chip assumed that his career was on a one direction upswing. Bonuses had gone up nicely each year and he had assumed by 2010 he would earn his first million dollar bonus.


They say there are a million stories in the naked city. There are hundreds of thousands of stories like these across the financial services business, as well as others across the country. An expensive office would ultimately not have been enough to save these people but it reminds us of the belief in another time and place when there were two classes of people on Wall Street: those who would continue living and working in the luxury to which they were accustomed; and those who were expendable. Now, how quickly the world has changed ...
Alexandra Lebenthal learned from her father, Jim Lebenthal, and grandmother before, about the basics of finances and investments. Today she is the CEO of Lebenthal & Co., LLC and its wealth management division Alexandra & James Co.