NEW YORK New York steakhouse chain Smith & Wollensky has come to the rescue of Wall Street bankers trying to cope with the shock of receiving their multimillion-dollar bonuses in shares rather than cash.
The steakhouse chain took out a full-page ad in The New York Times on Wednesday offering to trade steaks for diners' stock certificates, touting the plan as a way to inject the bonuses into New York City's economy.
Despite Smith & Wollensky's generosity, the restaurant is not making it easy for diners to exchange a stake for a steak. The fine print says prospective steak-eaters must present original stock certificates, which few people have in their possession anymore.
It said that asset management company St. James LLC will decide what the shares are worth based on current share prices.
"We haven't the slightest clue if people will show up with stock certificates, but we are ready if they do," Smith & Wollensky founder Alan Stillman told Reuters, adding that the reduction in cash bonuses hit business hard last year.
In the tongue-in-cheek ad, the chain expressed concerns about the trickle-down effects of bankers receiving shares rather than cash. Among those purportedly affected are personal shoppers and pet psychiatrists. The ad also noted that "massive amounts of steak and lobster" could remain uneaten.
Under pressure from the U.S. government, major U.S. banks paid many of their top executives' bonuses in stock rather than cash. The idea is to have bankers' remuneration more closely tied to long-term performance rather than short-term trading profits.
Bonuses can account for the lion's share of a banker's overall pay, often reaching several times base salary, and recently hitting levels that drew the ire of the U.S. public.
Smith & Wollensky has a number of restaurants in various U.S. cities but the promotion applies only to its New York restaurant on Third Avenue.
That restaurant draws patrons such as billionaire investor Warren Buffett. He will be hosting a lunch there on February 20 for which a Canadian wealth management firm agreed to pay $1.7 million to charity in an auction last year.
Smith & Wollensky said it will accept certificates for any New York Stock Exchange- and Nasdaq-listed stock, including those of Goldman Sachs and Morgan Stanley, two banks whose top executives are receiving stock rather than cash bonuses this year.
Smith & Wollensky even offered to redeem stock in General Motors Co, though following the carmaker's bankruptcy last year that can only refer to the old shell, Motors Liquidation Co, whose stock currently trades at 62 cents.
(Reporting by Phil Wahba, editing by Matthew Lewis)