Banks are showing signs of profligacy when it comes to perks - like flying associates by private jet to client meetings.
"When we're working on specific transactions we'll fly first class," says a senior associate in structured finance at one US bank in Canary Wharf. "Either that, or we'll fly private jet; it's included in the fees."
Transporting associates by private jet is a far cry from 2003, when non-essential travel was outlawed as banks sought to curtail costs and Goldman Sachs reportedly stamped on the practice of doling out free fruit. Last month The Guardian reported that Goldman had invested in a private jet company (not solely for the benefit of its employees) and in the current climate of abundance, even Jamie Dimon, the notoriously parsimonious chief exec of JPMorgan, is rumoured to have reopened the gyms he closed a few years ago.
Who gets the best deal when it comes to non-monetary extras? Private equity execs aren't doing too badly. Figures released when Blackstone went public suggest the private equity firm spent 424k just on expenses for chairman and chief exec Stephen Schwarzman last year (according to the website BankersBall).
Not everyone's perking it up, however. Goldman may be dishing out on private jets, but The Wall Street Journal recently reported that the firm no longer provides offices for its senior retirees and requires bankers to stump up as much as US$5k for its annual ski retreat in Utah. The paper added that Lehman now forbids MDs to fly first class unless on overnight trips - and MDs at Credit Suisse in London are obliged to pay parking fees.
A senior banker at one European bank in the City says perks aren't an issue: "We don't make the kinds of profits we make because we're spending money on pointless things. Who cares if there are a few senior people taking private jets and drinking 500 bottles of wine - the main costs for an investment bank are IT and people, not free apples."