No more lavish weekends for investment bankers

USA Today

NEW YORK — In a sign of the times, Wall Street investment bankers are being warned to cut spending on trophies, all-expense-paid victory weekends in the Caribbean and other time-honored perks used to celebrate the closing of big deals.

Amid a near collapse in mergers and new stock and bond sales, investment banks are being forced to slash jobs and crack down on expenses.

The latest purge of spending is outlined in an internal memo from Credit Suisse First Boston.

"Given current market conditions," write Tony James and Chuck Ward, CSFB co-heads of global investment banking, "try to keep dinners below $10,000, particularly when no travel is involved."

The pair also forbid more elaborate celebrations with clients to commemorate completed transactions.

"No closing weekends," the memo states, which can include anything from grouse shooting in Scotland, scuba diving in Aruba or gambling in Atlantic City.

All outings must now be approved by CSFB's corporate events team — a big power promotion for a group that books flights and hotels but generally stops short on weighing in on the merits of lavish outings.

Most puzzling, however, is the order to "keep the costs of Lucites below $2,500." Lucites, trophies that mark big deals, generally cost about $50 apiece — not exactly a big-ticket item in the rarefied world of investment banking.

"It is an unusual target for cost cuts," says Edward Strauss, president of Manhattan-based Lucite maker Arrow Advertising. "It is such a small expense and is usually expensed back to the client anyway."