New York City’s Famous Smith & Wollensky wants to make a deal with Wall Streeters forced to take their bonuses in illiquid form. The restaurant has taken out a full-page ad in The New York Times to announce that its midtown Manhattan location is now accepting all New York Stock Exchange and Nasdaq stock certificates as payment for its USDA prime dry-aged steaks.
Smith & Wollensky says the deal is an attempt to minimize the economic damage that may be caused by firms paying their employees’ bonuses in stocks this year instead of cold-hard cash.
“The effects on the local economy could be catastrophic, leaving large tracts of land in the Hamptons and Martha’s Vineyard undeveloped; legions of real estate brokers, personal shoppers and pet psychiatrists unemployed; and massive amounts of steak and lobster uneaten,” the ad proclaims.
The owner of the stock must be present and must turn over the stock certificate to St. James LLC, Smith & Wollensky’s parent company, which will then add it to its portfolio. Stock values at dinner will be based on that day’s closing price; at lunch, they’ll be based on the previous day’s closing price. The restaurant will keep copies of the Wall Street Journal handy to verify prices.
CNBC worked up an analysis of what a diner could buy with stock from Goldman Sachs and Citigroup, respectively. The network found that two shares of Goldman stock will get you four filet mignons, one hashbrown, one creamed spinach side, two bottles of wine, and a $50 tip for your waiter. Two shares of Citigroup stock, by comparison, will get you just the creamed spinach. If you’re OK with only having a half-order.
“The best part of it is the $50 tip that my waiters will get,” Smith & Wollensky founder Alan Stillman told CNBC. “Because the other way, they won’t get anything.”
The steak-for-stock offer is backed up by solid economic data. New York officials announced Wednesday that the state deficit would be $750 million larger than predicted two weeks ago when Gov. David Paterson laid out his budget proposal.
The reason for the unexpected gap: Usually the state can expect to collect $1B USD to $1.5B USD in tax revenue from end-of-year bonuses. But The New York Times reports that this year, thanks to the switch to stock payouts, those taxes came up $1B USD short.