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How Wall Street Bankers Abuse Their Free Seamless Takeout Dinner Privileges

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NO FREE LUNCH (YES TO DINNER THOUGH)
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Investment bankers, as we all know, often work crazy hours, going into the office as early as 7am and staying past midnight sometimes.
 
These Wall Street inhabitants are well compensated for their work, however. Besides their handsome salaries, bankers working late or on weekends typically get their meals comped by their employers.
 
These day, junior bankers usually are granted a $25 meal allowance for use on Seamless.com -- Morgan Stanley’s (MS) limit used to be $30 in the halcyon pre-crisis days. But as Fast Company reports, some cunning employees have found ingenious ways to game the system and order more than $25 worth of food.

If employees want to order dinner, for example, they have to stay until 8 p.m. "But you could still order for a 7 p.m. delivery at 6 p.m., then call the restaurant directly and tell them to bring it right away," one [Morgan Stanley] employee says. "So I'd finish work around 6:30 p.m., hit the company gym, and then grab my sushi -- spicy tuna rolls -- on the way out."

Reps from Goldman Sachs (GS) and Morgan Stanley did not respond to Fast Company’s request for comments, but it seems like the magazine managed to get more than one Morgan Stanley employee to reveal Seamless order tricks. A female worker shared that she would log into her office computer remotely from home to place an order, and then simply call the restaurant to switch the delivery address to her home. Another said that in his first year at the firm, he racked up over $3,000 in Seamless food orders.
 
While corporate workers can enjoy dinner on their employers if they work late, they cannot use their allotted money to buy groceries and alcohol, not that that has stopped some of them. How do they go around the no-alcohol mandate? A bunch of employees will pool their $25 together to place a large order, and then, you guessed it, call the shop to change the order to beer instead.
 
"We definitely get a lot of random orders," Seamless CEO Jonathan Zabusky told Fast Company. "Once in a while, I'll sit on the customer-care desk, just to get a feel on the pulse of what's going on. You see these orders come through, and you're like, 'Why are 20 rolls of toilet paper going to 200 Vesey Street [the World Financial Center]? What the hell?'"
 
Let’s see: Tenants of the World Financial Center include Merrill Lynch (BAC), State Street (STT), Royal Bank of Canada (RY), and Nomura. Accountants at these establishments, we’re guessing, are busy peering through orders for the last few months trying to crack down on the habit.
 
How can bankers get away with their cheapskate actions? Well, generally, all overtime dinner expenses are charged to investment banks’ clients. What happens is that whenever an investment bank starts work on a deal with a client (say, underwriting an IPO), the deal gets assigned internal deal code. All expenses then get allocated to these deals, which means that the costs get passed through to the clients.
 
You would assume that clients would be very judicious when poring through billings from banks, and you would probably be right. However, clients don’t actually get the charges for extravagant orders. You see, banks always have many open deal codes because they have pitches that took place that never materialized and nobody bothered to close the deal code. In that case, bankers use those stray deal codes for their "value-added" meals, and thus can escape client scrutiny.
 
In the grand scheme of things, an extra $25 here or a beer or two there does not mean much to investment banks and other big corporations. However, it is also very tacky of anyone earning more than $70,000 a year (the average banking starting salary these days) to abuse corporate dining privileges. In a climate of low profits for banks thanks to Dodd-Frank regulatory changes, firms are looking for any reason possibly to lay people off, and that extra beer or lobster salad is definitely not worth getting fired over.


See also: Hedge Fund Execs Giving Soft Bucks to Romney

 

POSITION:  No positions in stocks mentioned.

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