Paying 100k / Month In Rent As A CEO
Hi I’m wondering if CEOs can typically afford to rent a 100k a month apartment in NYC? (for private equity/hedge Fund/BB CEOs)
A fellow CEO of a mega fund I met in the Hamptons recently stated to me that he pays 100k per month on rent. I'm at another megafund and I heard this level usually gets around 450k base and 500 million in carry per year. CEO also stated he is single, no other income.
I am trying to do the math to see how this would be affordable, but I am not sure.
something like this
https://streeteasy.com/building/988-5-avenue-new_…
Thoughts?
I bet that $100k was referring to his Hamptons house rental. That's a pretty common monthly rate for a top-end house out there in the summer.
Most CEOs are going to be buying their main home, not renting. Not that $100k is a lot of money to them, but better to put that into equity. Plus most will want to customize parts of their home and have it professionally designed, you're not going to do that with a rental. Apartments like the one you linked are heavily owned by international buyers, you can look up where the CEOs live but most are in very nice but not totally outlandish apartments like that one.
You can see MF CEO comp in the public companies, but $500M per year is not a likely figure. Schwarzman gets ~$200M total (plus a shit ton more in dividends for owning 20% of BX stock of course) and he obviously gets a big allocation as the founder. The two KKR CEOs got ~$30M of carry payments a few years back. New Carlyle CEO has $1M base (usually in that range for all of them) + $180M over 5 years in stock comp. Obviously some carry in there too, but not to the level you're describing.
after tax its like 100% of his base...
Well, let's do some quick math here, shall we? If you're making around $450K base and $500 million in carry per year, that's a hefty sum. Now, if you're paying $100K per month in rent, that's $1.2 million a year.
Even if we just consider your base salary, that's more than twice your annual income, which is quite a stretch. However, if we factor in your carry, it becomes a different story. $500 million is a lot of bananas, and $1.2 million would be a small fraction of that.
So, in theory, yes, it could be affordable. But remember, just because you can afford something doesn't mean it's a wise financial decision. You'd also need to consider other expenses and financial goals.
As for the apartment, it's a beauty! But again, whether it's worth the price tag is a personal decision. It's all relative, as they say in the jungle.
Sources: How much money to "feel rich" in nyc?, When do you actually get ahead living in NYC?
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