http://www.bloomberg.com/apps/news?p...d=ao_bM8x5PoUw
Goldman Sachs Architect Has No Pie in the Sky Payday
by James S. Russell
Nov. 3 (Bloomberg)
A few days ago, I stood before the $2.5 billion 43-story skyscraper that the masters of the universe at Goldman Sachs Group Inc. will soon call home.
The West Lobby, with its colorful, monumental mural, exudes a forbidding calm amid a frenzy of building activity.
Outside, I watched men install stone curbs at the East Lobby’s limousine drop-off. As I contemplated this edifice at 200 West Street, a block from Ground Zero, some numbers came to mind:
-- The $1.65 billion in tax-exempt bonds that helped build the tower and saved the firm $100 million.
-- The $115 million of tax breaks Goldman wrung from city and state officials desperate to show progress at the World Trade Center site.
-- The $16.7 billion Goldman has set aside for compensation this year.
The firm and its competitors say big paydays are essential to retain their best people. I’d argue that that is a totally fraudulent mantra insulting millions who are far less grandly paid yet glad to make a difference.
Case in point: the architects of Goldman’s new tower, a group of firms led by Pei Cobb Freed & Partners. Co-founded by I.M. Pei, the practice is in the top tier of corporate-design firms. It wouldn’t discuss compensation or the Goldman Sachs project, yet its eight principals probably make a nice living.
And their pay packages would be laughed off Wall Street.
Seven Figures
Goldman’s allocation for 2009 compensation and benefits is enough to pay every single worker close to $600,000. On average, you have to be president of a large architecture firm to earn more than $300,000, according to the latest salary survey of the American Institute of Architects.
“It is the rare principal or significant owner of an architecture firm that even approaches the seven-figure incomes of investment-bank executives,” said Ian Rusk, president of ZwiegWhite, a consulting firm that surveys architects’ pay.
Architecture jobs are certainly as demanding as those of many bankers. Pull away the suspended ceiling of a tech-heavy office building like Goldman’s and you’ll find a maze of ductwork, electrical conduits and pipes for water, sewer and fire sprinklers. Below the nice carpeting and behind the paneled walls, miles of fiber-optic cables snake from traders’ desks to racks of routers.
Some computer draughtsman earning $45,000 a year has to make sure that the ducts can fit under the steel beams and that every light switch and sprinkler head is laid out where it belongs. Miss a few things and the change orders (contractor demands for more money) start rolling in.
Shedding Glass
Though the Pei firm is esteemed for its creative risk- taking and devotion to technical innovation, it has confronted failure.
In 1973, huge sheets of glass on the John Hancock skyscraper the firm designed in Boston began separating from the building and shattering on the ground. The problem took years and millions of dollars to fix. A less-tenacious firm would have gone out of business.
Pei and his partners methodically repaired the building and the firm’s reputation, losing none of their taste for daring as they completed the East Wing of the National Gallery, in Washington, and the glass-pyramid entrance to the Louvre.
Falling Metal Studs
On rare occasions, the risks aren’t just monetary. Robert Woo, an architect with Adamson Associates, one of the firms working on the Goldman project, was severely injured when a crane at the tower site dropped seven tons of metal studs onto the trailer in which he was sitting. His Toronto-based firm would not give details of his current condition except to say it hadn’t significantly improved and he hadn’t returned to work.
So many architects hang out shingles that fees get driven down, making their pay crummier than that of almost all other highly educated professions. Why do they do it? Because they love it. (Pei, 92, has had a hard time retiring. A museum he designed in Qatar opened last year.)
Architects can’t wait to reinvent the stairway. They are thrilled when a client loves her new kitchen. Goldman entrusted its faith and its billions to Pei principal Henry N. Cobb, 83. One of the firm’s co-founders in 1960, Cobb will complete his first New York skyscraper when Goldman is done.
For the designer of the glass-shedding Hancock tower, now much admired, it must feel good.
Other creative industries and the so-called helping professions -- nurses, teachers, social workers -- attract smart and motivated talent to low-pay careers.
Many Wall Streeters think anti-bonus rage is class warfare or hating the rich. It has to do with the trust we put in highly paid speculators who expect stratospheric rewards no matter how their bets pan out. No architect would blithely ask to be rewarded for building a house that fell down.
For information:
http://www.pcfandp.com/a.html
(James S. Russell is Bloomberg’s U.S. architecture critic. The opinions expressed are his own.)
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