Such wealth may not sit well with his critics, especially as Cantor’s compensation practices have attracted attention over the years. Former employees have sued the firm over partnership payments they said they were owed. When Lutnick’s BGC Partners Inc., a Cantor affiliate, launched a hostile takeover of interdealer broker GFI Group Inc. in 2015, opponents of the transaction circulated “Howie Dollars.” The fake bills feature Lutnick’s face and the warnings “Will not pay to the bearer for any reason” and “This will vest when I say it will vest.”
Jain, too, brings his own baggage. He helped build Deutsche Bank into Europe’s biggest securities firm over two decades but stepped down in June 2015 as a trading slump, stiffer regulation and years of government probes stifled profitability.
Expanding Empire
Cantor is a more opaque realm. It includes stakes in publicly traded BGC and Newmark Group Inc., a commercial real estate firm, and has a venture capital unit.
Lutnick sees his empire expanding further into real estate and he wants to compete with Wells Fargo & Co. -- the fourth-biggest U.S. bank by assets -- in financing multifamily homes. Other businesses continue to push into some of the most hard-to-understand parts of Wall Street, like structured credit, insurance and convertible bonds.
“It’s a collection of activities that is definitely unique,” said Nathan Flanders, global head of non-bank financial institutions at Fitch Ratings.
Now Jain and Lutnick are doling out pay packages sometimes north of $10 million to lure talent from rivals, including two dozen bankers from Jefferies Financial Group Inc. to start a power and renewable-energy franchise. Pascal Bandelier came from Barclays Plc to head the equities business, while Credit Suisse Group AG’s Jim Buccola joined to lead bond trading, bringing three ace traders with him.
Tearful Interview
For Cantor to become a home for star traders on Wall Street seemed unfathomable in 2001. After its offices on the 101st to 105th floors of One World Trade Center were destroyed during the attacks, Lutnick became a public face of the tragedy after giving a tearful television interview.
But almost immediately, he found himself a magnet for criticism after cutting off paychecks for missing employees. To Lutnick, it was the only way to save the firm. To some of the bereaved families and a baying press, it was callous. Amid the uproar, Lutnick didn’t change course.
His doggedness was vindicated -- the resurrected firm ended up donating 25 percent of its profits to the families of the employees who died for five years and paid their healthcare for 10. “Howard was right smack in the center, everything came crushing on him,” recalls Michael Kaminer, a college roommate. “But he couldn’t let that company fail. He felt a very strong sense of obligation to those families.”
Mac & Cheese
Lutnick is a Cantor lifer. He joined after graduating from Haverford College in 1983 and was named president and CEO in 1991. He traces his rise back to a 1986 deal when he persuaded Bernie Cantor to buy into Burlington Resources before it was spun off from Burlington Northern railroad. The firm and Bernie Cantor reaped $150 million from the investment.