Howard Lutnick Shakes Up Newmark Leadership

Howard Lutnick raised eyebrows last week when he named his 28- and 27-year old sons to key leadership positions at Newmark and Cantor Fitzgerald.

It’s fair to question what kind of expert guidance a pair of 20-somethings can offer seasoned CRE veterans who have been in the business since before the Lutnick sons were even born.

But by also elevating Barry Gosin and Nemark’s top legal officer, Lutnick moved to continue the status quo as much as he could — even if the company would benefit from a more significant shakeup.

“No one’s under any delusion that somehow he’s not there anymore,” said Piper Sandler analyst Alex Goldfarb.

“Howard was a very polarizing figure. There were people who loved him and there were people who felt differently,” Goldfarb added, pointing to the controversial $50 million bonus Lutnick received from Newmark. “That rubbed people the wrong way.”

Not much will change, it seems. Newmark’s stock price pretty much shrugged off the news last week that Brandon Lutnick, 27, had been appointed chairman of Cantor Fitzgerald and Kyle Lutnick, 28, named executive vice chairman of the company as their father was confirmed as Donald Trump’s Commerce secretary. Kyle was also named to Newmark’s board of directors.

Their inexperience and the nepotism at play left many with the impression that they’d have less of a hand in the companies than their father.

“They’re kids,” one person familiar with the Lutnicks said. “There’s no more or no less than what you see.”

There will be some significant differences at Newmark, though. Lutnick was the ultimate authority at the company and was the person people would go to when they had disagreements with Gosin, sources said. He also personally approved retention bonuses and negotiated contracts with top brokers. It’s unclear how that power structure will shift in his absence.

Gosin was elevated to chair of Newmark’s operating company, and Stephen Merkel, Newmark’s chief legal officer and a longtime Lutnick loyalist, was appointed chair of Newmark’s board.

Lutnick’s associated companies (Cantor, BGC, Newmark) issued seven press releases to explain the shakeups at the various boards and companies. It could have been an opportunity to simplify Newmark’s ownership structure, which has weighed on the company’s stock price.

The stock is trading at essentially the same price it did when the company went public in late 2017. Lutnick’s grip on the company (he enjoys 10-1 super voting shares) plays a big part in that.

“There’s a reason why this company always trades discounts to peers,” Goldfarb said. “There’s an added level of complexity.”

A spokesperson for Cantor and Newmark declined to comment.

Meet Cantor Fitzgerald’s executive vice chairman, also known as DJ Kxtz

Howard Lutnick Shakes Up Newmark Leadership — Kyle Lutnick (Getty)

The most colorful item out of last week’s news was that Kyle Lutnick had moonlighted as a hip-hop artist.

“Until I run the game, I’ve got everything to gain,” went one of his lyrics.

Some were quick to point out that Wall Street’s most famous DJ, Goldman Sachs’ David Solomon, reached the pinnacle of his career despite his unconventional hobby. And others also noted that Howard Lutnick took over Cantor at the age of 29.

One person at Cantor opined that there’s no reason that — with time — the Lutnick sons could gain experience and achieve the renown their father has earned.

Still, those familiar with the Lutnick sons described them as typical 20-somethings still navigating their early way through life and business.

They’ll have to work to gain respectability: One thread on Wall Street Oasis last week was titled “Clown Show at Cantor?”

Some commenters criticized the move, but others saw the rationale.

“You can afford to have your children running the firm when you are the grey eminence making all the decisions anyway and have the ear of the very president who has the most willingness by his own nature to reward you for your loyalty to him,” one commenter wrote.