Bonuses paid to New York City financial employees are expected to decline by 14 percent to $19.7 billion during this year’s bonus season, according to an estimate released today by State Comptroller Tom DiNapoli.
“Cash bonuses were down in 2011, reflecting a difficult year on Wall Street,” DiNapoli said. “Profits were down sharply and securities firms in New York City resumed downsizing in the second half of the year. The securities industry, which is a critical component of the economies of New York City and New York State, faces continued challenges as it works through the fallout from the financial crisis and adjusts to regulatory reforms.”
Mr. DiNapoli also estimated that the profits for broker/dealer operations of New York Stock Exchange member firms would be half of what they were in 2010, the second year in a row that profits dropped by more than half.
Wall Street bonuses have become a hot-button issue ever since the collapse of financial markets in 2007, a symbol for many of the finance industry’s excesses; there are however a vital revenue lifeline for cash-strapped New York City and state.
Mr. DiNapoli also noted that securities industry in New York City shed over 4,000 jobs in the last eight months of 2011. His report also noted that while the average cash bonus declined by 13 percent to $121,150 in 2011, the average salary (including cash bonuses) in the securities industry in New York City grew by 16 percent to $361,180 in 2010,which was 5.5 times higher than the average salary in the rest of the private sector ($66,110). Data is not yet available for 2011.