Bankers See Bonuses Rising While State Predicts Wall Street Pay Continues to Fall

Patrick Clark — Tue, 09 Oct 2012 19:00:46 -0400

Chalk it up to irrational optimism, perhaps: On the same day that the website eFinancialCareers.com reported that nearly half of Wall Street executives surveys are expecting higher bonuses for 2012 than they received last year, New York State Comptroller Thomas DiNapoli said that compensation was likely to decline.

Here's an excerpt from the state's report:

In February 2012, the Comptroller estimated that the cash bonus pool for securities industry employees who work in New York City declined by 13.5 percent to $19.7 billion. Revenue and compensation trends have edged downward since that report and based on those trends the total cash bonus pool for work performed in 2012 is likely to decline for the second year in a row.

That doesn't exactly square with the findings of eFinancialCareers, which reported that 48 percent of respondents see bonuses rising for 2012. What's more:

The mood is lifting with more respondents believing that bonuses will increase and less believing they will decrease. Of those who believe bonuses will increase in the next three years, over half (53%) are convinced bonuses will return to 2006-2007 levels. Fifty-eight percent of respondents say they expect bonuses to increase or remain the same over the next three years, up from 54 percent a year ago.

Of course, there's a third option: Amid lower revenues and job cuts, Wall Street firms will marshal compensation pools to reward profit-generating bankers, leaving less pay for those whose units perform less well.

A Dire Forecast

The Editors — Wed, 08 Aug 2012 12:31:00 -0400

This page has been warning of an impending fiscal calamity if the state’s local governments continue to resist needed fiscal reforms. The plight of local governments in California—where pension costs are forcing some local governments to reduce basic services, including police protection—serves as an example of what could easily happen here.

Now state Comptroller Thomas DiNapoli has weighed in with a frightening but absolutely necessary warning about the condition of local governments in New York. Mr. DiNapoli used a tired but perhaps necessary cliché as he described the impending disaster as a perfect storm of escalating costs especially those related to health and pension benefits and declining tax revenue.

The report was filled with bad news. Three hundred local governments ran a deficit in one or both of the last two fiscal years, and about 100 local governments have very little cash on hand—not enough, the report said, to pay for three-quarters of their liabilities.

And things are actually even worse than the books suggest. Mr. DiNapoli said that local governments routinely employ fiscal trickery to hide the extent of their distress.

Governor Cuomo needs to tell the state’s mayors and county executives that reforms at the statewide level will be undermined if local governments continue to cook the books.

Observer » Comptroller Thomas DiNapoli

Bankers See Bonuses Rising While State Predicts Wall Street Pay Continues to Fall

A Dire Forecast