Wall Street paid 8 percent less in bonuses to New York securities industry employees last year compared with 2009, in the first full year after the US recession officially ended, New York State Comptroller Thomas DiNapoli said.
The lower number — an estimated US$20.8 billion in bonuses — reflects an industry shift toward deferred compensation and higher base salaries, DiNapoli said on Wednesday.
“Cash bonuses are down, but that’s not an indication of weakness on Wall Street,” he said.
The estimate of bonuses is down 8 percent from the US$22.5 billion paid in 2009, but it is US$500 million more than DiNapoli’s bonus estimate a year ago. Bonuses extended into March and April last year, beyond the traditional season.
“We’re not expecting it to creep up as much as the previous year,” the comptroller’s spokesman, Eric Sumberg, said.
The estimate was about a third less than the 2007 bonuses before the financial crisis. In 2008, Wall Street firms gave out US$17.4 billion in bonuses, even though that year was one of its worst.
The comptroller’s report said Wall Street profits of broker-dealer operations of New York Stock Exchange member firms totaled US$27.6 billion last year, second only to US$61.4 billion in 2009 when the industry benefited from massive federal bailouts and low interest rates.
“This is not going to save us from budget shortfalls, but it’s not going to make a bad situation worse,” DiNapoli said.
The state government is facing a projected US$10 billion budget deficit in the coming fiscal year, while tax collections from Wall Street have declined from about 20 percent of the state’s total revenues to about 13 percent.
Wages paid to workers in the securities industry in New York in the first half of last year were 21.9 percent higher than in the previous year, reflecting lagged cash bonuses, higher base salaries and deferred compensation that was paid.
Bonuses paid by New York City-based securities firms to employees located elsewhere were not included in the estimate.
While the industry lost 30,700 jobs during the recession, a decline of 16 percent, or 3.5 times the rate of total job loss in the city, it added 3,600 jobs between August and December last year.