Wall Street bonuses are forecast to increase by 8 percent, to $20 billion, during the bonus season this year, state Comptroller Thomas DiNapoli predicted in an estimate he released this morning. The average bonus was almost $121,900, an estimated 9 percent higher than in 2011. The bonus was shared among fewer workers than in 2011, he said.
Profits for the broker/dealer operations of member firms of the New York Stock Exchange — traditionally how profitability is measured for the securities industry — was $23.9 billion in 2012. That’s three times the total bonuses of $7.7 billion in 2011 and one of the most profitable years on record, according to DiNapoli. Large bank holding companies, however, were not as profitable as they were in 2011, he said.
“Wall Street is still in transition, but it is slowly adjusting to changes in its economic and regulatory environment,” DiNapoli said in announcing the estimate. “Profits and bonuses rebounded in 2012, but the industry is still restructuring. Despite its smaller size, the securities industry is still a very important part of the New York City and New York State economies.”
The securities industry in New York City had strong job gains in 2010 and 2011, but employment was unchanged for the most part during the first half of 2012 and a little lower in the second half of the year as the industry resumed its downsizing, DiNapoli said. There were 169,700 jobs in the industry as of December 2012, a drop of 1,000 positions from a year earlier. The industry has regained just 30 percent — 8,500 — of the 28,300 jobs lost during the economic downturn, he said.
New York has more security jobs than any other state in the nation, and 90 percent of them are in New York City, DiNapoli told reporters this morning. In 2011, 5.3 percent the jobs in New York City were on Wall Street, but the wages were 23.2 percent of all salaries paid to private workers in the city. The average salary, including bonuses was $362,900 in 2011.
“When the street is doing well, we all benefit in terms of impact on the economy,” he said.
Business and personal income taxes from Wall Street comprised 20 percent of New York State tax revenues before the financial crisis began, the comptroller said. Last year, they accounted for 14 percent.
Personal income-tax withholding collections from all New York City taxpayers were 15 percent higher in December 2012 than in December 2011. That is in part due to high-income taxpayers shifting compensation, including bonuses, to 2012 to avoid the threat of higher federal income-tax rates this year, DiNapoli said. An estimated $2.5 billion in income wsa shifted into 2012, he said.
DiNapoli released a chart of the New York City securities industry bonus pool in recent years: