The average bonus paid to securities industry employees in New York City grew 15 percent to $164,530 in 2013, the largest average bonus since the financial crisis in 2008, state Comptroller Thomas DiNapoli announced today. The totals include cash bonuses for the current year, supplemented by compensation that was deferred from previous years.
Wall Street posted record losses during the financial crisis, but the securities industry has been profitable for five consecutive years, the comptroller said. The bonus pool has grown 44 percent in the past two years. Profits for the broker/dealer operations of the New York Stock Exchange member firms — the traditional measure of profitability for the industry — were $16.7 billion in 2013, which is 30 percent less than 2012 but still strong by historical standards, he said.
The state, which depends heavily on Wall Street revenues, collected $10.3 billion in taxes from the securities industry during the 2012-13 state fiscal year. Last year, the industry accounted for 16 percent of all state tax revenue, compared to the pre-recession peak of 20 percent, he said.
“Wall Street navigated through some rough patches last year and had a profitable year in 2013. Securities industry employees took home significantly higher bonuses on average,” DiNapoli said in a statement. “Although profits were lower than the prior year, the industry still had a good year in 2013 despite costly legal settlements and higher interest rates. Wall Street continues to demonstrate resilience as it evolves in a changing regulatory environment.”
Data are not available yet for 2013, but the average salary including bonuses for securities industry employees in New York City was $360,700 in 2012, 5.2 times greater than the rest of the private sector, which was $69,200 in 2012.
While the securities industry has been very profitable in recent years, the number of Wall Street jobs has not returned to pre-recession levels, according to the comptroller. There were 65,200 workers in New York City in December 2013, 12.6 percent fewer than before the financial crisis.
DiNapoli said the securities industry has undergone major changes since the 2008 financial crisis. Regulatory reforms require larger reserves, limit proprietary trading and have required other changes to reduce unnecessary risk and improve transparency. As a result of changes in compensation regulations, firms pay a smaller share of bonuses in the current year and defer a larger share to future years, he said.
The comptroller’s annual estimate of cash bonuses includes those paid to securities industry employees in New York City. It doesn’t include bonuses for employees outside New York City. It doesn’t include stock options or other forms of deferred compensation for which taxes haven’t been withheld.