Wall Street bonuses slide

The New York State Comptroller's office estimates that 201l cash bonuses on Wall Street will fall 14 percent compared with the previous year. / CBS/iStockphoto

Securities industry workers who work on Wall Street can expect their financial bonuses for 2011 to shrink by 14 percent from the previous year, according to a new report by New York state comptroller Thomas DiNapoli.

"Cash bonuses were down in 2011, reflecting a difficult year on Wall Street," he said on Wednesday in a statement. "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."

The decline in bonuses reflects Wall Street firms' sharply reduced earnings last year. Total profits for these companies fell 51 percent, the second consecutive year that earnings fell by more than half. DiNapoli estimated that securities firms made a combined $13.5 billion in 2011, down from $27.6 billion in 2010.

Although Goldman Sachs (GS), Morgan Stanley (MS), and other large New York banks have taken steps to limit cash bonuses, personal income tax receipts in New York suggest that overall awards for bankers, traders, and other industry professionals may have declined less than the 2011 estimates indicate. That is is likely because firms also paid out bonuses that had been deferred from previous years, according to the report.

Other findings from the comptroller's office, which every year estimates bonuses paid to securities industry workers in New York City (see bottom for a chart showing changes in Wall Street bonuses since 1985):

-- The securities industry in New York City has resumed downsizing. Between April 2011 and December 2011, the industry shed 4,300 jobs. During the financial crisis, the industry had lost 28,000 jobs, of which only 9,600 jobs had been recovered before losses resumed in April 2011.

-- The average cash bonus declined by 13 percent to $121,150 in 2011. The average bonus declined slightly less than the total cash bonus pool because the pool was shared among fewer workers than in 2010.

-- 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).

-- The member firms of the New York Stock Exchange devoted nearly 52 percent of their net revenue to compensation (e.g., salary and bonuses for their broker/dealer operations) during the first three quarters of 2011, compared with 47 percent in all of 2010 and 36 percent in 2009.

-- In 2010, the securities industry in New York City accounted for 23.5 percent of all wages paid in the private sector despite accounting for only 5.3 percent of all private sector jobs.

The New York State Comptroller's office estimates that 201l cash bonuses on Wall Street will fall 14 percent compared with the previous year.

/ New York State Comptroller

[A_Canadian_Opinion]

About frig'n time!!

[Chesley31]

Isn't it amazing that Americans cheer when someone wealthy in their eyes makes less money and these folks somehow are evil if they make more money. This administration has done more damage to the economic fiber of this county in 3 years than in the country's prior existence while demonizing bankers from Wall Street down to Main Street. It is the Main Street bankers that sit on all of the local philanthropic organization boards and make up a good 50% of the volunteers who do 80% of the work in communities. The same brush that has tarred Wall Street also applies to us on Main Street and in your rush to hate the wealthly, just remember that without them many things do not get done. It is just odd that we somehow can celebrate the downturn of the economy in this manner. If they do not do well on Wall Street, the odds are that Main Street won't either.

[democracy8]

Wow, you are TOTALLY clueless!

[rightbehind]

Bonuses?? They should be sending leg irons.