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Wall St. Salaries on Record-Setting Pace

(CBS / iStock Photo)
Happy days are here again for Wall St. workers.

Twenty-three major U.S. banks and investment firms are on a pace to dole out $140 billion in compensation this year, exceeding the pre-crisis levels of 2007, according to a Wall Street Journal report ($).

Many banks have quickly returned to strong revenue levels a year after the entire financial system was threatened – a crisis that sparked public outrage over the banks' risky practices and exorbitant compensation levels and prompted a multi-billion-dollar government rescue.

But now, with the stock market recovering and the credit crunch easing, banks and investment houses are pumping money back into human capital.

The $140 billion estimate, which amounts to a $143,400 average salary, is 20 percent higher than last year's $117 billion. It also beats out 2007's record level of $130 billion.

Among the companies included in the Journal's survey are banks JPMorgan Chase, Bank of America and Citigroup and investment firms Goldman Sachs and Morgan Stanley.

The Journal analyzed the firms' quarterly compensation disclosures and calculated them as a percentage of quarterly earnings. They then extrapolated compensation estimates based on annual revenue projections, which are expected to reach $437 billion this year.

Executive compensation is still a hot topic in Washington, D.C. Earlier this year, the Obama administration installed Kenneth Feinberg as a "pay czar" to monitor salaries and bonuses at some of the biggest recipients of federal aid. He's still negotiating with AIG – perhaps the company most connected to the financial crisis - over nearly $200 million in bonus money the company says it's contractually obligated to pay.

AIG bonuses caused an uproar on Capitol Hill in the spring and continues to garner attention. Neil Barofsky, the special inspector general overseeing the $700 billion government bailout, told lawmakers Wednesday that Treasury officials before handing out $180 billion to keep it afloat.

Scrutiny from lawmakers and the public may still factor into Wall Street's compensation decisions, but some see it as necessary to remain competitive in a global economy.

"The easiest way to destroy the firm would be if we didn't pay our people," Goldman spokesman Lucas van Praag told the Journal. "Destroying a profitable enterprise would not be in anybody's interest."

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