7:39 p.m. | Updated
Wall Street may be shrinking — cutting thousands of jobs over the last year — but for those who remain, the pay is still very lucrative.
The average cash bonus for those employed in the financial industry in New York last year rose roughly 9 percent, to $121,900, Thomas P. DiNapoli, New York State’s comptroller, said on Tuesday.
Cash bonuses in total are forecast to increase by roughly 8 percent, to $20 billion this year.
The total, however, is down from 2010, when it was $22.8 billion. Wall Street’s peak came in 2006, before the financial crisis, with a total $34.3 billion in bonuses. The year-end bonus can account for the bulk of a finance professional’s annual compensation.
The report from the state comptroller’s office gives estimates on the bonuses, based on tax withholding data, data from banks and conversations with industry experts. It came the same day that JPMorgan Chase, one of the country’s biggest banks, announced it was eliminating 17,000 jobs over the next two years through layoffs and attrition, adding its name to a string of large banks that continue to cut jobs to reduce expenses.
Wall Street has regained 30 percent of the 28,300 jobs lost during the financial crisis, Mr. DiNapoli said. And firms are continuing to streamline as they cope with a sluggish economic recovery, difficult markets and a heavier regulatory burden. While financial industry employment in New York City was steady in the first half of 2012, it was down slightly in the second half of the year, the comptroller’s office said.
“Wall Street is still in transition, but it is very slowly adjusting to changes in its economic and regulatory environment,” he said.
In an effort to hold down — albeit temporarily — compensation costs, a number of financial firms have deferred cash payments to employees in recent years. Mr. DiNapoli said on Tuesday that part of the increase in 2012 was cash promised in recent years but actually paid out last year. He said that it was difficult to break out what percentage of the total was deferrals, but he believed that it was still a small part of the total.
The ebbs and flows of Wall Street pay have a major impact on the economy of New York City, where 169,700 are employed in finance. Local businesses like restaurants, luxury goods retailers and the upper end of the real estate market pin their fortunes to the flood of cash from year-end bonuses.
Before the start of the financial crisis, business and personal income tax collections from finance-related activities accounted for up to 20 percent of New York State tax revenue. In 2012, that contribution fell to 14 percent.
Yet finance remains the best paying sector in New York City, Mr. DiNapoli told reporters during a conference call.
All told, the average pay package for securities industry employees in New York was $362,900 in 2011, the last year for which data is available, almost unchanged from 2010.
“Profits and bonuses rebounded in 2012, but the industry is still restructuring,” Mr. DiNapoli said. Despite its smaller size, the securities industry is still a very important part of the New York City and New York State economies.”
DealBook: Wall Street Pay Rises, for Those Who Still Have a Job
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DealBook: Wall Street Pay Rises, for Those Who Still Have a Job
