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The average Wall Street bonus increased 20 per cent last year as a flurry of initial public offerings and higher underwriting fees boosted profitability across the industry.
The typical bonus paid to employees in New York’s securities industry climbed to an all-time high of US$257,500, according to an analysis by New York State Comptroller Thomas DiNapoli. Recent market turbulence driven by Russia’s invasion of Ukraine is likely to prevent such payouts from reaching another record this year, he said.
“We have a long way to go before we get to the end of 2022, but given that this is really a record number for the bonuses as we’ve tracked this historically, I don’t think there’s any reason to assume that we’re going to break this record next year at this point,” DiNapoli said in an interview Wednesday on Bloomberg Television.
The industry’s bonus pool swelled to US$45 billion last year, up 21 per cent from 2020. The comptroller’s estimate is based on trends in personal income-tax withholdings and includes cash bonuses for the current year as well as bonuses deferred from prior years that have been cashed in. It does not take into account stock options or other types of deferred compensation.
Wall Street continued to cut jobs last year, with total employment dropping to 180,000 jobs in 2021. New York’s share of the securities industry also slipped to 18 per cent -- down from 33 per cent three decades ago -- as banks continue to move positions to other parts of the country and permitted more employees to work from home.
In New York City, the securities industry provides about one-fifth of private-sector wages despite accounting for just 5 per cent of that sector’s employment. Still, one in nine jobs are directly or indirectly tied to the industry, according to DiNapoli.
“We like Wall Street being successful from a New York perspective because we get the tax revenue that comes from that,” DiNapoli said in the interview. “We get the benefit of those at the higher end spending their money. Certainly we know the New York City economy’s recovery is lagging the state’s recovery, and the state is lagging the national recovery. Folks doing well, we want them to spend their money, we want them to get the small businesses going, get Broadway going.”