Wall Street bonuses rise 20% to $257,500 on average
Wall Street profits soared in 2021, driving up bonuses, state comptroller Thomas P Credit: Jeff Bachner. DiNapoli said.
Bonuses earned last year by Wall Street employees increased 20% to a record $257,500 on average as stock markets soared with more companies going public, according to a report released Wednesday by state Comptroller Thomas P. DiNapoli.
He said the estimated $45 billion in bonuses were paid between December and this month for work performed in 2021. That compared with $37.1 billion in 2020, which also was a record amount and occurred during the coronavirus-induced recession.
Only 25¢ for 5 months
Bonuses earned last year by Wall Street employees increased 20% to a record $257,500 on average as stock markets soared with more companies going public, according to a report released Wednesday by state Comptroller Thomas P. DiNapoli.
He said the estimated $45 billion in bonuses were paid between December and this month for work performed in 2021. That compared with $37.1 billion in 2020, which also was a record amount and occurred during the coronavirus-induced recession.
Securities industry bonuses typically boost the Long Island economy because they go toward the purchase of second homes on the East End, high-end automobiles, boats and other luxury items.
About 20% of Long Islanders are employed by New York City-based firms, many of them on Wall Street, according to research by the Long Island Association business group and the Center for an Urban Future in Manhattan.
DiNapoli, a Democrat from Great Neck Plaza, credited the 2021 increase in bonus payments to more initial public stock offerings by businesses, higher fee income for stock brokerages from the buying and selling of shares, and low interest rates.
“Wall Street’s soaring profits continued to beat expectations in 2021 and drove record bonuses,” he said on Wednesday.
However, DiNapoli and others said the trend of ever-rising Wall Street bonuses may not continue. They've climbed 80% in the past decade.
“Recent events are likely to drive near-term profitability and bonuses lower,” DiNapoli said. “Markets are turbulent as other [economic] sectors’ recovery remains sluggish and uneven, and Russia wages an inexcusable war on Ukraine’s freedom.”
He noted important sectors of the state and Long Island economies – retail, tourism, construction and arts and cultural institutions – have yet to fully recover from the pandemic.
Taxes on the securities industry, including employee salaries and bonuses plus business taxes, produce 18% of state government revenue.
News of the increased bonus payments comes as Gov. Kathy Hochul and the State Legislature negotiate a new state budget before the April 1 deadline. The state is flush with COVID-19 relief funds from the federal government but the State Senate and Assembly indicated in their budget priorities that they want to spend more than the governor has proposed.
The bonus data is only for securities industry employees assigned to work in New York City and doesn't include stock options and other deferred compensation for which taxes haven't been paid. Not all workers receive a bonus.
The industry employed 180,000 in the city last year, unchanged from 2020, when 3,600 jobs were cut, year over year. The average salary, including bonuses, was $438,370, up nearly 8% from 2020.
In addition, stock brokerages' pre-tax profit totaled $50.9 billion in 2020, up 81% from 2019. DiNapoli estimated last year's pre-tax profit, which hasn't yet been released, is "likely to at least reach" $61.4 billion.
Sarah Anderson, global economy director at the liberal think-tank Institute for Policy Studies in Washington, said additional federal regulation of "runaway Wall Street pay" is needed to address the disparity with other occupations.
"While ordinary workers are struggling with rising costs for basic essentials, Wall Street bankers have seen their bonuses soar further into the stratosphere," she said.
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