Wall Street bonuses were expected to plummet 14 percent to $19.7 billion in 2011, Comptroller Thomas DiNapoli said today.
DiNapoli estimated that New York City’s securities industry faces ongoing trouble as firms downsized and limited bonuses in the fallout from the national recession that officially ended in 2009.
The average cash bonus per worker declined by 13 percent — to an average $121,150 in 2011, the comptroller said. It was $138,940 in 2010.
“Cash bonuses were down in 2011, reflecting a difficult year on Wall Street,” DiNapoli said in a statement. “Profits were down sharply and securities firms in New York City resumed downsizing in the second half of the year.”
The success of Wall Street is critical to the state’s finances, and the industry’s decline in recent years has been a reason for the state’s fiscal woes. Income from Wall Street once represented 20 percent of the state’s revenue; now it’s down to about 14 percent, DiNapoli said.
The average salary, including cash bonuses, in the securities industry in New York City grew by 16 percent to $361,180 in 2010. That was 5.5 times higher than the average salary in the rest of the private sector, which was $66,110. Data was not available for 2011, DiNapoli said.
The decline in bonuses was accurately forecasted in the state’s budgeting, DiNapoli said. In fact, the state predicted more of a drop, he said, meaning the state could see higher-than-expected revenue for the current fiscal year, which ends March 31.
Profits from firms that are members of the New York Stock Exchange were expected to fall below $13.5 billion in 2011 — less than half of the $27.6 billion earned in 2010. It would be the second year in a row that profits dropped by more than a half, DiNapoli said.
Profits stalled in the second half of 2011 after a strong first half, according to the comptroller’s review. After profits of $12.6 billion in the first half of 2011, the industry lost $3 billion in the third quarter alone.
The industry earned a record $61.4 billion in 2009 because of the federal bailout — after losing $53.9 billion in 2007 and 2008.
The securities industry in New York City shed 4,300 jobs between April 2011 and December 2011. During the financial crisis, the industry lost 28,000 jobs, and 9,600 jobs had been recovered before cuts resumed last April, DiNapoli said.