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Industry Spotlight > Broker Dealers

Wall Street Bonuses Highest Since 2008

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The average bonus paid to securities industry employees in New York City grew 15% to $164,530 in 2013, according to the Office of the New York State Comptroller.

Including both cash and deferred compensation, this is the largest average bonus paid out since the 2008 financial crisis and the third-highest on record. (The average bonus in ’06 was $191,360; in ’07, it was $177,830.)

“Wall Street navigated through some rough patches last year and had a profitable year in 2013. Securities industry employees took home significantly higher bonuses on average,” said New York State Comptroller Thomas P. DiNapoli, in a statement Wednesday. “Although profits were lower than the prior year, the industry still had a good year in 2013 despite costly legal settlements and higher interest rates. Wall Street continues to demonstrate resilience as it evolves in a changing regulatory environment.”

In 2013, broker-dealers reported combined profits of $16.7 billion, 30% less than in 2012 ($23.9 billion) but still strong by historical standards. Some factors affecting profits include requirements for larger reserves, limits on proprietary trading and other changes intended to reduce unnecessary risk and to enhance transparency.

“In response to compensation reforms, firms now pay a smaller share of bonuses in the current year and a larger share is deferred to future years,” the comptroller’s office explained.

Due to these trends, the number of industry jobs in New York has not returned to its pre-crisis level: Some 165,200 employees worked in the securities industry last year, nearly 13% fewer than before the financial crisis.

Other industry trends highlighted by the controller include:

  • Over the past two years, the bonus pool for securities industry staff has grown 44%, driven by compensation deferred from prior years;
  • The average industry salary (with bonuses) was $360,700 in 2012, more than five times greater than the rest of the private sector ($69,200);
  • The securities industry accounted for 22% of all private-sector wages paid in New York despite the fact that it represents only 5% of its private-sector jobs;
  • New York City collected $3.8 billion in taxes in fiscal 2013 from activities directly attributed to the securities industry, nearly 27% more than in the prior year; the level was still about 11% less than before the crisis, but the securities industry accounted for 8.5 percent of the city’s tax revenues last year
  • The state of New York collected $10.3 billion in taxes attributed to the securities industry during the latest fiscal year, or about 16% of all state tax revenue, versus 20% at the prerecession peak.