Wall Street Bonuses Rose 10% in 2020, N.Y. Comptroller Says
(Bloomberg) -- The average Wall Street bonus climbed 10% last year as the coronavirus pandemic fueled market volatility and a surge in underwriting.
The typical bonus paid to employees in New York’s securities industry climbed to $184,000, according to calculations by New York State Comptroller Thomas DiNapoli. That was in line with the state’s projections, meaning the city will likely meet or exceed its income-tax revenue projections in its fiscal 2021 year.
“Wall Street’s near-record year shattered all expectations,” DiNapoli said in a statement Friday. “The early forecast of a disastrous year for financial markets was sharply reversed by a boom in underwriting activity, historically low interest rates and surges in trading spurred by volatile markets.”
The securities industry’s bonus pool rose to $31.7 billion last year, up 6.8% from 2019. Growth after a recessionary event is unique, DiNapoli said, noting that the bonus pool dropped 47% in 2008 after the onset of the global financial crisis.
The estimate for 2020 is based on trends in personal income-tax withholdings, according to the statement. It includes cash bonuses for the current year and bonuses deferred from prior years that have been cashed in, but doesn’t take into account stock options or other forms of deferred compensation.
Employment in the securities industry has been steadily dropping over the years, with Wall Street losing 3,600 jobs in 2020. New York has also seen its share of the nation’s securities industry’s jobs slump -- to 19% last year from 33% three decades earlier.
During the pandemic, the decline was partly driven by the fact that many firms allowed employees to work from home, and some even opened trading operations in other parts of the country, the comptroller’s office said.
“It remains to be seen if these relocations are temporary,” DiNapoli’s office said.
Still, in New York City, the securities industry provides about a fifth of private-sector wages even though it accounts for less than 5% of private-sector employment. The comptroller’s office estimates that one in 10 of all jobs in the city are directly or indirectly tied to Wall Street.
“New York benefits when Wall Street succeeds,” DiNapoli said, “but our economy won’t fully recover until other sectors can reopen and all New Yorkers have a chance to share in economic success.”
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