Wall Street Bankers' Average Bonus Jumps to Highest Since 2006
(Bloomberg) -- Wall Street’s average bonus jumped 17 percent in 2017 to $184,220, the highest since 2006, according to estimates by New York State Comptroller Thomas DiNapoli.
The bonus pool climbed to $31.4 billion as employment in the industry dipped slightly in New York City, DiNapoli said Monday in a statement. The bonuses increased as profits from broker-dealer operations of New York Stock Exchange member firms increased to $24.5 billion, the most since 2010, according to the statement.
“The large increase in profitability over the past two years demonstrates that the industry can prosper with the regulations and consumer protections adopted after the financial crisis,” DiNapoli said in the statement. “It is too soon to tell how increased volatility in the financial markets might impact profits in 2018.”
Banks’ corporate clients took advantage of cheap financing last year, meaning investment bankers saw their bonuses swell as their businesses were buoyed by record debt-underwriting revenue and a jump in stock-underwriting and advisory fees. Their colleagues in sales and trading braced for smaller payouts as a prolonged slump in volatility crimped revenue in those businesses last year.
JPMorgan Chase & Co. investment bankers’ saw their 2017 bonus pool expand by about 5 percent, while fixed-income trading personnel saw theirs drop by about 12 percent, people with knowledge of the payments said in January. At Bank of America Corp., the investment-banking bonus pool rose between 5 percent and 10 percent, while in equities it shrank about 5 percent.
The bonus figure may have benefited from the rise in financial-stock prices last year as the Trump administration indicated it would seek to loosen regulations.
The comptroller’s estimate is based on income-tax filings and includes cash bonuses for 2017 and awards deferred from previous years, according to the statement. The estimate doesn’t include stock options or other forms of deferred compensation.
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