Wall Street's Bonus Pool Rises for First Time in Three Years

Paterniano Del Favero
Marzo 16, 2017

Profits in the securities industry surged by 21% to $17.3 billion in pre-tax profits with the average bonus increasing 1% to $138,210 in 2016, according to estimates released Wednesday by New York State Comptroller Thomas P. DiNapoli.

The pretax profits for New York Stock Exchange member firms was the highest in four years, the report said, and reversed a three-year decline.

Indeed, New York reaped more than $8 billion from settlements with banks and Wall Street firms in recent years, boosting the state's coffers.

"Wall Street profits bounced back strong in 2016", said DiNapoli, of Great Neck Plaza.

Overall, Wall Street profits jumped a hefty 21% in 2016 over 2015, fueled largely by industry cost-cutting that outpaced a continued drop in revenues, DiNapoli said.

But DiNapoli said the state's finances should be minimally impacted: higher personal income-tax collections should offset any unrealized revenue.

That's according to data from the New York State Comptroller's Office. Bonuses remain well below than the levels they were in their heydays before the financial crisis, when the average bonus reached as high as $191,360 in 2006.

The industry, though, is still 6 percent smaller than it was in 2007, DiNapoli said.

Expenses not tied to employee compensation, including legal settlements, fell by almost $3.8 billion, or 6.2 percent in 2016.

To be sure, the average bonus on Wall Street is still well down from the before the financial crisis, and is basically flat from where it was when Dodd-Frank was passed in 2010.

The $23.9 billion bonus pool for 177,000 Wall Street employees is 1.6 times the combined annual earnings of all 1,075,000 US full-time minimum wage workers, the IPS study found.

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