Wall Street will cut bonuses next year as revenue drops amid a sluggish U.S. economic recovery, the European debt crisis and new compensation structures to curb risk taking, New York State Comptroller Thomas DiNapoli said.
Bonuses are “certainly going to be lower,” DiNapoli said today in a Bloomberg Television interview with Erik Schatzker on “Inside Track.” Banks will have less money to pay awards, and “you’re seeing an increase in base salary pay, and more in terms of bonuses and incentives that are paid out over time,” he said.
Wall Street cash bonuses fell 8 percent last year from 2009 as financial companies disbursed $20.8 billion. The average Wall Street cash award for an employee was $128,530 in 2010, a 9 percent drop that was greater than the total decline because the pool was shared among more workers.
After adding 9,900 jobs between January 2010 and April 2011, the securities industry cut 4,100 positions through August and may shed an additional 10,000 jobs by the end of 2012, DiNapoli said in a report released yesterday. Each job gained or lost in the industry creates or eliminates three other jobs in New York City and state, according to the report.
“When we shed jobs, over time, it will have a ripple, negative effect on other parts of our economy,” DiNapoli said in the interview.
The anti-Wall Street protesters in New York’s financial district are “channeling the frustration I think many Americans feel,” DiNapoli said.
“This is a money-maker for our city and state,” he said referring to Wall Street. “We can argue about what’s the appropriate level of regulation, but we want this industry to be profitable and sustainable and to employ even more people.”
To contact the reporter on this story: Charles Mead in New York at firstname.lastname@example.org
To contact the editor responsible for this story: David Scheer at email@example.com