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

  • Average bonus climbed 1% last year to $138,210, estimate shows
  • Comptroller says industry added 3,800 Wall Street jobs

Wall Street’s bonus pool rose 2 percent to $23.9 billion in 2016, the first increase in three years, according to estimates by New York State Comptroller Thomas DiNapoli.

The bonus pool climbed as the industry added 3,800 jobs in New York City to reach 177,000, DiNapoli said Wednesday in a statement. The average bonus was up 1 percent to $138,210, and pretax profits from the broker-dealer operations of New York Stock Exchange member firms jumped 21 percent to $17.3 billion, the highest level in four years.

“The jump in profitability is good news since the industry generates a significant amount of tax revenue for both the state and city budgets,” DiNapoli said in the statement.

A year-end surge in fixed-income trading revenue helped send profit at the six largest U.S. banks climbing to $93 billion in 2016, a $240 million increase from a year earlier and the highest level since at least 2009, according to data compiled by Bloomberg. At the same time, banks have been cutting costs by reducing headcount, with more than half a million Wall Street jobs disappearing since the crisis.

For more, read Bloomberg’s QuickTake on banker bonuses.

Goldman Sachs Group Inc. didn’t pay 2016 bonuses to about 100 bankers who advise on takeovers and underwrite securities offerings, people with knowledge of the matter said last month. The firm’s investment-banking revenue tumbled 11 percent to $6.27 billion in the year, a sharper drop than rival JPMorgan Chase & Co., where that unit’s revenue fell 6.7 percent.

Still, fixed-income traders likely saw a bump in their bonus payments after worldwide political events set off a frenzy of transactions last year. JPMorgan boosted its bonus pool for traders dealing in government bonds, swaps and other assets tied to interest rates by about 20 percent, while Morgan Stanley and Bank of America Corp. increased those pools by about 10 percent, people familiar with the matter said in January.

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