The average bonus paid to securities industry employees in New York City in 2013 grew 15% to hit $164,530 in 2013, according to estimates released Wednesday by New York State Comptroller Thomas P. DiNapoli. That includes cash for the current year and compensation deferred from prior years.
This marks the third biggest bonus on record, says DiNapoli. The other two stand-out years: 2006, when workers gleaned $191,360 and 2007, when they gained $177,830.
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The comptroller's office examines personal income tax trends to get the estimate. The bonus figures don't include stock options or other forms of deferred compensation for which taxes haven't been withheld.
Although profits were lower than in past years, Wall Street still had a healthy 2013, DiNapoli said in a statement.
Firms had to deal with costly legal settlements, higher interest rates and an evolving regulatory environment, yet "Wall Street continues to demonstrate resilience," he says.
Wall Street, which had record losses during the financial crisis, has shown profits for five consecutive years, he says.
Profits for the broker/dealer operations of New York Stock Exchange member firms totaled $16.7 billion in 2013. That is 30% less than in 2012, DiNapoli said in the statement, "but still strong by historical standards."
Even with the strong profits, Wall Street's overall recovery isn't coming along "as fast as we had all hoped," says financial industry compensation consultant Alan Johnson.
He likened the recovery process to "two baby steps forward and then a step backwards."
The securities industry in New York City is making its comeback with fewer workers. It had about 165,200 workers in December, which is 12.6% less than before the financial crisis. Those tough economic times brought about massive layoffs as well! as the demise of entire financial firms.
Technological shifts, such as the move to electronic trading, has also reduced the ranks of Wall Street workers, as has the move to outsource operations to other parts of the U.S. and overseas.
For the firms that remain in New York City, offering healthy bonuses is a strategic way to recruit and retain top talent, says Johnson.
"Outside of the industry, bonuses generally make up a small part of people's pay," he says. "In the industry, they can make up a big part of the pay."
By offering robust bonuses, firms are better able to lure in those who would consider jobs in other financial areas such as working for hedge funds or consulting firms.
"Many high-performing people have a number of (job) choices," Johnson says.
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