DiNapoli: 2012 Wall Street bonuses projected at $20B
Part of the increase, he said at a news conference in Manhattan, comes from reforms seeking to stretch out Wall Street compensation over longer periods.
The securities industry accounts for 14 percent of state business and income tax revenue, giving it a large role in the state's financial picture. Wall Street's role in state finances has diminished as the industry has shrunk. Before the financial crisis, the industry contributed 20 percent of state tax revenue.
The financial crisis of 2008 led to reforms that increased the amount of deferred compensation, such as stock options. The goal was to change the incentive structure to discourage outsized risks being taken to realize short-term gains. The average bonus was $121,900 in 2012, a $10,550 increase from 2011.
Wall Street profits tripled in 2012 to $23.9 billion from $7.7 billion in the previous year, DiNapoli said. Part of the rise in profits was due to downsizing, he said. The securities industry shed 1,000 jobs in 2012 and has lost a net 19,800 jobs since the financial crisis.
Elizabeth Lynam, director of state studies for the Citizens Budget Commission, said the prospect of higher federal tax rates accelerated some bonus payments in 2012. It "probably doesn't bode too well" for tax receipts next year, she said.