Bonuses earned last year by Wall Street employees soared 17 percent to $184,220 on average, according to a new report.
State Comptroller Thomas P. DiNapoli said Monday an estimated $31.4 billion in bonuses were paid between December 2017 and this month. They were paid for work performed last year at stockbroker/deal firms that are members of the New York Stock Exchange, a standard measure of bonus activity.
Wall Street bonuses boost the economy of New York City, as well as that of Long Island and the entire state. Bonus recipients also contribute an outsized amount of tax revenue to the city and state.
“People are going to spend most of that money where they live...So, I think in terms of the impact on the Long Island economy, it will be positive,” DiNapoli said in a conference call with reporters.
He said bonus income often is spent on vacation homes in the Hamptons and on the North Fork, and for luxury items such as boats and jewelry. He also said East End restaurants and tourist attractions benefit from stockbrokers’ spending.
About 20 percent of Long Islanders commute to the city for jobs, many of them on Wall Street, according to research by the Long Island Association business group and the Center for An Urban Future in Manhattan.
While the average bonus is up year over year, employment on Wall Street fell by 100 jobs last year to 176,900 compared with 2016.
Wall Street firms posted pre-tax profits of $24.5 billion last year, an increase of 42 percent compared with 2016. It was the second consecutive year of profit gains. The 2017 profit was the highest since 2010, DiNapoli said.
The higher profit was driven by increases in wealth management fees, underwriting and other income related to advice on mergers and acquisitions, and other securities activities.
"The large increase in profitability...demonstrates that the industry can prosper with the regulations and consumer protections adopted after the financial crisis" and 2007-09 recession, said DiNapoli, a Democrat, referring to the Dodd-Frank financial regulations law and the federal Consumer Financial Protection Bureau. Both have been targeted for elimination by the Republican-controlled Congress.
The average compensation, including salary and bonus, of Wall Street workers was $375,200 in 2016, the most recent available data.