Bonuses earned last year by Wall Street employees climbed 10% to $184,000 on average as stock markets soared despite the coronavirus, according to a new report.
State Comptroller Thomas P. DiNapoli said Friday an estimated $31.7 billion in bonuses were paid between December and this month for work performed in 2020. That compares with $29.7 billion in 2019.
He said the 2020 numbers reflect increased buying and selling of stocks and underwriting activity. A year ago, he predicted that COVID-19 and the recession it has brought on would cause bonuses to shrink.
"Wall Street's near-record year shattered all expectations," DiNapoli, of Great Neck Plaza, said on Friday.
He said the higher bonus payments in New York City’s securities industry are unusual during a recession. Bonuses fell 33% in 2001 after the Sept. 11 terrorist attacks and 47% in 2008 during the last economic downturn.
DiNapoli said Wall Street’s success, while vital to the state’s economy, doesn’t mean the recession is over. "Our economy won’t fully recover until other sectors can reopen and all New Yorkers have a chance to share in economic success," he said.
Bonus recipients contribute an outsized amount of tax revenue to the budgets of the state and city: 18% and 6%, respectively.
News of higher Wall Street bonuses comes as Gov. Andrew M. Cuomo and the State Legislature negotiate a new state budget before the April 1 deadline.
About 20% of Long Island workers are employed by New York City-based companies, 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. Those receiving bonuses often purchase second homes on the East End, automobiles, boats and vacations to exotic locales.
The bonus data is only for securities industry employees in New York City and doesn’t include stock options and other deferred compensation for which taxes haven’t been paid. Not all workers received a bonus.
Brokerages’ pretax profit totaled $50.9 billion last year, up 81% from 2019. That’s the second-highest level after 2009’s $61.4 billion, according to DiNapoli.
Still, while profit climbed the brokerages cut 3,600 jobs last year, or 1.9%, bringing total employment in the city’s securities industry to 179,900 jobs.
DiNapoli said, "Securities firms swiftly enabled employees to work remotely and some opened trading operations in other parts of the country. It remains to be seen if these relocations are temporary."