Wall Street bonuses and bank profits both took a hit in 2011.
The average Wall Street employee took home a cash bonus of just over $120,000 last year, down 13 percent from 2010, according to an estimate released Wednesday by State Comptroller Thomas DiNapoli. Bank profits fell to $13.5 billion — making it the second consecutive year that bank profits dropped by more than half.
It’s unclear banks profits and compensation will remain at these levels going forward, but DiNapoli said a silver lining of a smaller securities industry could be increased stability.
“We may not have the peaks that we had a few years ago ever again,” DiNapoli told WNYC. “But of the tradeoff is that we don’t have the kind of valley that we had in ’08, ’09, I think that’s good for everyone, certainly from the point of view of city and state budgets.”]
Historically, Wall Street income taxes are an important source of revenue for the city and state. Before the start of the financial crisis, Wall Street contributed 13 percent of city tax revenues. In 2011, the comptroller estimates that will drop to less than 7 percent.
But while bank profits and bonuses declined, compensation as a share of revenue rose. Fifty-two percent of net revenue went to salary and bonuses during the first three quarters of 2011 — that’s up from 47 percent in 2010 and 36 percent in 3009.
The industry also continued to shrink, losing 4,300 jobs between April and December in 2011.
With reporting by Colby Hamilton