Wall Street bonuses jumped by more than 20 per cent in 2021, with the average payout hitting a record high of $257,500, according to a report from the New York State Comptroller.
The New York City securities industry bonus pool grew 21 per cent to $45bn in 2021. The bonus pool increased 25 per cent in 2020, when the average payout was $213,700.
“Wall Street’s soaring profits continued to beat expectations in 2021 and drove record bonuses,” said New York State Comptroller Thomas DiNapoli. But “sluggish” and “uneven” markets so far in 2022 would probably drive near-term profitability and bonuses lower this year, he added.
Banks have been paying big bonuses to employees after raking in record profits last year and amid heightened anxiety over a potential talent exodus after widespread complaints about burnout during the pandemic.
Earlier this year, Bank of America said it was handing out its largest special pay awards since it started giving out additional bonuses tied to company performance six years ago.
But bankers will have to stay in their jobs to earn the payout in full. The special stock awards will vest in equal payments over four years starting in 2023.
Taxes on wages from the securities industry have made up a significant portion of New York state’s revenue base for years, despite the industry accounting for just 5 per cent of private sector jobs in New York City.
However, New York City’s share of US securities jobs has declined from 33 per cent in 1990 to 18 per cent in 2021, underscoring the decision by some firms to shift roles to other states such as Florida and Texas.
Including bonuses, last year’s average security industry salary of $438,470 was nearly five times higher than the $92,315 average in the rest of the private sector.
“In New York, we won’t get back to our pre-Covid economic strength until more New Yorkers and more sectors — retail, tourism, construction, the arts and others — enjoy similar success,” DiNapoli said.