Wall Street's bonus pool rose 3% to $28.5 billion in 2014, according to estimates by New York state Comptroller Thomas DiNapoli.
Employees took home an average bonus of $172,860 as the industry added 2,300 jobs, the first time it's expanded since 2011, Mr. DiNapoli said Wednesday in a statement. The bonuses rose even as profits from broker-dealer operations of the New York Stock Exchange member firms fell 4.5% to $16 billion last year. It was the second straight annual decline as legal settlements tied to banks' role in triggering the financial crisis depressed profits.
“The securities industry remains profitable and well-compensated even as it adjusts to regulatory changes,” Mr. DiNapoli said. “The resumption of job growth in the securities industry bodes well for New York's economy, but it remains to be seen whether this trend will be sustained.”
The bonuses estimated by Mr. DiNapoli fall within the range assumed by both the state and New York City budgets, the comptroller said. Though the number of jobs rose to 167,800, the industry is still 11% smaller than it was in 2007 before the financial crisis, he said. Each new securities job creates two additional ones in other industries, he said.
J.P. Morgan Chase, the largest U.S. bank, posted an 8% decline in trading revenue last year. Goldman Sachs Group, which set a Wall Street trading record in 2009, had its lowest revenue from that business since 2005.
Bank of America and Goldman Sachs are among financial firms paying for legal settlements. In August, Bank of America agreed to pay almost $16.7 billion to end federal and state probes into mortgage-bond sales.
The same month, Goldman Sachs agreed to pay $3.15 billion to repurchase residential mortgage-backed securities to resolve federal claims tied to the sale of the bonds to Fannie Mae and Freddie Mac.
While the settlements are undermining profits, they've been a boon to New York state, giving it a record $5 billion surplus for the fiscal year that ends March 31. The largest chunk comes from a $3.6 billion deal in June with BNP Paribas after the French bank admitted to evading U.S. sanctions against Sudan, Cuba and Iran.