The bonus pool for Wall Street employees rose 2% to $23.9 billion during the December-to-March bonus season, according to an estimate released Wednesday by New York state Comptroller Thomas P. DiNapoli.
The average bonus paid to securities industry employees in New York City increased 1% to $138,210 in 2016 as pretax profits for broker/dealer operations increased 21% to $17.3 billion. It is the first increase in profits following three years of consecutive declines. Profits were driven by cutting costs and lowering non-compensation expenses, which includes the cost of legal settlements, according to Mr. DiNapoli’s news release announcing the numbers.
“Wall Street profits bounced back strongly in 2016. Lower costs more than made up for the continued decline in revenues,” Mr. DiNapoli said in the news release. “Bonuses were up only slightly in New York City as the industry held the line on compensation. The jump in profitability is good news since the industry generates a significant amount of tax revenue for both the state and city budgets.”
Employment on Wall Street grew 2.2% in 2016 to 177,000 jobs on average, with 3,800 jobs added last year vs. 2,800 in 2015. It is the highest employment on Wall Street since the 2008 financial crisis and the third consecutive year of job growth. However, the industry is still 7% smaller than it was before the 2008 financial crisis, while the rest of the private sector has grown 20%, according to the news release.
In 2015, the most recent data available, the average salary including bonuses for Wall Street employees was $388,000, compared to $74,000 in the rest of the city’s private sector. Data for 2016 are not yet available.