ALBANY — Last year was a good one to work on Wall Street.
The average bonus paid to securities industry workers in New York City rose a robust 17% in 2017 over 2016, state Controller Thomas DiNapoli said in his annual report on the financial sector’s performance.
The average 2017 bonus is estimated to be $184,220, DiNapoli said. All told, the total bonus pool totaled an estimated $31.4 billion, not including stock options.
The average Wall Street salary, including bonuses, hit $375,200 in 2016, the latest data available. DiNapoli said that’s five times higher than the average $74,800 paid to the rest of the private sector.
Twenty-three percent of financial sector employees made more than $250,000, compared with 2% in the rest of the city’s workforce.
DiNapoli said the growth in the 2017 bonus pool is likely tied to many firms moving up payments to December to get ahead of a change in the federal tax code beginning in 2018 that eliminates the corporate deduction for performance-based pay.
Meanwhile, securities industry profits also boomed in 2017, totaling $24.5 billion. That’s the highest level since 2010.
Profits jumped by 42% in 2017 after going up 21% in 2016 the year before, DiNapoli said.
Industry net revenue in 2017 hit $153 billion, up from 4.5% the prior year. Trading revenue rose 10% in 2017 even as it declined sharply as the year progressed, DiNapoli said.
“When Wall Street does well, the city and state benefit from higher tax revenues,” DiNapoli said.
The city’s financial industry accounts for 18% of the state’s tax collections and 6% of the city’s.
“The large increase in profitability over the past two years demonstrates that the industry can prosper with the regulations and consumer protections adopted after the financial crisis,” DiNapoli said.
He added that it is too soon to know just how the recent market volatility might impact this year’s Wall Street profits.
Even with the financial sector doing well, overall jobs in the industry saw a small decline in 2017 after three straight years of gains.
The industry now has 176,900 jobs, which is 6% smaller than before the Great Recession of the late 2000s. By comparison, the rest of the private sector in the city has grown by 23%, DiNapoli said.
While the financial sector may account for just 5% of the total private sector jobs, it generated more than 20% of all private sector wages paid in the city, with one in 10 jobs tied to the securities industry, he said.
Sarah Anderson, of the Institute for Policy Studies, said “the massive size of the Wall Street bonuses is disturbing.”
Anderson said such bonuses don’t just contribute to economic inequality in America, but also is “a sign that the reckless Wall Street bonus culture which contributed to the 2008 financial crisis continues to flourish.”
