Cash bonuses on Wall Street ex­pected to drop

The Washington Times Daily - - Business - BYMICHAEL GORM­LEY

AL­BANY, N.Y. | Wall Street cash bonuses for 2011 are ex­pected to drop 14 per­cent and prof­its are ex­pected to drop by half for the sec­ond year in a row, ac­cord­ing to a fore­cast Wed­nes­day by New York state Comptroller Thomas Dinapoli.

That would re­sult in cash bonuses of $19.7 bil­lion. Prof­its are ex­pected to be less than $13.5 bil­lion in 2011, com­pared with $27.6 bil­lion in 2010.

The av­er­age cash bonus is ex­pected to be $121,150 for 2011, down from $138,940 in 2010. Bonuses peaked be­fore the re­ces­sion in 2006 at $191,360.

Mr. Dinapoli said the fore­cast for this bonus sea­son shows con­tin­ued hard times on Wall Street two years af­ter the re­ces­sion of­fi­cially ended. The se­cu­ri­ties in­dus­try lost 28,000 jobs, in­clud­ing 9,600 that had been briefly re­cov­ered be­fore the slide be­gan in April.

“Se­cu­ri­ties firms in New York City re­sumed down­siz­ing in the sec­ond half of the year,” Mr. DiNapoli said. “The se­cu­ri­ties in­dus­try, which is a crit­i­cal com­po­nent of the economies of New York City and New York state, faces con­tin­ued chal­lenges as it works through the fall­out from the fi­nan­cial cri­sis and ad­justs to reg­u­la­tory re­forms.”

Wall Street has tra­di­tion­ally ac­counted for 20 per­cent of the state’s tax rev­enue, but that de­clined to 14 per­cent last year. Dur­ing the same two years, Wall Street’s con­tri­bu­tion to New York City’s tax rev­enue dropped to 7 per­cent from 13 per­cent.

Gov. An­drew Cuomo said he hadn’t seen the re­port, but is con­fi­dent his 2012-13 bud­get pro­posal re­flects the trends.

The Demo­crat said Wall Street’s per­for­mance af­fects all New York­ers, and job gains or losses there trans­late into gains and losses through­out the city and state.

“The av­er­age bonus is still $121,000, so ob­vi­ously these jobs are still very well com­pen­sated,” Mr. DiNapoli said. “If you love or hate Wall Street, it’s still an im­por­tant part of our econ­omy . . . peo­ple spend­ing money al­ways helps the rest of us.”

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