Wall Street bonuses for 2016 may shrink again for the third year in a row, according to a new report from the New York State Comptroller.
Higher profits for Wall Street firms and lower bonuses for their well-paid employees, as well as a smaller, more geographically dispersed work force — those are the top-line takeaways from the annual state of the New York City securities industry report by New York State Comptroller Thomas P. DiNapoli.
Because Wall Street is on track for higher 2016 profits than last year, three years of consecutive Wall Street profit declines could be over, according to DiNapoli’s forecast, which pegs the securities industry’s profits in the first half of 2016 at $9.3 billion.
In 2015, by comparison, industry profits for the entire year were $14.3 billion, a decline of 11 percent from the previous year.
Thomas P. DiNapoli, NY State Comptroller
Year-end bonuses on The Street, however, are likely to be a more mixed story. On the one hand the “amount set aside by the member firms of the [New York Stock Exchange] for compensation in the first half of 2016 was 7 percent less than last year, which suggests that 2016 bonuses could decline for the third consecutive year,” DiNapoli says.
On the other hand, the average salary in the securities industry — “by far” the highest of any major industry in the city — was “five times higher in 2015 than the average salary of $74,100 in the rest of the city’s private sector,” per the state comptroller.
In 2015, the average bonus on Wall Street was $146,200, down nine percent from the year before. That same year the average salary (including bonuses) was $388,000, down four percent from 2014.
“Wall Street had solid profits in the first six months of the year and, barring a major setback, profits are on track to surpass last year,” DiNapoli says in a prepared statement, in which he hails New York City as the global capital of finance, though the industry, once concentrated in the concrete canyons of lower Manhattan, is much more of a presence in midtown and the New York suburbs than it was before the financial crisis and the 2001 terrorist attacks.
“While the securities industry in New York City is smaller than before the financial crisis, it remains critical to our local economy and one of the largest contributors to city and state tax revenues,” DiNapoli says.
Specifically, the New York-based securities industry lost eight percent of its jobs between 2007 and 2015, the comptroller’s report points out, calling it a period when the “rest of the city’s private sector [grew] by 17 percent. Between 1990 and 2007, the industry accounted for 39 percent of all private sector wage growth, but it accounted for just 11 percent between 2010 and 2015.”
Geographically, too, the securities industry has changed since the 2001 terrorist attacks, DiNapoli says. “In 2000, half of all industry jobs were located in Lower Manhattan, but the share fell to 19 percent by 2015. Two-thirds of the jobs are now located in Midtown Manhattan.”
Other specifics from the report include the following:
- The securities industry accounted for 18.5 percent of state tax collections in fiscal year 2015-2016, and seven percent of city tax collections in the city’s fiscal year 2016;
- Even though the securities industry accounted for fewer than five percent of the jobs in New York City in 2015, it accounted for 21 percent of all private sector wages;
- An estimated one in 10 jobs in New York City and one in 16 jobs in New York state are either directly or indirectly associated with the securities industry;
- In 2015, 23 percent of securities industry workers in New York City earned more than $250,000, compared with two percent in the rest of the city’s work force;
- The securities industry was responsible for six percent of the high-paying jobs added in New York City between 2010 and 2015, compared with one-quarter between 1990 and 2007;
- Between 2000 and 2015, securities industry employment in lower Manhattan declined by 60,100 jobs (65 percent) to 33,000. During the same period, industry employment in midtown Manhattan increased by 42,400 jobs (59 percent) to 113,700;
- New York City accounted for 19 percent of the nation’s securities industry jobs in 2015, down from 32 percent in 1990;
- New York City accounted for 89 percent of all securities industry jobs in New York state, a share that has declined only slightly over the past two decades;
- New York state has more than twice as many securities industry jobs as California, the second ranked state;
- And the average salary of securities industry jobs in the city’s suburbs has been growing. In 2015, the average salary on Long Island was $352,100, more than twice the average 10 years earlier. In Westchester, the average salary grew by 70 percent to $263,300.
To see the entire report, go to: http://www.osc.state.ny.us/osdc/rpt8-2017.pdf
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