Wall Street cash bonuses highest since 2008 crash: report

Wed Mar 12, 2014 12:02pm EDT
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By Edward Krudy

NEW YORK (Reuters) - The average bonus on Wall Street jumped 15 percent last year to the highest level since the 2008 financial crisis and was the third largest on record, New York State's budget watchdog said on Wednesday.

The cash bonus pool swelled to $26.7 billion in 2013, pushing the average cash bonus to $164,530, a post-2008 high, according to the New York state comptroller's annual estimate.

The increased payouts came as Wall Street posted a fifth consecutive year of profits after record losses during the financial crisis. Profits for broker-dealer operations of New York Stock Exchange member firms, however, fell 30 percent to $16.7 billion in 2013, the report said.

"Wall Street navigated through some rough patches last year and had a profitable year in 2013. Securities industry employees took home significantly higher bonuses on average," Comptroller Thomas DiNapoli said in a statement.

The comptroller's report provides early hard estimates of the bonus pool for security industry employees in New York City during the traditional December-to-March bonus season.

The estimate is not an exact view of 2013 bonuses because it reflects cash bonuses and deferred pay from which taxes have been withheld. The estimate does not include stock options or other forms of deferred compensation. Bonuses paid to employees outside New York City are not included in the estimate.

The comptroller's office compiles estimates on Wall Street bonuses because of their importance to state and city tax revenues. The report estimates that New York City gained $3.8 billion in taxes from the securities industry in fiscal year 2013, 27 percent more than in the previous year and the second highest level on record.

It also estimates that city tax revenues could be $100 million higher than forecast in the city's budget because the budget assumed a 5 percent decline in the bonus pool.   Continued...

A Wall St. sign is seen in New York's financial district September 16, 2008. REUTERS/Lucas Jackson