Wall Street's bonuses fell 25 percent in 2011
By Joan Gralla
NEW YORK (Reuters) - Wall Street's bonuses fell nearly 25 percent in 2011, a New York City fiscal watchdog estimated on Monday, a less severe drop than the industry had anticipated, though still likely to deal a blow to the economies of New York City and New York state.
Compensation experts had said this important component of total wages earned by securities industry employees would plunge 30 percent to 40 percent.
However, the decline in bonuses as estimated by the New York City Independent Budget Office was nearly twice that forecast last week by the state comptroller, who had forecast a 13 percent shrinkage, to $121,150 per person.
Profits earned by Wall Street firms were estimated by the Independent Budget Office at $10.5 billion for 2011, a steep drop from $27.6 billion in 2010.
Last week, State Comptroller Thomas DiNapoli forecast that Wall Street's profits in 2011 would not top $13.5 billion.
Wall Street, which powers the economies of New York City and New York state, is expected to shed 4,300 jobs in 2012, while wages, including bonuses, will fall 7.5 percent, the Independent Budget Office said in a statement.
In contrast, the City Council Finance Committee, in a separate report issued on Monday, said that in 2011 the average wage earned by a securities industry worker should rise 1.6 percent to $369,000 a year.
Wall Street's profits and high compensation drive job creation in a host of other industries, from law firms to restaurants. Continued...