The average Wall Street bonus fell 4.7 percent last year as the
subprime mortgage crisis took its toll on the financial services
industry, according to a report issued by State Comptroller Thomas DiNapoli today.
The prior year’s bonuses, however, set records, and
DiNapoli downplayed the drop, saying this year’s bonuses were not too
far off from those record levels.
“The securities industry rewarded
employees who performed well in 2007 even though the credit crunch
battered profits,” DiNapoli said in a statement. “And, despite the
decline in bonuses from last year, State and City personal income tax
collections remain strong.”
In total, bonuses fell 2 percent to $33.2
billion, down from a record $33.9 billion in 2006. In October, DiNapoli said Wall Street bonuses could fall by as much as 10 percent.
The news wasn’t all
bad on Wall Street today, at least for the biggest firms. Bloomberg News
reported today that Wall Street’s five biggest firms paid a record in bonuses in 2007, despite record losses for some firms that
bet heavily in mortgage-related investments.
The real estate industry has eagerly awaited bonus season to get the market off to strong start this year. DiNapoli sounded a cautionary note about looming economic problems.
“The losses sustained in the securities industry during the second half of 2007 are a fairly clear indicator that tax collections, especially from business taxes, will erode in 2008,” he said.
In the first 11 months of 2007, the financial services sector added 9,600 jobs, he said. The industry accounts for 9 percent of city tax revenues. TRD