Cash bonuses paid by securities firms to their New York City employees fell 44 percent in 2008 to an estimated $18.4 billion, compared with about $33 billion a year earlier, according to a report issued by New York Comptroller Thomas A. DiNapoli.
Financial industry job losses helped boost average bonus sizes, which declined 36.7 percent to $112,000 per employee, Napoli’s office reported. The number of New Yorkers employed by the securities industry shrank by 19,200, or about a tenth, during 2008.
Many top Wall Street executives have said they would forgo their 2008 bonuses. In fact, the government’s bailout of the financial industry places some restrictions on executive compensation. But no such caps exist for lower-ranking employees.
Which doesn’t mean they’re happy with what they got. An online survey of finance employees by eFinancialCareers.com, a Wall Street jobs Web site, found that 46 percent of those polled were dissatisfied with their 2008 bonus.
A slightly larger proportion of the survey’s respondents said they received a smaller bonus last year than in 2007, but those who reported larger bonuses saw a relatively small increase on average. Conversely, those who got less saw declines between 31 percent and 50 percent, the site said.
With losses mounting and share prices swooning, perhaps Wall Streeters should be glad to get anything at all. Worldwide, banks, brokerages and insurance companies have written down more than $1 trillion worth of toxic investments since 2007, according to data compiled by Bloomberg. With mergers and securities underwriting slumping and initial public offerings in a deep freeze, many banks have seen fee income shrivel as well.
The crisis has remade New York City’s financial sector. Bear Stearns and Merrill Lynch were taken over by rivals, Lehman Brothers filed for bankruptcy, and Goldman Sachs and Morgan Stanley converted themselves into commercial banks. After receiving $45 billion in capital injections under the Troubled Assets Repurchase Program, Citigroup now counts the U.S. government as its biggest shareholder.
DiNapoli predicted in a statement that this year will also be a difficult one for Wall Street.
“The securities industry has already lost tens of thousands of jobs and the industry is still continuing to write off toxic assets,” he said. “It’s painfully obvious that 2009 will probably be another difficult year for the industry.”
Filed by Tim Catts of Financial Week, a sister publication of Workforce Management. To comment, e-mail firstname.lastname@example.org.
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