NEW YORK Wall Street bonuses for 2015 slumped to a three-year low as volatility in financial markets eroded profits, the New York state comptroller said in a report that also warned of weaker profits and job cuts for the industry this year.
The average Wall Street bonus paid out on 2015 profits fell 9 percent to $146,200, its lowest since 2012, according to the report released on Monday by the top fiscal watchdog.
The overall bonus pool fell 6 percent to $25 billion at broker-dealer operations of New York Stock Exchange member firms, the report said. Industrywide, profits declined by 10.5 percent to $14.3 billion during the year.
Falling compensation could reduce tax revenues in New York state and city, which get billions of dollars from securities-related businesses each year, the report said.
"Wall Street bonuses and profits fell in 2015, reflecting a challenging year in the financial markets," New York State Comptroller Thomas DiNapoli said in a statement. "Lower profits could mean fewer industry jobs and less tax revenue."
DiNapoli uses tax withholding data to measure bonuses at broker-dealer firms because of the importance of their income-tax contributions to the state budget.
Despite the declines in profitability the industry added 4,500 jobs last year and employed 172,400 on average in 2015. This was the first time the industry added jobs in two consecutive years since the financial crisis of 2007-2009.
Even with the job gains, however, the industry is 8 percent smaller than before the crisis.
The comptroller's report, based on tax withholding data, provides an early estimate of the bonus pool for securities industry employees in New York City during the traditional December to March bonus season.
The estimate is not exact because it does not include stock options or other forms of deferred compensation, or bonuses paid to employees outside the city.
DiNapoli estimates that the securities industry accounts for tax revenue of $3.8 billion, or 7.5 percent, for New York City and $12.5 billion, or 17.5 percent, for the state.
(Reporting by Edward Krudy; Editing by Lisa Von Ahn)
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First Published On : Mar 8, 2016 00:15 IST