Wall Street's Average Bonus Down 9 Percent In 2010

NEW YORK -- Wall Street paid an average cash bonus of $128,530 in 2010, down 9 percent from the previous year, as financial reforms prompted a shift toward more deferred compensation and higher base salaries, New York's state comptroller said in a yearly report on Wednesday.

Despite efforts by federal regulators, overall compensation, which includes stock awards, grew by 6 percent in 2010, said Comptroller Thomas DiNapoli. And in the first half of 2010, wages leaped 21.9 percent, partly due to cash bonuses that were awarded in 2009 but paid the following year.

Outrage over the federal government's bailout of banks and brokerages and fears that Wall Street's way of paying its employees encouraged too much risk-taking drove the companies into trying to spread these often rich awards out over more years and pay more of them in stock.

"Cash bonuses are down, but that's not an indicator of a weakness on Wall Street," Comptroller Thomas DiNapoli said. Adding that regulatory reforms prompted Wall Street to change its traditional way of rewarding success, he said: "Past practices rewarded short-term gains at the expense of long-term profitability."

Wall Street is the pillar of the economies of both New York State and New York City. But due to the financial crisis, Wall Street's contribution to the state's tax coffers has fallen to 13 percent from 20 percent previously. For New York City, the decline was to 7 percent from 13 percent.

The bankers and brokers receiving deferred compensation will not owe income taxes until they sell shares or exercise stock options, which could lead to a delay in tax collections.

However DiNapoli, a Democrat, said gaining a more stable financial industry would offset such delayed tax revenue.
"The industry's greater emphasis on deferred compensation will hold down tax collections this year, but the state and the city will benefit in future years when taxes are paid on this deferred compensation," he said.

(Reporting by Joan Gralla; Editing by Chizu Nomiyama)

Copyright 2010 Thomson Reuters. Click for Restrictions.

Comments

[ken607]

07:28 AM on 02/24/2011

rich CEO= big bonuses
the working class= sacrifice! lower pay & benefits.
the AMERICAN WAY?

[cay12]

01:28 AM on 02/24/2011

This post is a bit off topic, but I could not find an article on Huffington Post that addressed the issue. The new issue of Rolling Stone magazine has an article by Matt Taibbi entitled, Why Isn't Wall Street In Jail? Democracy Now interviewed Mr. Taibbi regarding the article, and you can watch it at the following link:

http://www.democracynow.org/blog/2011/2/22/matt_taibbi_why_isnt_wall_street_in_jail

It is an extremely disturbing interview.

[themodernleader]

11:03 PM on 02/23/2011

  What is wrong with windfall profits from swindling the United States government and American people?

[nofriendofrepublicans]

07:57 PM on 02/23/2011

Maybe we should take up a collection.

[GregCoyote]

07:48 PM on 02/23/2011

Who finds this acceptable? Limit taxes on guys like this? Who's your daddy?
I will say it again, we are watching a big fox robbing our hen house. Our only response so far has been to get more hens, from China.

[nogimmicks]

07:43 PM on 02/23/2011

$126K/y cash bonus to a regular WS employee (tens of millions to the top thieves) , - while the government keeps giving them the bailout money despite all that.

Compare with the median income of a US working family/household of 50K /year (census data in 2006)

[GregCoyote]

07:38 PM on 02/23/2011

Fire teachers, but don't dare tax these guys. Until Wall Street is held accountable, I for one see any action the right does towards debt reduction to be hypocrisy. They want to control a fire mans salary, but not somebody on Wall Street using public dollars to pay himself hundreds of millions.

[builderman55]

07:09 PM on 02/23/2011

Is this a great country (for the rich) or what???

[Roadrun]

06:59 PM on 02/23/2011

"Wall Street's contribution to the state's tax coffers has fallen to 13 percent from 20 percent previously. For New York City, the decline was to 7 percent from 13 percent"

Okay, so STILL nobody is in prison for the crimes and they have been given (yes, like a birthday present) tax breaks and only now is someone noticing that there is a decline in tax revenue.

[whatsthat1]

06:41 PM on 02/23/2011

Is Chris Dodd still living in this country or has he already skipped out to Switzerland, close to the millions of payoffs he got for authoring that "bail out the banks and screw the middle class" bill?