Bonuses for Wall Street workers fell 26 percent in 2022 as a slowdown in contracting cooled the industry after a surge in previous years.
data, was Published on Thursday New York State Comptroller, Thomas P. DiNapoli is another sign of a change in fortunes for Wall Street bankers, who spent much of 2020 and 2021 on a deal-making frenzy that created more personal financial rewards.
The average bonus for an employee in New York’s securities industry was $176,700 last year, rising to $240,000 in 2021 and $213,700 in 2020. Last year’s bonus levels were more in line with rewards recorded before the pandemic.
Now, instead of competing for workers by offering generous perks like free Peloton bikes and shorter weekend work days, investment banks have been announcing layoffs over the past few months. In January, Goldman Sachs cut thousands of jobs.
In 2022, a steep decline in investment-banking fees as a result of fewer mergers, debt problems and public offerings led to a 56 percent drop in overall pre-tax profits on Wall Street. A year of rising interest rates, stubbornly high inflation and Russia’s war in Ukraine has dampened all forms of financial activity. The recent collapse of Silicon Valley Bank, Signature Bank and an outbreak of fears about the health of the banking system could make 2023 an even leaner year for those working in high finance.
Many bankers have adjusted their spending accordingly, buying back everything from vacations to luxury cars. However, a select few high-performing hedge fund managers have made huge profits during the turmoil, resulting in giant payouts.
Mr. Trump is shepherding Manhattan’s economic recovery after the pandemic temporarily closed many of the city’s entertainment venues and reshaped commuter habits. DiNapoli said the impact on industrial profits had limited impact on Manhattan’s financial stability.
“While lower bonuses hurt state and city income tax revenues, our economic recovery does not depend on Wall Street alone,” Mr. DiNapoli said in a statement.
However, Mr. DiNapoli estimates that Wall Street will be responsible for 16 percent of all economic activity in the city by 2021, making the industry “crucial to New York.”
In 2022, the securities industry will employ about 190,800 people in New York, or one in 11 jobs in the city, the highest level in several years. But as workers have moved into industries like technology and large companies have left the city, the industry’s height has generally been in decline for a long time.