NEW YORK — Bonuses paid to Wall Street securities industry employees in New York rose 17 percent to $20.3 billion in 2009, state officials said Tuesday.
New York State Comptroller Thomas DiNapoli said total compensation at the largest securities firms grew even faster and industry profits could hit a record amount after unprecedented losses in 2008.
“Wall Street is vital to New York’s economy, and the dollars generated by the industry help the state’s bottom line,” DiNapoli said.
“But for most Americans, these huge bonuses are a bitter pill and hard to comprehend. There’s a lot of resentment against the industry over its role in the global economic meltdown. Taxpayers bailed them out, and now they’re back making money while many New York families are still struggling to make ends meet.”
The figures highlight the unprecedented turmoil in the financial sector after a near-meltdown in 2008 followed by massive efforts to revive the industry.
The bonus pool figures — which only reflect amounts paid to those who work in New York City — fell 47 percent in 2008 but rose sharply last year as the sector recovered.
The 2009 level remained below the record bonus pool of $34.3 billion in 2006.
Napoli said the big bonus payments underscore concerns about risky financial practices that many say led to the boom and bust that dragged the global economy into its worst recession in decades.
“We cannot see a repeat of the risky behavior that crippled our economy,” he said.
“Tying compensation to long-term sustainable profits is a step in the right direction. We also need the right level of regulatory protections to make sure the securities industry thrives without driving the rest of us out on a fragile economic limb.”
DiNapoli’s estimate is based on tax collections and reflects cash bonus payments and deferred compensation for which taxes have been prepaid. The estimate does not include stock options that have not yet been realized or other forms of deferred compensation.
The figures also showed that broker-dealer operations of New York Stock Exchange member firms earned a record $49.9 billion through the first three-quarters of 2009.
Based on this, DiNapoli forecast that profits could exceed $55 billion in 2009, nearly three times greater than the previous record. In 2008, the industry lost a record $42.6 billion.
The report showed compensation at the major firms Goldman Sachs, Morgan Stanley, and JPMorgan Chase Investment Bank, which are more diversified than traditional broker-dealers, increased by 31 percent in 2009 and average compensation rose by 27 percent to more than $340,000.
Data was not available on the securities operations at Citibank and Bank of America.
Wall Street accounted for 24 percent of the wages paid to workers in New York City in 2008 even though it accounted for only five percent of the jobs, DiNapoli said.
Employment in the securities industry in New York City declined by 31,500 jobs between November 2007 and August 2009, a decline of 16.7 percent. Since then, the industry has added 3,900 jobs through December.