Wall Street’s ’13 bonuses soar to average $164,530

Cash bonuses paid to Wall Street employees in New York City rose 15 percent on average last year to $164,530, according to a report Wednesday from Thomas DiNapoli, the state comptroller. That was the biggest average bonus since 2007, the year before the financial crisis struck.

Overall, workers in the financial industry in the city made $26.7 billion in bonuses last year, a number that, again, was the highest level since before the crisis. The bonus figures encompass everyone from the low-ranking employee to the chief executive, so high payouts to top managers can raise the average.

The bonuses rose even as profits from broker-dealer operations of New York Stock Exchange member firms fell 30 percent to $16.7 billion in 2013.

The average salary including bonuses in 2012 was $360,700, or more than five times greater than the rest of the private sector. The industry accounted for 22 percent of all private-sector city wages in 2012 in New York City and 5 percent of the jobs, the report said. The securities industry generated an estimated $3.8 billion in city taxes in fiscal 2013 and $10.3 billion in state taxes in the state’s last fiscal year.

Shares of Goldman Sachs Group Inc., Bank of America Corp. and Morgan Stanley each rose more than 95 percent over the past two years, making equity awards worth more than when they were granted in previous years. During the same period, the bonus pool has grown by 44 percent, driven by deferred compensation, DiNapoli said.

“The industry still had a good year in 2013 despite costly legal settlements and higher interest rates,” said DiNapoli, a Democrat. “Wall Street continues to demonstrate resilience as it evolves in a changing regulatory environment.”

While profit at JPMorgan Chase & Co., the largest U.S. bank, declined as it announced more than $23 billion in legal and regulatory settlements, the bank said it wouldn’t hold those costs against employees when deciding pay because the behavior under scrutiny often happened in previous years.

Trading and investment-banking revenue at the nine biggest global firms fell 4 percent to $160 billion in 2013, as a drop in fixed-income revenue outweighed gains in equity trading and fees from advising and underwriting.

The largest Wall Street investment banks each set aside a smaller portion of revenue for employee pay to cut costs and improve returns.

Morgan Stanley reduced the portion of pay that it deferred to later years for top earners. The bank, which set aside 100 percent of 2012 bonuses for employees who had both total pay of at least $350,000 and incentive pay of $50,000, this year deferred 50 percent to 98 percent of those workers’ bonuses.

An impasse over spending in Washington in October that led to a partial federal government shutdown and legal expenses - including JPMorgan’s $13 billion settlement to end federal investigations of its mortgage-bond sales - helped drive down earnings, DiNapoli said.

A blow to Wall Street’s take could have hurt the bottom line for the state and New York City. In fiscal 2013, taxes on the securities industry and its workers delivered $10.3 billion to state coffers, or almost 16 percent of all revenue, DiNapoli said in an October report.

In New York City, Wall Street accounted for 8.5 percent of all receipts in fiscal 2013. The city’s tax revenue could be $100 million higher than projected this year because its budget assumed a 5 percent drop in the bonus pool.

The securities industry employed 165,200 workers in the city in December, 12.6 percent fewer than before the financial crisis, though employment levels have stabilized, DiNapoli said.

The $26.7 billion in bonuses Wall Street banks handed out in 2013 would be enough to more than double the pay for all 1,085,000 full-time U.S. minimum-wage workers, according to an Institute for Policy Studies analysis of New York State comptroller bonus figures released Wednesday morning.

Information for this article was contributed by Freeman Klopott and Michael J. Moore of Bloomberg News; by Michael Virtanen of The Associated Press; and by William Alden of The New York Times.

Front Section, Pages 1 on 03/13/2014

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