Wall Street Financial Firms That Received the Highest Bonuses

New York State Comptroller Thomas P. DiNapoli and staff recently conducted a study of New York City financial firms and the bonuses employees received in 2009. The study shows that bonuses rose nearly 17 percent, to $20.3 billion, during a year where the securities sector earnings are forecasted to exceed an unprecedented $55 billion.

Through the first three quarters of 2009, broker-dealer operations of New York Stock Exchange (NYSE) member firms earned a record setting $49.9 billion. In the previous year, the industry lost another record setting figure of $42.6 billion.

Compensation at major investment banks, including those that are more diversified than traditional brokers, such as Goldman Sachs, JPMorgan Chase, and Morgan Stanley, increased 31 percent in 2009. The average compensation rose more than $340,000, up 27 percent over the previous year. Citibank and Bank of America data was not included in these figures.

The majority of the largest financial firms are not paying their top executives cash bonuses, instead compensation is provided in the form of stock options and other forms of deferred payment. Also notable, is that the industry did not devote as much net revenue to compensating employees in 2009, as they have in past years. Over the past several decades, it wasn’t uncommon for salaries and bonuses to equate to as much as half of net revenue; however, in 2009 this amount was down to around 40 percent of net revenue.

Employment declined by roughly 31,500, or just under 17 percent of, jobs in the New York City securities industry between November 2007 and August 2009. Between August and December 2009 the industry managed to add nearly 3,900 new jobs. In a previous study by the State Comptroller, it was found that for every securities industry job created, three other jobs are created elsewhere in the state of New York.

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