Wall Street Cash Bonuses: How Low Can They Go?

March 7, 2012 - PRLog -- According to New York State’s comptroller, Wall Street cash bonuses dropped 14% in 2011.

Speaking to Reuters (http://www.reuters.com/article/2012/02/29/financial-wallstreet-bonuses-idUSL2E8DT1SE20120229), Comptroller Thomas DiNapoli said that the total amount of money paid out in bonuses should reach $19.7 billion in 2011. It’s amazing to think that a number so large could be considered a “decline.” But in an industry as massive as the financial sector, $20 billion is nothing compared to the hundreds of billions of dollars in annual revenue that these corporations collectively earn.

If the 14% decline seems marginal compared to the massive layoffs (http://streetid.com/newsblog/?p=816) that Wall Street has endured over the past 12 months, wait till you hear this: some industry experts were anticipating bonus reductions as high as 40%! That may have been the case at some major firms (http://streetid.com/newsblog/?p=894). But it clearly was not the case with all of them.

However, the average cash bonus is expected to fall by 13%, which means that the average recipient will only receive $121,150 in extra pay. That might sound like an awful lot of money. (Who here would just be happy with that as their annual salary? Anyone?) But to those who are used to getting that bonus, it is an important part of their overall income.

However, the average bonus is still higher than it was in 2008. At that time, Wall Street employees received an average of $101,000 in bonuses – $20,000 less than they are receiving now.

But things could have turned out even better last year. According to Reuters, Wall Street pulled in $12.6 billion in the first half of 2011. During the third quarter, however, financial firms in New York lost $3 billion.

The bad news may continue, unfortunately, as DiNapoli said that 10,000 more jobs could be lost by the end of 2012.

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