Wall Street bonuses up 17% in 2009

By Ben Rooney, staff reporter


NEW YORK (CNNMoney.com) -- New York State Comptroller Thomas DiNapoli said Tuesday that Wall Street bonuses jumped 17% last year, to an estimated $20.3 billion, as profits in the financial services sector rebounded.

The average taxable bonus for securities industry employees in New York rose to $123,850 in 2009 from $112,000 the year before, according to estimates from the comptroller.

At Goldman Sachs (GS, Fortune 500), Morgan Stanley (MS, Fortune 500), and JPMorgan Chase (JPM, Fortune 500) overall compensation increased by 31% in 2009. Average compensation rose by 27% to more than $340,000.

The rebound in bonus payments comes amid a sharp increase in Wall Street profits, which could reach an "unprecedented" $55 billion for 2009, DiNapoli said.

That would be nearly three times greater than the previous all-time record annual profit, but follows a $42.6 billion loss in 2008.

The bulk of the increase in profits came from broker-dealer operations, which brought in a record $49.9 billion through the first three quarters of 2009.

Despite the increase in compensation and profits, bonus payments remain below record levels of just a few years ago. In 2007, for example, bonuses totaled nearly $33 billion.

"It's still not back to historic levels," DiNapoli told reporters at a press conference in New York. "It's down by about 30% compared to the numbers in the bonus pool prior to the downturn and the great recession."

DiNapoli said the financial services industry is "vital" to New York's economy, but he acknowledged the massive bonuses are a "bitter pill" for most Americans.

"There's a lot of resentment against the industry over its role in the global economic meltdown," DiNapoli said in a statement. "Taxpayers bailed them out, and now they're back making money while many New York families are still struggling to make ends meet."

Wall Street firms received billions in government bailout funds in 2009 as the financial crisis crippled the industry and the economy sank into one of the worst recessions on record.

The report notes that most of the big financial firms have said that their top executives will receive stock options and other forms of deferred compensation for 2009 in lieu of cash bonuses. DiNapoli also pointed out that Wall Street lost over 30,000 jobs last year, though the industry added about 3,900 jobs in the final three months of 2009.

The estimates, based on tax collections reflecting cash bonuses and deferred compensation for which taxes have been prepaid, do not include bonuses paid by Wall Street firms to their employees outside of New York City. The figures do not include stock options that have not yet been realized or other forms of deferred compensation.

The report also said that the estimated bonus pool for 2010 is a third less than the amount paid two years ago, which was the previous most profitable year. DiNapoli noted that estimating the size of the bonus pool was made more difficult this year by unprecedented changes in compensation practices.

"We do have to acknowledge that there have been some changes in compensation," the Comptroller said. "Not all of it is cash and up front."

The rebound in bonus payments could be a boon for New York state, which is struggling to close a massive budget deficit.

On Tuesday, DiNapoli said lower tax collections, among other things, could cause New York's budget deficit to balloon to more than $2 billion this year.

"There's some good news from a revenue perspective for New York State's tax revenues," DiNapoli said. "But the other message is that Main Street has not benefited from this."

-- CNN Radio New York Correspondent Steve Kastenbaum contributed to this report. To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 17,156.85 24.88 0.15%
Nasdaq 4,562.19 9.43 0.21%
S&P 500 2,001.57 2.59 0.13%
Treasuries 2.60 0.01 0.42%
Data as of 8:07am ET
Company Price Change % Change
Bank of America Corp... 16.77 0.06 0.36%
Apple Inc 101.58 0.72 0.71%
Yahoo! Inc 42.59 -0.12 -0.28%
Microsoft Corp 46.52 -0.24 -0.51%
Alcoa Inc 16.28 0.12 0.74%
Data as of Sep 17

Sections

Alibaba founder Jack Ma could earn as much as $867 million from his company's market debut. More

The Federal Reserve is probably not going to raise interest rates until the summer of 2015 at the earliest. More

Frederick Hutson launched Pigeon.ly in 2012 to help inmates communicate with their friends and family. He's on target for $1 million in sales this year. More

Occupy Wall Street offshoot Strike Debt says it has abolished nearly $4 million in private student loan debt for students who attended Everest College, part of Corinthian Colleges. More

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.