Wall Street bonuses are expected to increase by 7.4% in 2024 as the banking industry recovers, according to one study. report published New York State Auditor Thomas DiNapoli said Wednesday.
The increase in bonuses is expected to be the first significant increase in the industry's bonus pool after being relatively flat from 2022 to 2023, at $33.7 billion and $33.8 billion, respectively, according to the Comptroller's Office report. It has become.
Bonus pools have soared during the pandemic, increasing 25% to $37.1 billion in 2020 and another 15% to $42.7 billion in 2021. The Comptroller's Office said it was driven by a wave of blank-check corporate deals fueled by stimulus checks and lower interest rates. the office told the Post.
The pool then plummeted 21% between 2021 and 2022, reaching a level more comparable to pre-pandemic levels.
Now, with Wall Street's higher profits in the first half of 2024, “bonuses are likely to recover next year and may even exceed budget forecasts,” the report says.
Nevertheless, 3,400 jobs could be lost due to annual performance reviews and corporate restructuring, the report said. The employment estimates are based on preliminary data and media reports of “small but significant” layoffs at major financial firms, the Comptroller's Office told the Post.
Employment in the securities industry will reach 198,500 in 2023, the highest level since 2000, according to the report.
The average annual salary on Wall Street fell 5.2% last year to $471,370.
The industry's recovery came on the back of rising stock prices and solid economic data, including last week's better-than-expected jobs report. Markets remain hot even after the US Federal Reserve (Fed) cut interest rates for the first time since 2020 in September.
According to the report, profits for companies listed on the New York Stock Exchange rose 79.3% to $23.2 billion in the first half of this year compared to the same period in 2023.
The Board of Audit has announced that it will release estimates of the total bonus amount for 2024 in March 2025.
Bonuses make up a significant portion of Wall Street compensation and are a major contributor to the tax base, so they have a significant impact on New York City and the state's economy.
According to the report, New York City has the most securities industry jobs in the nation. As of 2022, one in 11 jobs in the city will be related to the industry.
Because Wall Street firms occupy a significant portion of the city's office space, the industry pays large amounts of property taxes.
In fiscal year 2024, the securities industry contributed $5.1 billion to the city's budget in business and personal income taxes, according to the Comptroller's Office report.
In the state's 2023-2024 fiscal year, Wall Street contributed $19.4 billion to the state budget, according to the report.
Wall Street giants like JPMorgan Chase & Co. are set to begin their earnings season on Friday, potentially providing more insight into the health of the larger financial industry.
with post wire
