NEW YORK (Reuters) — Wall Street's bonuses fell nearly 25 per cent in 2011, a New York City fiscal watchdog estimated, a less severe drop than the industry had anticipated, though still likely to deal a blow to the economies of New York and the state.
Compensation experts had said this important component of total wages earned by securities industry employees would plunge 30 per cent to 40 per cent.
However, the decline in bonuses as estimated by the New York City Independent Budget Office was nearly twice that forecast last week by the state comptroller, who had forecast a 13 per cent shrinkage, to US$121,150 per person.
Profits earned by Wall Street firms were estimated by the Independent Budget Office at US$10.5 billion for 2011, a steep drop from US$27.6 billion in 2010.
Last week, State Comptroller Thomas DiNapoli forecast that Wall Street's profits in 2011 would not top US$13.5 billion.
Wall Street, which powers the economies of New York and New York state, is expected to shed 4,300 jobs in 2012, while wages, including bonuses, will fall 7.5 per cent, the Independent Budget Office said in a statement.
Wall Street's profits and high compensation drive job creation in a host of other industries, from law firms to restaurants.
© Copyright Canadian HR Reporter, HAB Press. All rights reserved.