Wall Street bonuses plunge 22% in this year’s fiscal year

© Stocksak. FILE PHOTO – A Wall Street sign can be seen near the New York Stock Exchange (NYSE), in New York City, U.S.A, September 17, 2019. REUTERS/Brendan McDermid

By Lananh Nguyen, Niket Nishant

NEW YORK, Stocksak – Wall Street bonuses for 2022 are expected fall 22% or higher from last year’s bumper payouts. This is because of tough economic conditions that have slowed the demand for deals.

The economic outlook has been affected by rising interest rates, inflation, and the war in Ukraine. Wall Street saw an increase in investment banking fees as a result of the dwindling supply of markets for mergers and acquisitions, as well as initial public offerings.

The pessimistic outlook contrasts well with the bonanza that bankers received last year. In a statement Tuesday, DiNapoli stated that the average compensation for New York City’s securities industry workers rose to $516 560 per year in 2021, from $438 450 in 2020. This was more than five-times the average salary for private sector workers and included average bonuses last year of $257,000.

DiNapoli stated that the last two years of profits, bonuses, and a federal response to the pandemic, were not sustainable. “As the sector slows down by 2022, leading firms will be reviewing their staffing needs and office space requirements. This could adversely impact the state and city coffers.”

The year ahead will bring better times for financiers. DiNapoli stated that Wall Street firms have set aside 6.5% less compensation for the first half 2022 because pretax profits were halved to $13.5 million. Pretax earnings are down 56% compared to $31 billion in the same time last year.

As the economy rebounded from the pandemic, 2021 saw the industry give its employees the largest bonuses since 2006.

Wall Street workers are still an important part of New York City’s economic activity, accounting for 16%. One in 11 jobs in 2020 were linked to the securities sector, though this had dropped from one in nine in 2019. This drop was likely due to fewer workers reporting for work, which means fewer customers for restaurants and stores.

For a total of 181,600 employees, 1,600 new jobs were added by the securities industry in September. The financial sector saw employment decline by 1.9% between 2020-2021, compared to a 9.8% decline for the wider private sector. According to their third quarter earnings reports, some major U.S. bank have increased staff this year, despite the dimming economic outlook.

It was a “surprise” to see that banks were adding a few jobs in recent months, DiNapoli told reporters on a conference call. “We can see that trend going in the opposite direction, but it’s too soon to tell right now.”

In March, the comptroller will release its annual report on Wall Street bonuses for 2022.

News Source and Credit

Stocksak Editorial

We are a financial blog that covers topics such as investing, saving, spending, and earning more money. Please feel free to peruse our site and read any of the articles that catch your interest.

Related Articles

Leave a Reply

Your email address will not be published.

Back to top button