Despite the surging stock market, New York officials estimate bonus payouts by Wall Street firms will shrink by at least 9% from last year — to about $25 billion, down from $27.5 billion, Axios' Courtenay Brown reports.
The smaller payouts reflect harder times for the banking industry, which is being hit by low interest rates, trade wars, political risk and volatile markets.
Why it matters: There's trickle-down effect for the tri-state economy. If you work at, say, Smith & Wollensky or a Connecticut Ferrari dealership, you could be in the same boat as the bankers.
The sums can be staggering. Some run to six or even seven figures, making up a third or more of an executive's annual compensation.
Another factor: More banks are opting for deferred forms of compensation, like stock instead of cash.
And banks have taken steps to curb excessive pay, industry experts say. That's despite the fact that regulations proposed after the financial crisis that aimed to curb big bonuses, which were seen as tempting workers to take risks, never crossed the finish line.
By the numbers: The average bonus paid to Wall Street employees in New York City was $153,700 in 2018 — a decline of 17% from the prior year, despite an upturn in the broader industry's profits. Fewer dollars were spread among a larger number of people.
Per New York City data, the average compensation for a Wall Streeter was more than $422,000 in 2017, the latest figures available. That's five times higher than what the average private-sector worker made.
Last year, bonuses alone were double the average salary of the rest of New York City's workforce.