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Street cash bonus falls 9%, says NY report
By Joan Gralla and Clare Baldwin |
February 25, 2011, Friday
|
Print Edition
Print Edition
WALL Street paid an average cash bonus of US$128,530 in 2010, down 9 percent from the previous year, as financial reforms prompted a shift toward more deferred compensation and higher base salaries, New York's state comptroller said in a yearly report on Wednesday.
Despite calls for restraint by federal regulators and politicians, overall compensation, which includes stock awards, grew by 6 percent in 2010, according to the report. In the first half of 2010, wages leaped 21.9 percent, partly due to cash bonuses that were awarded in 2009 but paid the following year.
Outrage over the federal government's bailout of banks and brokerages and fears that Wall Street's way of paying its employees encouraged too much risk-taking drove the companies into trying to spread these often-rich awards out over more years and pay more of them in stock.
"Past practices rewarded short-term gains at the expense of long-term profitability," New York State Comptroller Thomas DiNapoli said, adding that smaller cash bonuses should not be interpreted as a weaker Wall Street.
Still, the top five United States banks will pay staff a combined US$119 billion for 2010, according to bank consolidated income statements.
Among those banks, Goldman Sachs Group Inc paid the most, on average, at US$431,000.
Wall Street is the pillar of the economies of both New York State and New York City. But due to the financial crisis, Wall Street's contribution to the state's tax coffers has fallen to 13 percent from 20 percent previously. For New York City, the decline was to 7 percent from 13 percent.
Despite calls for restraint by federal regulators and politicians, overall compensation, which includes stock awards, grew by 6 percent in 2010, according to the report. In the first half of 2010, wages leaped 21.9 percent, partly due to cash bonuses that were awarded in 2009 but paid the following year.
Outrage over the federal government's bailout of banks and brokerages and fears that Wall Street's way of paying its employees encouraged too much risk-taking drove the companies into trying to spread these often-rich awards out over more years and pay more of them in stock.
"Past practices rewarded short-term gains at the expense of long-term profitability," New York State Comptroller Thomas DiNapoli said, adding that smaller cash bonuses should not be interpreted as a weaker Wall Street.
Still, the top five United States banks will pay staff a combined US$119 billion for 2010, according to bank consolidated income statements.
Among those banks, Goldman Sachs Group Inc paid the most, on average, at US$431,000.
Wall Street is the pillar of the economies of both New York State and New York City. But due to the financial crisis, Wall Street's contribution to the state's tax coffers has fallen to 13 percent from 20 percent previously. For New York City, the decline was to 7 percent from 13 percent.
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