Wall Street bonuses are expected to jump 7.4% in 2024 as the banking industry roars back to life, according to a report released Wednesday by New York State Comptroller Thomas DiNapoli.
The bonus hikes would be the first significant growth in the industry’s bonus pool after it stayed relatively flat between 2022 and 2023 — at $33.7 billion and $33.8 billion respectively, according to the Comptroller’s reports.
The bonus pool had spiked during the pandemic — up 25% to $37.1 billion in 2020 and up another 15% to $42.7 billion in 2021 — fueled by a tide of blank-check company deals that were helped by stimulus and lower interest rates, the Comptroller’s office told The Post.
Then the pool plunged 21% between 2021 and 2022, to levels more comparable with pre-pandemic levels.
Now, “bonuses are likely to bounce back in the coming year and may even exceed budget projections” due to an increase in Wall Street profits in the first half of 2024, the report said.
Nevertheless, annual performance reviews and company restructurings may lead to a decline of 3,400 jobs, the report said. This jobs estimate is based on preliminary data and media coverage of “small, but significant,” layoffs at major financial firms, the Comptroller’s office told The Post.
The securities industry reached 198,500 jobs in 2023 – its highest level since 2000, the report said.
Wall Street saw its average annual salary fall 5.2% last year to $471,370, the report added.
The industry rebound follows a stock rally and robust economic data, including a jobs report last week that blew past expectations. The markets have remained hot after the Federal Reserve slashed interest rates in September for the first time since 2020.
In the first half of the year, profits grew 79.3% to $23.2 billion for firms listed on the New York Stock Exchange compared to the same period in 2023, the report said.
The Comptroller’s office said it will release its estimate of the 2024 bonus pool in March 2025.
Bonuses represent a significant share of compensation on Wall Street, which greatly influences the economy of New York City and the state since it is a key contributor to the tax bases.
New York City is home to the largest amount of securities industry jobs in the nation, the report said. One in 11 jobs in the city was tied to the industry as of 2022.
Wall Street firms also take up a sizable chunk of office spaces in the city, so the industry pays a substantial amount in property taxes.
In fiscal year 2024, the securities industry contributed $5.1 billion in business and personal income taxes to the city’s budget, according to the Comptroller’s report.
In the state’s fiscal year 2023-2024, Wall Street contributed $19.4 billion to the state’s budget, the report said.
Major Wall Street firms like JPMorgan Chase are set to kick off the earnings season on Friday, which could offer more insight into the health of the larger financial industry.
With Post Wires
[Notigroup Newsroom in collaboration with other media outlets, with information from the following sources]
