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| Wall Street bonuses surge 17% in '09 |
| Press Trust of India / New York Feb 24, 2010, 16:39 IST |
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The bonuses doled out by Wall Street firms shot up 17 per cent in 2009, while entities such as Goldman Sachs and Morgan Stanley raised their overall compensation by 31 per cent during the same period.
The latest figures comes amid huge public outcry over the exorbitant compensation practices on the Wall Street, which also forced many companies to cut down on their bonuses.
"Wall Street bonuses paid to New York City securities industry employees rose by 17 per cent to $20.3 billion in 2009," according to estimates released by the New York State Comptroller Thomas P DiNapoli yesterday.
In a statement, DiNapoli noted that the overall payouts at Goldman Sachs, Morgan Stanley, and JPMorgan Chase Investment Bank, increased by 31 per cent last year. Average compensation climbed 27 per cent to more than $340,000.
The surge in bonuses is mainly on account of robust financial performance by many Wall Street firms in 2009.
"Total compensation at the largest securities firms grew even faster and industry profits could exceed an unprecedented $55 billion in 2009... In 2008, the industry lost a record $42.6 billion," the statement said.
Most of the big financial firms have decided to do away with cash bonuses for their top executives in 2009. They would get stock options and other forms of deferred compensation.
"For most Americans, these huge bonuses are a bitter pill and hard to comprehend. Taxpayers bailed them out, now they're back making money while many New York families are still struggling to make ends meet," DiNapoli said.
Further, DiNapoli noted that tying compensation to long-term sustainable profits is a step in the right direction.
The estimates are based on tax collections and reflects cash bonus payments and deferred compensation for which taxes have been prepaid. The figures does not include stock options that have not yet been realised or other forms of deferred compensation.
Bonuses paid by New York City-based firms to their employees outside the city are not included.
Meanwhile, the Comptroller said that employment in the securities industry in New York City declined by 31,500 jobs between November 2007 and August 2009.
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