Average estimated 2023 bonuses on Wall Street declined by 2% to $176,000, a function of continued market volatility and more people entering the workforce, Thomas P. DiNapoli, the New York state comptroller, said Tuesday.
The estimated average bonus in 2022 was $180,000. The record high was $240,400 in 2021.
The annual bonus calculations are based on estimates from the traditional bonus season, running from December through March, for securities industry employees who work in New York City. Employees outside New York City are excluded.
“While these bonuses affect income tax revenues for the state and city, both budgeted for larger declines, so the impact on projected revenues should be limited,” DiNapoli said in a release describing his office’s annual survey.
“The securities industry’s continued strength should not overshadow the broader economic picture in New York, where we need all sectors to enjoy full recovery from the pandemic,” he added.
Wall Street’s profits rose 1.8% last year, “but firms have taken a more cautious approach to compensation. And more employees have joined the securities industry, which accounts for the slight decline in the average bonus,” the release said.
DiNapoli’s report counts pretax profits for broker-dealer operations among New York Stock Exchange members but doesn’t adjust for inflation. Last year, estimated profits were $26.3 billion vs. $25.8 billion in 2022. The record was $58.4 billion in 2021, followed by $50.9 billion in 2020.
Wall Street employment rose to 198,500 last year from 191,600 in 2022, which was a record.
DiNapoli estimated that the securities industry accounted for about $28.8 billion in state tax revenue, or 27.4% of the state’s tax collections, for the state fiscal year that ended March 31, 2023; and $5.4 billion in city tax revenue, or 7% of total tax collections, for the city fiscal year that ended June 30, 2023.
The 2023 bonus estimate is based on personal income tax withholding trends and includes cash bonuses paid for work performed in 2023 and bonuses deferred from prior years that have been cashed in, the release said. The estimate excludes stock options or other forms of deferred compensation for which taxes have not been withheld.