The average Wall Street bonus plummeted 26% last year as a slump in dealmaking and banks' efforts to contain costs weighed on compensation.
The industrywide bonus pool sank to $33.7 billion last year, down 21% from 2021, according to an analysis by New York State Comptroller Thomas DiNapoli.
That meant the typical bonus paid to employees in New York's securities industry fell to $176,700, the lowest since 2019.
"A 26% decline brings the average bonus closer to what financial employees received prior to the pandemic," DiNapoli said in a statement. "While lower bonuses affect income tax revenues for the state and city, our economic recovery does not depend solely on Wall Street. Employment in leisure and hospitality, retail, restaurants and construction must continue to improve for the city and state to fully recover."
The industrywide deal slump and subsequent hit to banker bonuses threatens New York City's already uncertain pandemic recovery, with rising interest rates quelling demand for real estate after remote-work arrangements already dented the commercial-property market.
The comptroller's estimate is based on trends in personal income-tax withholdings and includes cash bonuses for work in 2022 as well as bonuses deferred from prior years that have been cashed in. It does not take into account stock options or other types of deferred compensation.
This year's analysis stands in stark contrast to DiNapoli's report from just one year ago when Wall Street's biggest firms were locked in a vicious bidding war for talent, sending average bonuses to a record level.
The slump in compensation is bad news for legions of bankers and traders, whose annual bonuses can stretch into millions of dollars and are often multiples of their annual salary.
