Wall Street bonuses fall as executive incomes rise

In 2010 bonuses on Wall Street averaged eight % less over the year prior. Wall Street bonuses dropped, yet profits grew. Salaries increased commensurate with profits to push executive compensation upward.

Would not it be nice to get a Wall Street bonus?

In the financial services industry last year, the Wall Street bonuses averaged $128,530. New York State Comptroller Thomas DiNapoli explained these figures. That is an eight percent drop from the year before in Wall Street from the $140,730 average. In 2010, the Total Wall Street bonuses totaled $20.8 billion which, from 2006 before the financial crisis, was $34.3 billion meaning a 33 % drop. In 2010, Wall Street profits were at $27.6 billion which is second to 2009 only when profits were at $55 billion due to government bailouts and record low rates of interest.

Making Wall Street bonuses look various

The decline in Wall Street bonuses for 2010 is not a signal of professional compensation in decrease. Because of the professional compensation during the financial crisis, the public got really upset which meant smaller bonuses were handed out. DiNapoli explained that Wall Street financial service compensation went up last year. It went up by 6 % total. Financial reform regulation, along with the controversial nature of obscene bonuses, has motivated big banks to change the way they pay employees. Base incomes are larger than bonuses now.

The next way to stay away from taxes

Some of the compensation is being deferred by Wall Street firms. This will make financial regulators think that short-term gain is exchanged for long-term profitability. Smaller sized bonuses make it easier for Wall Street firms to avoid taxes too. This brand new way of tax deterrence was found. About 20 percent of the tax revenue in New York before the financial crisis came from tax revenue from the financial sector, DiNapoli states. That number has fallen to 13 %. The tax revenue from Wall Street went down to 7 percent last year from 13 percent in NY City.

Articles cited

CNN Money

money.cnn.com/2011/02/24/news/economy/wall_street_bonus/index.htm

Wall Street Journal

blogs.wsj.com/metropolis/2011/02/24/wall-street-bonuses-dropped-in-2010/?mod=google_news_blog

NPR

npr.org/2011/02/24/134017725/wall-street-bonuses-fell-from-2009-level