Wall Street securities bonuses plunged 26% in 2022 after record 2021: DiNapoli

“Wall Street’s cash bonuses were expected to fall as several factors weighed on the securities’ industry profitability in 2022,” DiNapoli said in a statement. “A 26% decline brings the average bonus closer to what financial employees received prior to the pandemic. 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 comptroller’s 2022 estimates are based on personal income tax withholding trends, including cash bonuses for work done in 2022 and deferred bonuses that have been cashed in. However, it does not consider stock options or other forms of deferred compensation for which taxes have not been withheld.

In October, the annual New York City securities industry report highlighted that Wall Street earnings slid in the first half of 2022, signaling an end to the pandemic boom that saw record payouts.

This year’s analysis stands in sharp contrast with that DiNapoli’s report from the year before when Wall Street bankers took home an average bonus of $257,500 in 2021, up 20% from a record set a year earlier.

According to Bloomberg Intelligence, investment-banking fees across the five biggest Wall Street banks plunged 49% in 2022 as the war in Ukraine impacted the market and lowered corporate confidence — a reason DiNapoli mentions in his report.

In 2022, Wall Street’s pretax profits plummeted 56% from that of the previous year due to a decline in investment banking fees driven by interest rate hikes by the U.S. Federal Reserve, inflation and geopolitical turmoil resulting from the Russia-Ukraine war, the report noted.