Wall Street bonuses shrink, however executive payment climbs

An eight percent decrease last year Wall Street bonuses from what was paid out a year earlier was reported. Bonuses in the financial services industry went the opposite direction of profits, which continued to grow. Compensation for Wall Street workers actually grew in 2010, with a greater percentage paid in base salaries instead of bonuses.

Huge Wall Street bonuses

In the financial services industry last year, the Wall Street bonuses averaged $128,530. NY State Comptroller Thomas DiNapoli explained these figures. That is an 8 % drop from the year before in Wall Street from the $140,730 average. Last year, the Total Wall Street bonuses totaled $20.8 billion which, from 2006 before the financial crisis, was $34.3 billion meaning a 33 percent drop. In 2009, the Wall Street profits were at $55 billion because of the record low interest rates and government bailouts. Second comes 2010 with profits at $27.6 billion.

Deceptiveness behind Wall Street bonuses

Wall Street executives are still being compensated. This is despite the truth that bonuses have gone down in 2010. Due to the executive compensation during the financial crisis, the public got really upset which meant smaller sized bonuses were handed out. DiNapoli explained that Wall Street financial service payment went up in 2010. It went up by 6 % total. Pay for employees have been changed by large banks. This has been due to the controversy around the large bonuses along with the financial reform regulation. Base wages are larger than bonuses now.

A brand new way taxes are prevented

In order to make the public think that compensation is given in long-term profitability instead of short-term gain, Wall Street firms are deferring some of the payment. Scaled-down bonuses make it easier for Wall Street firms to stay away from taxes too. This new way of tax deterrence was found. DiNapoli explains that the New York state tax revenues had a huge part that came from the financial sector. About 20 % was what made it up before the financial crisis. The number has gone down now. It went to 13 %. NY City’s tax revenue from Wall Street declined from 13 percent before the crisis to 7 % in 2010.

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