Wall Street bonuses climbed 20% in 2021

The average Wall Street bonus increased 20% last year as a flurry of initial public offerings and record underwriting fees boosted profitability.

The typical bonus paid to employees in New York’s securities industry climbed to $257,500, according to an analysis by New York State Comptroller Thomas DiNapoli. That was more than the state’s projections, which should help the city exceed its expected revenue from income taxes.

“Wall Street’s soaring profits continued to beat expectations in 2021 and drove record bonuses,” DiNapoli said in a statement Wednesday. “But recent events are likely to drive near-term profitability and bonuses lower. Markets are turbulent as other sectors’ recovery remains sluggish and uneven, and Russia wages an inexcusable war on Ukraine’s freedom.”

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The industry’s bonus pool swelled to $45 billion last year, up 21% from 2020. The comptroller’s estimate is based on trends in personal income-tax withholdings and includes cash bonuses for the current year 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.

Wall Street continued to cut jobs last year, with total employment dropping to 180,000 jobs in 2021. New York’s share of the securities industry also slipped to 18% — down from 33% three decades ago — as banks continue to move positions to other parts of the country and permitted more employees to work from home.

In New York City, the securities industry provides about one-fifth of private-sector wages despite accounting for just 5% of that sector’s employment. Still, one in nine jobs are directly or indirectly tied to the industry, according to DiNapoli.