- The average Wall Street bonus was $172,860 in 2014, the New York State Comptroller reported Wednesday, an uptick of 2 percent.
- Meanwhile, profits fell slightly, from $16.7 billion to $16 billion.
- Financial crisis–related fallout is still dragging on big banks as they deal with new regulations and massive legal fees.
Bonuses are creeping back
Bonuses are inching back to where they were pre-crisis. In 2014, the average Wall Street bonus was $172,860, compared with an inflation-adjusted $222,000 in 2006. Still, the massive growth in those payouts leveled off last year. Bonus payouts grew by 19 percent in 2013 and by 28 percent in 2012. Last year, they only grew by 2 percent.
These statistics are for bonuses paid, not earned, in a particular year, so that $173,000 figure includes some money bankers earned in previous years but only collected in 2014. It doesn't include bonuses bankers earned in 2014 but won't receive until 2015 or later.
These are the highest bonuses have been since the crisis, but they're still well below the 2006 peak, when inflation-adjusted bonuses were at nearly $39.8 billion. Still, there's no denying these are huge payouts. As the Institute for Policy Studies found, the bonuses given out in 2014 — $28.5 billion worth — were twice the combined earnings of all full-time minimum-wage workers in the US.
There are nearly 168,000 workers in the New York City securities industry — around 20,000 fewer than in 2007. So while per-worker bonuses are down about 23 percent from the pre-crisis peak, the total money devoted to bonuses has fallen even further, by 29 percent. In 2014, Wall Street added workers for the first time since 2011, but the increase was small — just 2,300 jobs.
Profits are flat
A big reason bonuses have been slow to recover: banks are making a lot less money than they used to. Bank profits peaked at over $60 billion in 2009 (not adjusted for inflation). Last year, profits fell by 4.5 percent to $16 billion.
A few factors are still dragging down big banks' profits, a couple of them crisis-related: court cases related to big banks' misdeeds are weighing on balance sheets, not to mention new regulations on how much capital a bank has to hold in reserve.
"Industry profits were lower because of weakness in fixed income and commodities trading, higher capital reserve requirements, and the continued cost of legal settlements stemming from the financial crisis," said a press release on the numbers. However, Comptroller Thomas DiNapoli emphasized that Wall Street isn't exactly suffering, noting "the securities industry remains profitable and well-compensated even as it adjusts to regulatory changes."