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Wall Street average bonus fell 9% in '15, State Comptroller says

Monday, March 7, 2016 - 23:36

[NEW YORK] Wall Street's average bonusfell 9 per cent to US$146,200 in 2015, according to estimates by New York State Comptroller Thomas DiNapoli.

The bonus pool was US$25 billion, down 6 per cent as the industry added 4,500 jobs in New York City, DiNapoli said Monday in a statement. The bonuses shrank as profits from broker-dealer operations of the New York Stock Exchange member firms declined US$1.7 billion to US$14.3 billion.

"Wall Street bonuses and profits fell in 2015, reflecting a challenging year in the financial markets," DiNapoli said in the statement.

Profit at the six largest US banks rose to US$93 billion in 2015, more than double the 2009 level and a 36 per cent increase from a year earlier. Still, the industry has been slow to recover from the 2008 global financial crisis. A years-long slump in fixed-income trading revenue and rising litigation costs have forced many banks to cut jobs and reduce pay. The 24- company KBW Bank Index declined 10 per cent this year through Friday.

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Goldman Sachs Group Inc plans to eliminate more than 5 per cent of traders and salespeople in its fixed-income business, a person familiar with the matter told Bloomberg News last week. Bank of America Corp, which cut more than 10,000 jobs last year, will dismiss about 150 trading and investment-banking employees this week as part of the firm's periodic cull of low performers, people familiar with the matter told Bloomberg News last week.

Investment banks are also still dealing with the consequences of misconduct in the years leading up to the financial crisis. A group of 15 global investment banks will probably see higher legal expenses over the next two years after already setting aside a total of US$219 billion in costs between 2008 and 2014, according to a survey by Moody's Investor Service.

Wells Fargo & Co agreed last month to pay US$1.2 billion to resolve claims related to its Federal Housing Administration mortgage practices. Goldman Sachs in January agreed to settle a US probe into its handling of mortgage-backed securities for about US$5.1 billion, cutting fourth-quarter profit by roughly US$1.5 billion and closing out a year of record legal and litigation costs.

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