Wall Street’s pandemic boom ends in 2022 with profits down over 50 percent from the same period last year, according to State Comptroller DiNapoli’s annual report on New York City’s securities industry. The industry profitability appears to be closer to the ten-year pre-pandemic average of $20.3 billion. The rest of the year may see further declines and challenging market conditions could continue. Bonuses are also expected to fall 22 percent or more from their record highs of 2021. Bonuses make up an estimated 47 percent of securities industry wages, a larger share than in any other major industry in New York City.
“The last two years of profits and bonuses fueled in part by the extraordinary federal response to the pandemic were not sustainable,” DiNapoli said. “The securities sector was a buffer for State and City revenues during the pandemic. As the sector slows down in 2022, leading firms are reviewing staffing and office space needs and a prolonged downturn could negatively impact State and City coffers. Continued support for other sectors that have been slow to recover is needed to speed recovery to their pre-pandemic levels and to help offset the decline in Wall Street-related tax revenues.”
In the first half of 2022, the securities industry decreased compensation expenses by 6.5 percent from the year prior. As market activity and profits have declined, the bonus pool is said to fall as well, according to a report by Johnson Associates, a compensation consulting firm, which suggests that bonuses at financial firms for 2022 could decrease by 10 percent to 15 percent overall.
Click here to watch the Comptroller DiNapoli’s Wall St. report video https://youtu.be/a6KL1zvbBYk