Dive Brief:

• Last year’s Wall Street salaries slid again, according to the New York state comptroller’s annual securities industry report, reflecting a more muted dealmaking environment.
• The 2023 average salary for New York City’s securities employees dropped 5.2% from the prior year, to $471,370. That figure – the third highest on record – was down 8.7% when adjusted for inflation. The comptroller’s office attributed the decline to smaller bonuses, which were $176,500 on average, given that profits have tumbled from COVID-19 pandemic-era peaks.
• However, as dealmaking has picked up, Wall Street firms upped compensation costs by 9.8% in the first half of the year, according to the report, released Wednesday. And the comptroller predicts the overall bonus pool – which comprised 37% of industry wages in 2023 – will jump 7.4% this year.

Dive Insight:

In the first half of the year, Wall Street got a boost from increased trading, underwriting and selling and recorded a 79.3% jump year-over-year in pre-tax profits, to $23.2 billion, the comptroller’s office said. If that growth rate continues, 2024’s total could exceed $47 billion, the report said.

That would be a welcome increase after the industry recorded $26.3 billion in annual profits for 2023. That figure came in higher than 2022’s $25.8 billion, but was dwarfed by 2020’s $50.9 billion and 2021’s $58.4 billion, when interest rates were low and federal stimulus meant the economy was flush with cash.

“After record years during the pandemic, Wall Street’s profits were more in line with pre-pandemic levels in 2022 and 2023,” New York State Comptroller Thomas P. DiNapoli said in a Wednesday news release. “This year has been very strong so far and profits may continue their upward trajectory, to exceed 2023 levels and boost state and city tax revenues. Still, there are many international and domestic uncertainties that pose risks to the industry in the final months of 2024 that my office will be monitoring closely.”

Most revenue lines in 2024’s first half were up year-over-year: Supervisory fees rose $5.6 billion, securities trading climbed $5.2 billion and underwriting grew $4.2 billion, the release said. Higher compensation – which was up $4.5 billion – caused expenses to rise, although revenue “overshadowed those increases,” the comptroller’s office said.

Last year, New York counted 214,900 jobs in the securities industry, more than twice as many as California, its closest rival. But New York has been losing jobs to other states “for decades,” and industry employment has grown faster in states such as Texas and Utah, the comptroller’s office noted. This year, New York accounts for 174% of the country’s securities industry employees. 

Although New York’s securities industry tallied 198,500 jobs in 2023 – the highest level since 2000 – this year’s preliminary data reveals a drop of 3,400 jobs, based on year-to-date data through August, the comptroller’s office said.