Wall Street cash bonuses declined by nearly eight percent to $20.8 billion in 2010, around one third less than paid out in 2007 before the financial crisis, according to a recent report. However, while cash bonuses declined, overall compensation has grown six percent in 2010.
The report, released by State Comptroller Tom DiNapoli, highlights the change in compensation practices on Wall Street. In place of cash bonuses, Wall Street is shifting towards deferred compensation, stock options, and higher base salaries.
“Cash bonuses are down, but that’s not an indicator of a weakness on Wall Street,” DiNapoli said. “Wall Street is changing its compensation practices in response to regulatory reforms adopted in the aftermath of the greatest financial meltdown since the Great Depression. Past practices rewarded short-term gains at the expense of long-term profitability.”
Office of the State Comptroller, NY