Wall Street banks paid out $18.4 billion in bonuses for 2008 to New York City employees, a 44% dip from the $32.9 billion doled out in 2007, according to New York state comptroller Thomas Napoli. These bonuses, of course, were paid for by US taxpayers, whose TARP money helped keep the banks alive.
Napoli based his report on, “personal income tax collections and other factors, including industry revenue and expense trends.” While this dip is the largest ever in terms of dollar amount, this is still the 6th largest bonus pool in history.
Other fun facts from the report:
- The average bonus for 2008 was $112,000
- New York state loses $1 billion in tax revenue this year (from the puny bonuses)
- New York City, loses $750 million in tax revenue
- Employment in the securities industry in New York City declined from 187,800 in October 2007 to 168,600 in December 2008, a loss of 19,200 jobs, or 10.2 per cent.
- At the beginning of 2008, there were seven major financial firms headquartered in New York City. Since then, two have been acquired, one failed, and two converted into commercial banks.
Sure that 44% dip is big, but some people might be wondering why banks paid out any bonus money. Well, it’s absolutely necessary, because, John Thain says, if you don’t pay it, your employees will leave.
(Where will they go?)