Wall Street cash bonuses decline to $20.8 bn in 2010

NEW YORK: Wall Street entities shelled out less cash bonuses than previous years at $20.8 billion in 2010, reflecting the gradual shift towards deferred pay practices and higher base salaries.

The latest figures from the New York State Comptroller Thomas P DiNapoli showed that Wall Street cash bonuses last year was lower by about 9 per cent as compared to $22.5 billion awarded in 2009.

In the wake of the global financial meltdown, the pay practices of Wall Street companies had come under fire.

Huge executive payouts that led to excessive risk taking ways was partly blamed for the unprecedented crisis in 2008-09.

According to DiNapoli, the amount of cash bonuses paid in 2010 is about "one-third less than paid out in 2007 before the financial crisis".

Average cash bonuses fell 9 per cent to $128,530 in 2010. In the year-ago period, the same stood at $140,730.

"The decline in the cash bonus pool reflects changes adopted by the industry in response to regulatory reforms, such as a shift towards deferred compensation and higher base salaries," he said in a statement yesterday.

These figures are an estimate of bonuses paid to securities industry employees who work in New York City. It does not include stock options that have not been realised or other forms of deferred compensation.

"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," DiNapoli noted.

Last year, Wall Street profits touched $27.6 billion.