Wall Street workers earned $28.5 billion in bonuses last year

The average Wall Street bonus last year rose 2% to $172,860 from a year earlier as the financial industry continues to adjust to an era of tighter regulation and moderating, though still relatively high, profits.

In a report Wednesday on Wall Street’s performance and pay, New York state Comptroller Thomas P. DiNapoli said legal settlements stemming from the 2008 financial crisis ate into the profitability of major Wall Street firms.

Even so, he said, “the securities industry remains profitable and well-compensated even as it adjusts to regulatory changes.”

In total, the bonus pool last year was $28.5 billion, up 3% from the year-earlier figure of $27.6 billion, which was spread over a slightly larger industry.

Public interest groups used the state comptroller’s report to draw attention to income and wealth disparities between the securities industry and average workers.

The Institute for Policy Studies, a left-leaning Washington research group, said last year’s bonus pool was more than twice the combined amount of $14 billion earned by the more than 1 million Americans working full-time at minimum wages.

Recent bonus totals were somewhat more modest than the huge sums paid before the financial crisis and the Great Recession. Frenzied trading concentrated in mortgage-related securities generated bonus pools of $34.3 billion in 2006 and $33 billion in 2007.

Still, last year’s bonuses offer insight into Wall Street’s continued money-making power.

The pool, for instance, was higher than the industry was able to generate in the very profitable pre-crisis years of 2003-2005 when total bonuses averaged $20 billion a year.

The 2014 pool also was far more than what Wall Street generated during the peak year of the tech bubble, 1999, when a boom in initial public offerings generated bonuses of about $19 billion, adjusted for inflation.

And last year’s pool was more than five times the inflation-adjusted $5.4-billion pool in 1987 when a much smaller but rising Wall Street was engaged in a leveraged buyout frenzy. That year, the average Wall Street bonus was an inflation-adjusted $32,000.

DiNapoli said that profitability on Wall Street was down slightly to $16 billion from $16.7 billion in 2013, but that employment in the securities industry managed a small gain of 2,300 jobs, a rise of 1.4%, to 167,800.

Overall securities industry employment is down almost 11% from the pre-crisis year of 2007 when it hit 188,300 jobs.

Twitter: @deanstarkman