Cash bonuses paid to New York City securities industry employees declined by nearly 8 percent to $20.8 billion in 2010, as Wall Street firms shifted toward more deferred compensation and higher base salaries, according to an estimate released by New York State Comptroller Thomas P. DiNapoli.

For the average Wall Street worker, however, that still translated into a 2010 cash bonus of $128,530, according to DiNapoli’s estimate.   And although cash bonuses were down, it's estimated that total compensation on Wall Street rose 6 percent last year, DiNapoli said.

“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.”

Profits of the broker/dealer operations of New York Stock Exchange member firms, the traditional measure of Wall Street profitability, totaled $27.6 billion in 2010, “making 2010 the second most profitable year on record after the $61.4 billion record set in 2009, which was fueled by federal bailouts, low interest rates, and proprietary trading,” according to DiNapoli.

DiNapoli’s office annually releases its estimate of bonuses paid to securities industry employees who work in New York City.  Bonuses paid by New York City-based firms to their employees outside of the City (whether in domestic or international locations) are not included.  DiNapoli’s office said the estimate is based on tax collections and reflects cash bonus payments and deferred compensation for which taxes have been prepaid. The estimate does not include stock options that have not yet been realized or other forms of deferred compensation.

The securities industry in New York City added 3,600 jobs between August 2010 and December 2010, according to DiNapoli, and trends in unemployment insurance data suggest job gains may have been even stronger during this period.  The securities industry in New York City lost 30,700 jobs during the recession, a decline of 16 percent, or 3.5 times the rate of total job loss in New York City, according to the state comptroller’s data.

An audio file of Comptroller DiNapoli's press briefing on this report is available here.