Banker Bonuses Drop 26% on Wall Street As Deal-Making Cools

In 2022, steep declines in investment-banking fees resulting from fewer mergers, debt issues and public offerings, led to a 56 percent drop in pretax profit in aggregate on Wall Street. A year of rising interest rates, stubbornly high inflation and Russia’s war in Ukraine have curtailed financial activity of all kinds. The more recent collapse of Silicon Valley Bank, Signature Bank and the outbreak of fear about the health of the banking system could make 2023 an even leaner year for those working in high finance.

Many bankers have adjusted their spending accordingly, pulling back on everything from vacations to luxury cars. A select few high-performing hedge fund managers, however, have turned enormous profits during the turmoil, resulting in giant paydays.

Mr. DiNapoli, who is shepherding Manhattan’s economic recovery after the pandemic temporarily shuttered many of the city’s entertainment venues and has altered commuters’ habits, said the dent in industry profits had a limited effect on Manhattan’s financial stability.

“While lower bonuses affect income tax revenues for the state and city, our economic recovery does not depend solely on Wall Street,” Mr. DiNapoli said in a statement.

Still, Mr. DiNapoli estimated Wall Street was responsible for 16 percent of all economic activity in the city in 2021, making the industry “critically important to New York.”

Article source: https://www.nytimes.com/2023/03/30/business/banker-bonuses-fall.html