Wall Street paid out 44 percent less in bonuses last year as securities companies laid off thousands of workers and stock prices plunged, New York state officials said on Wednesday.
"Cash bonuses paid by Wall Street firms to their New York city employees declined by 44 percent in 2008 in response to record losses suffered by the securities industry," the state comptroller's office said.
The stunning drop in the annual multi-billion dollar bonanaza for Wall Street high fliers reflected the collapse of a string of financial institutions.
Comptroller Thomas DiNapoli also noted that the government placed restrictions on bonuses for top executives in return for billions of dollars in emergency relief to companies, which "helped prevent more institutions failing."
Bonuses, which vary from around 100,000 dollars to multi-million dollar payments at the end of each year, are a vital source of tax funds for New York city and state.
Total taxes from Wall Street prior to the financial crisis, including taxes on bonuses, accounted for about 20 percent of state revenues and 12 percent of the city's revenues.
DiNapoli warned that "a 44 percent decline in the bonus pool will ripple through the regional economy and the state and the city will lose major tax revenues."
"The securities industry has already lost tens of thousands of jobs and the industry is still continuing to write off toxic assets. It's painfully obvious that 2009 will probably be another difficult year for the industry," he said.
Despite the alarming statistics, many Wall Street workers remain flush with cash in historical terms.
Total bonuses in the securities industry fell from 32.9 billion dollars to 18.4 billion dollars in 2008.
This represents the largest percentage drop in more than three decades. "But the size of the bonus pool is still the sixth largest on record," the comptroller's office said.
By any measure, though, 2008 was one of the worst years in Wall Street records.
Official statistics indicate that the securities industry shed 19,200 jobs to a total of 168,600 between October 2007 and December 2008.
Of the seven major financial firms headquartered in New York at the start of last year, one has failed, two have been converted into commercial banks and two have been acquired.
DiNapoli called for greater transparency in the use of federal bailout funds.
"Every dime counts, especially when they're taxpayer dimes and taxpayers ought to know if these funds were used to buy corporate jets, pay dividends or bonuses," he said.