Wall Street Bonuses: Behind The Numbers

By now I’m sure you’ve all heard about the $18.4 billion worth of bonuses that Wall Street firms paid out to employees in 2008. Here are a few facts about that $18.4 billion—and Wall Street bonuses in general—that you may not know:

• The $18.4 billion bonus pool was spread out across all Wall Street employees; it didn’t just go to top executives (if that’s any consolation), some of whom wisely forfeited their bonuses for the year, according to the New York State Comptroller’s Office, which broke the news about Wall Street bonuses on January 28.
• A total of 165,000 employees benefitted from the bonus money, according to the Comptroller’s Office.
• The $18.4 billion covers only Wall Street’s securities industry, according to the Comptroller’s Office, and thus is spread out across seven different firms (two of which have been acquired, one of which failed, and two converted into commercial banks since the beginning of 2008.)
• If you take the average, each firm allocated roughly $2.6 billion for bonuses, though Merrill Lynch reportedly paid out $4 billion in bonuses to employees before Bank of America took it over.
• Goldman Sachs disclosed last month that its 2008 compensation costs, which include employee salaries, bonuses, payroll taxes and benefits, totaled $10.93 billion, according to ABC News. If Goldman Sachs devoted $2.6 billion toward bonuses, the bonus money would be roughly 25 percent of its total compensation costs.
• The average bonus across all Wall Street firms in 2008 was $112,000, a nearly 37 percent decline from 2007. (Compare that $112,000 to the average annual cash bonus paid out to salaried employees at companies on Fortune magazine’s 2007 Best Places to Work list.)
• Bonuses account for about half of all compensation in the securities industry, according to a report issued by the New York State Comptroller’s Office. The average salary for a Wall Street securities industry employee nearly topped $400,000 in 2007.