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Law360 (March 24, 2020, 4:40 PM EDT ) Wall Street bonuses are set to take a tumble this year as the securities industry reacts to the coronavirus pandemic, a New York state official warned Tuesday.
As the state grapples with the spread of COVID-19, the disease caused by the novel coronavirus, the securities industry is just one of the many sectors that will take a hit, with Wall Street bonuses expected to fall well below the average $164,100 that workers took home in 2019, according to a report released by the New York State Comptroller's office.
New York has been the state hardest hit by COVID-19 in the U.S., with the Centers for Disease Control and Prevention reporting 21,689 confirmed coronavirus cases as of Tuesday afternoon.
"The securities industry had a good year in 2019, but the serious damage that COVID-19 is inflicting on financial markets and the global economy will sharply reduce industry profits this year," New York State Comptroller Thomas P. DiNapoli said in a statement.
Accounting for 20% of private sector wages in New York City and directly or indirectly impacting one in 10 jobs in the city, the securities industry is a key part of the state's economy, meaning significant ripple effects in many other industries are imminent, DiNapoli said.
"The securities industry is integral to New York State's and New York City's economies as a source of tax revenue and job creator in other industries," he said. "The state and the city need to prepare for the severe budgetary implications of the coronavirus crisis."
Wall Street saw its bonus pool drop by 12% in 2018 but increase 3% in 2019 to reach $29.3 billion as the securities industry picked up 2,100 jobs that same year, on top of the 16,200 jobs added in the previous five years, according to the report.
Those numbers stood in stark contrast with the 33% drop in the bonus pool after the 9/11 terror attacks and 47% drop after the 2008 financial crisis, the report said.
Industries worldwide are grappling with how they will survive the economic fallout generated by the coronavirus, with businesses facing liquidity crises and industry groups elbowing to get tax provisions in the nearly $2 trillion COVID-19 bill that Congress is continuing to negotiate.
Negotiations in Congress have hit roadblocks at various times, with some tax provisions appearing in Senate Majority Leader Mitch McConnell's first draft only to be removed from later versions. Industry groups have remained engaged in the process in an attempt to shape the legislation's final form.
--Additional reporting by Joshua Rosenberg. Editing by Alanna Weissman.
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