Pyrrhic Schadenfreude on Wall Street

It's not much solace but taxpayers disgusted with Wall Street can take a tiny bit of satisfaction in new figures documenting the precipitous fall last year in cash bonuses for Wall Street workers.

Annual bonuses plunged 44 percent last year as the securities industry chalked up major losses, according to a new report from the New York state comptroller's office.

Overall, bonuses fell from $32.9 billion in 2007 to $18.4 billion last year, which New York comptroller Thomas DiNapoli said was the biggest drop ever and the largest percentage drop in three decades.

The average bonus fell 36.7 percent, to $112,000 last year. Of course, there were fewer souls to share in the bonuses since some 19,200 people, or about 10 percent of the Wall Street workforce was axed.

Some executives have been denied--or declined, in a few cases--big cash bonuses, but the annual cash awards make up a big chunk of compensation for many Wall Street workers. DiNapoli's office noted, in a press release, that federal asset relief limited what executives could receive bonus-wise, not lower-level employees.

The comptroller's report noted that in 2008, New York Stock Exchange member firms lost more than $35 billion--which is three times as much as 2007.

DiNapoli's report was based on personal income tax data. The lower bonuses mean state tax revenues are likely to fall by almost $1 billion and city revenues by some $275 million at a time when New York State is facing a $15 billion plus deficit.

by Elizabeth Olson