NEW YORK (CBSNewYork) — The New York State Comptroller said he expects profits in the securities industry to go up and city income tax revenues to go down this year.
Thomas DiNapoli said the overall weak year on Wall Street will be felt throughout the city and state.
WCBS 880’s Rich Lamb reports
Profits in the securities industry are projected to grow in 2012, while employment and the cash bonus pool in New York City are expected to decline, according to an analysis from the comptroller’s office released Tuesday.
By year’s end, the securities industry is anticipated to earn $15 billion, according to the analysis from the comptroller’s office.
DiNapoli said the bump in profits is anticipated despite uncertainty over the European debt crisis and increased regulations. But the analysis indicated that revenues have declined on the year.
“We’re seeing firms decreasing employment. Part of the way to control costs and enhance profits is to drive down some of your personnel costs. While it’s too early for us to project on where the bonus pool will be at — we’ll project that a few months from now — our assumption at this point is it’s probably going to be smaller than last year,” DiNapoli told WCBS 880’s Rich Lamb.
Since the beginning of 2012 the industry has lost a net of 1,200 jobs, with a big drop in recent months, according to the comptroller’s office.
Last year, the average securities industries salary was $363,000, according to the comptroller’s office. That amount is approximately five times higher than the average salary in the private sector.
“In response to regulatory reform and a change in compensation that puts more on long-term profitability and sustainable profitability, you’re seeing compensation being less in terms of the cash bonuses than we saw in the past and more in terms of stock options, other kinds of deferred compensation,” DiNapoli told Lamb.
Bonuses being paid more in stock options than in cash translates to bad news for New York City income tax revenues, DiNapoli added.
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