The good times are back on Wall Street. Last year, the average Wall Street salary rose 13% to its highest level since 2008, just before the financial crisis shattered the financial world.
According to a report from New York State Comptroller Thomas P. DiNapoli, annual pay excluding bonuses hit $422,500 on average last year.
Data from Bloomberg show that salaries on Wall Street hit the high as pre-tax profits in the banking industry jumped 42% to $24.5 billion last year. And it looks as if 2018 could be an even better year for Wall Street’s financiers. In the first half of 2018, Street earnings totaled $13.7 billion, up 11% year-on-year.
Wall Street is benefiting from the rest of the country’s economic growth. According to DiNapoli’s analysis, profit rose 21% in 2016 primarily due to lower costs. However, in 2017 higher revenues helped boost income. This trend has continued on into 2018. Net revenue increased by 4.5% in 2017, the largest increase in five years. Net revenue grew 8.6% in the first half of 2018.
Revenue growth was strongest in wealth management, underwriting, trading and other income related to the securities business according to the press release.
“Wall Street has profited every year since the end of the recession in 2009, and compensation last year reached its highest point since the financial crisis. The momentum from last year’s dramatic rise in profits has carried into 2018 and the industry is on track for another good year absent a setback later in the year,” DiNapoli said.
The average Wall Street bonus increased by 17% to $184,200 in 2017, which, after adjusting for inflation, is the highest average bonus in a decade and the fourth highest average bonus on record. Bonuses account for 40% of securities industry wages. Nearly one-quarter of the industry’s workforce in New York earned more than $250,000 in 2017.
According to initial estimates, bonuses for industry employees in the city are likely to increase in 2018 for the third consecutive year based on current banking profitability trends.
Other takeaways from DiNapoli’s report:
- The disparity between average salaries in the city’s securities industry and the rest of the private sector peaked in 2007, when it was six times higher. The gap narrowed after the financial crisis but has remained at least 5 to 1 since 2010, with a ratio of 5.5 to 1 in 2017.
- The average salary in the securities industry on Long Island is nearly as high as in New York City. On Long Island, the average salary grew by 10 percent in 2017 to $389,000. The level was boosted by the presence of hedge-fund firms in Suffolk County, where the average salary was $599,800, the highest of any county in the nation.
This originally appeared on ValueWalkPremium.com