By David Weidner, MarketWatch
SAN FRANCISCO (MarketWatch) -- As Wall Street firms announce settlement after settlement, it only stands to reason that the result would be a direct squeeze on compensation and employment at those firms.
Well, logic might suggest a pinch, but this is Wall Street we're talking about.
Bonuses and compensation appear to be on track for another big year even though profits will take a hit from the aforementioned litigation, according to a reportreleased Tuesday by New York State Comptroller Thomas DiNapoli's office.
DiNapoli points out that the industry in New York has lost 7,300 jobs since 2011, but since the bottom of the financial crisis, it's added 9,600 jobs, for a net gain of 2,300. Also, the average industry salary of $360,700 is still below the 2007 peak, but it's still the second-highest on record and 5.2 times the average salary in the private sector. Wall Street provides the city 5% of its workforce and 22% of its wages.
DiNapoli expects the strong first-half 2013 profits of $10.1 billion to be halved in the remainder of the year as settlements at companies such as J.P. Morgan Chase & Co. (JPM) and Citigroup Inc. (C) take their toll on the bottom line. Read: Jamie Dimon: savior, opportunist, illusionist.
This doesn't necessarily mean the bonus pool -- last year's was $20 billion -- will shrink. Through the first half of the year compensation of New York Stock Exchange-member firms rose 5.5%, DiNapoli found. Even though profits will be slashed, the comptroller could only guess at the impact on pay, "trends suggested that bonuses might be higher in 2013," the report said. But recent developments have cast doubt on that outlook.
He concluded "is too early to predict the size of the 2013 bonus pool."
If he won't, we will. Wall Street may be having a tough year, but pay is usually the last thing to suffer.
-David Weidner; 415-439-6400; AskNewswires@dowjones.com
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(END) Dow Jones Newswires
10-22-13 1303ETCopyright (c) 2013 Dow Jones & Company, Inc.
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