This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Wall Street Profit, Bonuses to Decline

Stocks in this article: BAC C GS MS AIG

NEW YORK ( TheStreet) -- Wall Street profits are set to decline 69% this year, according to the New York State Comptroller, as the financial industry adjusts to the new regulatory environment and ongoing economic headwinds.

Big banks and securities firms are on pace to earn $19 billion in 2010, far below the $61.4 billion profit posted the previous year. Although 2010 will still be the fourth-most-profitable year on record, the comptroller's office said last year's groundbreaking results "are not likely to be repeated anytime soon."

>>>See Earlier Coverage: Big Bonuses Still Flow on Street

"Wall Street is adjusting to regulatory reforms and learning how to do business in the new financial reality," the comptroller, Thomas P. DiNapoli, said in a statement. "These actions may trim profits and cash bonuses in the near term, but they are necessary in order to encourage long-term stability and profitability. As long as other international financial centers play by similar rules, Wall Street should retain its leadership position."

Bonuses, too, are on the decline - both because of lay-offs and changes to compensation policies ithat began last year. In 2009, Wall Street paid out $20.3 billion in bonuses, representing 40% of revenue, vs. a typical payout of 50% in previous years.

This year, DiNapoli's office expects bonuses to decline by 28.5% to $14.5 billion, the largest decline in at least 30 years.

The change comes as big banks including Morgan Stanley (MS - Get Report), Goldman Sachs (GS - Get Report), Bank of America (BAC - Get Report), Citigroup (C - Get Report) and American International Group (AIG - Get Report) made significant changes to compensation incentives at the urging of the Obama administration's pay czar, Kenneth Feinberg.

More compensation has been moved into restricted stock units and non-cash awards, some with clawback provisions.

-- Written by Lauren Tara LaCapra in New York.

>To contact the writer of this article, click here: Lauren Tara LaCapra.

>To follow the writer on Twitter, go to

>To submit a news tip, send an email to:

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,387.21 -291.49 -1.65%
S&P 500 2,029.55 -27.54 -1.34%
NASDAQ 4,681.4970 -90.2660 -1.89%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs