“The spillover effect from the wholesale writing of bad loans is that communities are
torn apart … As one house after another in a neighborhood goes vacant, squatters move in,
crime and the likelihood of fires spike, local stores and businesses close.”
UNITED FOR A FAIR ECONOMY
THE FUNER E FUNER
Among the other findings
in DiNapoli’s report:
; In a departure from past practice,
many of the largest financial firms
have reported that their top execu-
tives will not receive any cash
bonuses in 2009 but will receive
stock options and other forms of
deferred compensation
; The industry devoted a much
lower share of net revenue to
compensation in 2009 compared
with the period before the finan-
cial crisis. Historically, industry
compensation (salaries and
bonuses) has averaged about half
of net revenue, but compensation
declined to about 40 percent of
net revenue in 2009
; Wall Street accounted for 24
percent of the wages paid to
workers in New York City in 2008
even though it accounted for only
5 percent of the jobs
Moreover, employment in New
York City’s financial-service sector
bottomed out last summer after los-
ing 31,500 jobs, a decline of nearly
17 percent, during the crisis. In the
last five months of 2009, the industry
added 3,900 jobs.
“We cannot see a repeat of
the risky behavior that crippled our
economy,” DiNapoli said.
He continued, “Tying compensation to long-term sustainable profits
is a step in the right direction. We
also need the right level of regulatory protections to make sure the
securities industry thrives without
driving the rest of us out on a fragile
economic limb.”;;;
Although Wall Street’s bonus pool
is larger than in 2008, it is still down
significantly from 2006 and 2007,
according to figures provided by the
state comptroller’s office charting Wall
Street bonuses paid from 1985 to
2009. Taxpayers in 2009 rescued the
U.S. banking industry with hundreds of
billions of dollars in bailouts, putting
into sharp focus pay practices on Wall
Street banks.
