Many Americans are struggling to stay on top of their finances as unemployment remains high and the economy stagnates, but one group experienced a healthy salary boost for the second year in a row.
Wall Street workers are on their way to a second consecutive 4% annual increase, according to The Wall Street Journal.
What the Data Shows
Wall Street firms, as a whole, is expected to pay $144 billion to employees in 2010, up from a record-breaking $139 billion a year earlier.
- Out of the 35 firms surveyed, 26 are expected to grow their payroll.
- Revenue is expected to rise at 29 of the 35 firms and the industry expects a 3% revenue boost to $488 billion from $433 billion.
- The percentage of revenue paid to employees, 32.1%, is below the 2007 level of 36%.
- Profits are higher than they were in the past two years, at $61.3 billion, but 20% lower than the 2006 record of $82 billion.
These numbers show that large firms have not been intimidated by Washington’s threats when deciding how much to pay employees. There additional oversight from the U.S. Treasury and watchdogs asked to monitor the pay structure on Wall Street has not made much of a dent in Wall Street’s pay practices.
According to the paper, Wall Street firms are paying employees more often with stock or deferred payment instruments than they had in the past. A lot of firms are also doing more to look out for their employees and the economy by minimizing their risk-taking — a requirement for firms accepting government aid throughout the financial crisis.
Most firms are eagerly waiting to hear which pay policies the Dodd-Frank Wall Street Reform and Consumer Protection will alter. The package of financial regulations, which was signed into law in June, has started making consumer-friendly changes, but has yet to enforce any specific regulations in terms of changing pay policies for big firms.