NEW YORK CITY, New York: This week, New York State's comptroller Thomas DiNapoli said that as the industry added employees and took a "more cautious approach" to compensation, the average Wall Street bonus fell slightly to US$176,500 in 2023.

The average bonus for employees in New York City's securities industry was also down two percent from $180,000 in 2022.

According to DiNapoli, the slight decline came even as Wall Street profits rose 1.8 percent in 2023.

He told reporters during an online briefing that "Firms have taken a more cautious approach to compensation, and more employees have joined the securities industry, which accounts for the slight decline in the average bonus."

"The bonus pool of $33.8 billion was largely unchanged from the previous year but spread out over more employees. Last year, the industry employed 198,500 people in New York City, up from 191,600 in 2022," he added.

Although it declined, the average Wall Street bonus for 2023 was still considerably higher than the average annual pay of U.S. workers, which was just under $70,000 last autumn, according to federal data.

Alan Johnson, a compensation expert for the financial services industry, said that Wall Street bonuses can exceed an employee's base salary and are heavily driven by individual performance.

"People work very hard. So, some of it is, in effect, combat pay for very long hours and a lot of stress. And there is a lot of volatility in pay. And the other thing is, careers often don't last that long," Johnson said.

DiNapoli said that Wall Street is a major source of state and city tax revenue, accounting for some 27 percent of the state's tax collections and seven percent of collections for New York City.

While the bonuses affect income tax revenues for the state and city, both budgeted for larger declines, so the impact on projected revenues should be limited, he added.

"We need New York to continue to be the global capital for finance because we all benefit from Wall Street when it is profitable. And when these bonuses are paid, and obviously the salaries are high and the bonuses are high, and these folks spend money, that also obviously drives local economic activity as well," DiNapoli stated.