M&A revival and surge in trading revenues drive Wall Street bonus pool to a record $49.2 billion in 2025.

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Wall Street's bonus pool in 2025 has set a new record, reflecting the strong profitability of the financial industry amid a rebound in mergers and acquisitions and a surge in trading income. However, slower job growth and geopolitical risks are casting a shadow over the industry's outlook.

Estimates released by New York State Comptroller Thomas DiNapoli on Thursday show that the total bonus pool on Wall Street in 2025 has risen to $49.2 billion, the highest level since records began in 1987, marking the second consecutive year of a historic record. The average annual bonus for securities industry employees increased by 6% compared to last year, reaching $246,900.

DiNapoli attributed this growth to the strong rebound in mergers and acquisitions activity brought about by relaxed regulations under the Trump administration, as well as continued strength in trading and underwriting businesses. He also warned that spillover risks from geopolitical conflicts and slower job growth would pose "extraordinary challenges" to the short- and long-term prospects of the financial industry.

Merger Recovery and Trading Income Drive Record Bonuses

The historic breakthrough in Wall Street’s 2025 bonus pool is based on substantial improvement in the industry’s overall performance. Last year, the banking sector posted a record $134 billion in trading income, and the merger market saw a significant revival driven by a relaxed regulatory environment, directly supporting the expansion of the bonus pool.

DiNapoli stated in the release, "Despite ongoing domestic and international turbulence, Wall Street performed strongly for most of last year." Looking forward to 2026, executives at several major banks have anticipated that this momentum would continue, but the Iran war and geopolitical tensions have already impacted the U.S. market, pushing inflation pressure higher and leading to a more complex outlook.

It is worth noting that the above bonus figures are based on estimates from personal income tax withholding and include cash payments and deferred compensation that has already been taxed, but do not include stock options or other deferred compensation forms that have not yet triggered tax obligations.

Bonus Income Makes Significant Contribution to New York’s Finances, But May Fall Short of Expectations

Wall Street’s sizable bonuses play an important role in the finances of New York State and New York City. DiNapoli estimates that 2025 bonuses will bring in $199 million more personal income tax revenue for New York State than in 2024, and contribute an additional $91 million for New York City. Between fiscal years 2024 and 2025, Wall Street accounted for about 19% of New York State’s total tax revenue.

However, the budget proposal put forward by New York Governor Kathy Hochul assumes that bonuses in the financial and insurance industries will grow by 26% in this fiscal year. DiNapoli is cautious about this, believing that actual tax revenue may be difficult to reach that level.

Employment Landscape Quietly Shifts, Shrinking Number of Securities Industry Employees in New York

Despite record bonus levels, Wall Street's position in the national securities industry employment landscape continues to weaken. According to preliminary data, the number of securities industry employees in New York dropped to 198,200, lower than the 2024 high of 201,500—a 30-year peak—and marking the lowest in nearly three years. DiNapoli said that after annual data revisions, this number is expected to be slightly higher, indicating mild growth.

New York’s share of national securities industry employment has fallen to 18%, far below the roughly one-third level seen in 1990, but still remains the highest among all states. Meanwhile, employment growth in the securities industry is noticeably faster in other regions across the country.

JPMorgan Chase CEO Jamie Dimon said Tuesday that when he joined the bank about 20 years ago, the Manhattan staff count was 35,000, now down to 26,000; meanwhile, staff in Texas grew from 11,000 to 33,000. Dimon attributed the decrease in New York staff partly to higher personal, estate, and corporate tax rates, as well as "anti-business sentiment."

Political Changes Trigger Business Community Caution

Changes in New York City's political landscape are intensifying uncertainty in the business community. Zohran Mamdani, who took office as Mayor this January, centered his campaign on reducing the cost of living for the working class and proposed tax increases on businesses and wealthy groups, causing strong backlash from some Wall Street figures.

According to Bloomberg, billionaire Bill Ackman publicly expressed concerns this June, saying that after former Governor Andrew Cuomo conceded to Mamdani in the Democratic mayoral primary, businesses and wealthy residents might leave New York City in large numbers.

Dimon joked that JPMorgan's new headquarters building in Manhattan was already under construction five years before Mamdani took office.

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