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Happy Days Here Again? Street Bonuses Seen Up in 2012

Daniel Grill | Getty Images

Wall Street cash bonuses are forecast to have risen in 2012 to their highest since 2010, but still be below pre-crisis levels, New York state's comptroller said on Tuesday.

The securities industry's bonus pool was expected to total $20 billion, Comptroller Thomas DiNapoli said, up 8 percent from 2011, but below levels seen in 2006 and 2007, before the financial crisis.

The Comptroller's estimate is based on personal income tax trends. It reflects cash bonuses and deferred pay for which taxes have been withheld. The estimate does not include stock options or other forms of deferred compensation.

The increase was motivated at least in part by tax strategies, as employers moved certain payments due to high-income individuals to 2013 that were initially scheduled for 2012 to help them take advantage of 2012's lower tax rates.

The report also noted that the job growth seen is coming from industries other than securities, as Wall Street has not regained the job growth that it lost during the financial crisis.

In 2011, Wall Street bonuses fell to their lowest in three years as volatile trading and stiffer regulations took a toll on profits. The overall bonus pool was down 13.5 percent from 2010 and the average cash bonus was $121,150, according to DiNapoli's report for that year.

The last time the bonus pool shrank for two years in a row was in 2007 and 2008 at the start of the financial crisis, the Comptroller's office said.

Wall Street is an important source of tax revenue for New York. About 14 percent of New York State tax revenues came from Wall Street in 2011, down from 20 percent before the financial crisis, while the industry's contribution to New York City's tax take fell from 13 percent to less than 7 percent.

The Comptroller's estimate is based on personal income tax trends. It reflects cash bonuses and deferred pay for which taxes have been withheld. The estimate does not include stock options or other forms of deferred compensation.

CNBC's Kate Kelly contributed to this report.

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