Outrage Greets Wall Street Bonuses

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While the program restricted the size of bonuses for top-level employees, there was no such restriction for lower-level employees. "Taxpayers have invested billions of dollars to stabilize the nation's bank and financial institutions, and there are plans to make additional investments to shore up the banking system," DiNapoli said in news release. "There needs to be greater transparency and accountability in the use of these funds."

The report comes at a time when any report of Wall Street excess—whether it's the reported $1.2 million former Merrill Lynch CEO John Thain spent to redecorate his office last year or the $50 million business jet Citigroup (C) had on order until this week—is being used by critics as an example of unfettered greed that the financial collapse has done little to curtail.

Investigation Under Way

Thain resigned from Merrill acquirer Bank of America (BAC) on Jan. 22 following reports that Merrill paid billions dollars in bonuses late last year, even as Merrill was about to report a $15 billion fourth-quarter loss, and while Bank of America was seeking more federal funds because of the Merrill losses. New York's attorney general is probing the bonus payments, as well as executive compensation practices at firms that received federal funds.

Meanwhile, Thain has offered to reimburse Merrill for the renovation, but, in a memo to employees, defended the bonuses. "Those best people can get jobs other places, they will leave," he said, adding that on "Wall Street, people's salaries tend to be relatively small. And their bonuses are the vast majority of their compensation for the year."

DiNapoli's report noted that employment in the securities industry in New York City declined from 187,800 in October 2007 to 168,600 in December 2008, a 10.2% drop. The report estimated that traditional broker-dealer operations of member firms of the New York Stock Exchange lost more than $35 billion in 2008.

Mintz is news editor for BusinessWeek.com in New York.