As Bank Profits Plunge, Wall Street Bonuses Fall Modestly While Wall Street's profits were battered and beaten last year, workers" bonuses were merely bruised. The total payouts to finance industry employees in New York are forecast to drop only 14 percent during this bonus season, according to a report issued on Wednesday by the state comptroller, Thomas P. DiNapoli. By comparison, profits plunged, falling 51 percent. "The securities industry, which is a critical component of the economies of New York City and New York State, faces continued challenges as it works through the fallout from the financial crisis and adjusts to regulatory reforms," Mr. DiNapoli said in a statement Stymied by regulatory requirements, the European debt crisis and a sluggish economic environment at home, the nation's largest banks suffered in 2011. Goldman Sachs reported that profit dropped 67 percent from 2010. Bank of America earnings fell more than 50 percent. In all, securities firms in New York made an estimated $13.5 billion in 2011, down sharply from the $27.6 billion they made in 2010, according to the comptroller's estimates. It is the second consecutive year that Wall Street saw its profit chopped by more than half. Despite the difficult environment, New York firms continued to pay roughly $20 billion in year-end cash compensation to their employees. The average bonus was $121,150, down just 13 percent from the previous year as the headcount shrunk. In 2006, the year before the financial crisis, the average investment bank employee took home a bonus of $191,360. But the comptroller's estimates, which do not include noncash compensation, may not give the full picture of this year's bonus season. Increasingly, banks are doling out a larger portion of their annual payouts in shares, as a way to link pay to long-term performance. At Morgan Stanley, for instance, cash bonuses were capped at $125,000 - a small fortune to many Americans, but a pittance for investment bankers and traders used to seven-figure payouts. Some top executives at the bank, including James P. Gorman, the chief executive, deferred the entire cash portion of their bonuses. At the same time, overall compensation on Wall Street remains high relative to the rest of New York. In 2010, the average pay, including bonuses, in the securities industry in New York City hit $361,180. Figures were not yet available for 2011. At that level, Wall Street paychecks are 5.5 times higher than those in the rest of the private sector. Compensation has posed a dilemma at Wall Street firms. The issue has proved a lightning rod for politicians and critics who contend that the industry's pay packages are too high. But some banks defend their practices, arguing that compensation is critical to retaining and rewarding employees. Jamie Dimon, the chief executive of JPMorgan Chase, said at an investor conference on Tuesday that even in tough times, he would not pay his employees less than the going rate. "We are going to pay competitively," Mr. Dimon told a roomful of analysts and investors at the conference. We need top talent. You cannot run these businesses with second-rate talent. Even so, New York, which is heavily dependent on the securities industry, is likely to feel repercussions from Wall Street's somewhat muted compensation. Before the financial crisis, Wall Street accounted for 20 percent of the state's tax revenue. Last year, that tally was 14 percent. For New York City, the share dropped to 7 percent of tax revenues from 13 percent over the same period.