Compensation experts had said this important component of total wages earned by securities industry employees would plunge 30 percent to 40 percent.
However, the decline in bonuses as estimated by the New York City Independent Budget Office was nearly twice that forecast last week by the state comptroller, who had forecast a 13 percent shrinkage, to $121,150 per person.
Profits earned by Wall Street firms were estimated by the Independent Budget Office at $10.5 billion for 2011, a steep drop from $27.6 billion in 2010.
Last week, State Comptroller Thomas DiNapoli forecast that Wall Street's profits in 2011 would not top $13.5 billion.
Wall Street, which powers the economies of New York City and New York state, is expected to shed 4,300 jobs in 2012, while wages, including bonuses, will fall 7.5 percent, the Independent Budget Office said in a statement.
In contrast, the City Council Finance Committee, in a separate report issued on Monday, said that in 2011 the average wage earned by a securities industry worker should rise 1.6 percent to $369,000 a year.
Wall Street's profits and high compensation drive job creation in a host of other industries, from law firms to restaurants.
The forecast for a 2011 pay increase for Wall Street workers
looks slim when compared with the 17.6 percent gain seen in 2010 that the Finance Committee estimated.
The forecasts by the Finance Committee and the Independent Budget Office, which plays the same role for city that the Congressional Budget Office does for Congress, show ongoing struggles for the securities industry, which faces stiffer federal regulations and reduced trading volume.
Europe's debt problems also present a challenge for both Wall Street and the entire U.S. financial sector.
U.S. banks have about $80 billion of exposure to Spain, Italy, Portugal, Ireland and Greece, the Finance Committee said in a separate report issued on Monday.
"On a positive side, industry reports suggest Wall Street has been pricing in the possibility of a Greek default since early 2010," the Finance Committee report said.
The Independent Budget Office, the Finance Committee, and City Comptroller John Liu on Monday presented their analyses of Mayor Michael Bloomberg's $68.7 billion budget plan.
Tax revenue should surpass the mayor's forecast by $227 million in the fiscal year that ends on June 30, and by $380 million in the following year, the Finance Committee said.
New York City's economy, despite Wall Street's ongoing upheaval, has added back 64 percent of the 139,800 private sector jobs lost during the recession, according to the Finance Committee. However, the city's unemployment rate, after falling to 8.6 percent in April 2011, has risen since June and hit 9 percent in December.
The Independent Budget Office predicted the city would collect $230 million more tax revenue in the current fiscal year. But tougher regulations for Wall Street, which could clip the sector's profits, led the IBO to cut the forecast for tax revenue it made in December for 2013 by nearly $460 million. For fiscal 2014, it cut its estimate by $630 million.
Still, the comptroller predicted that curbs on proprietary trading could cause new companies to spring up as securities companies clamp down on this activity.
"It is our feeling that presumably, proprietary trading operations that are spun off by large financial firms will still operate and for the most part would stay in New York City," he said in a statement.
(Reporting by Joan Gralla; Editing by James Dalgleish, Dan Grebler and Bob Burgdorfer)
Photo: Satellite image by GeoEyeSatellite view of Iran's nuclear site.In the second such trip in less than a month, a senior team from the International Atomic Energy Agency (IAEA) had traveled to Tehran to press Iranian officials to start addressing mounting concerns that the Islamic Republic may be seeking to develop nuclear weapons.The outcome seems likely to add to already soaring tension between Iran and Western powers, which have ratcheted up sanctions on the major oil producer in recent months."During both the first and second round of discussions, the agency team requested access to the military site at Parchin. Iran did not grant permission for this visit to take place," the Vienna-based IAEA said in a statement after the Feb 20-21 talks.The IAEA named Parchin in a detailed report in November that lent independent weight to Western fears that Iran was working to develop an atomic bomb, an allegation Iranian officials reject."It is disappointing that Iran did not accept our request to visit Parchin. We engaged in a constructive spirit, but no agreement was reached," said IAEA Director General Yukiya Amano.Earlier, Iran's envoy to the IAEA, Ali Asghar Soltanieh, told the country's ISNA news agency that Tehran expected to hold more talks with the U.N. agency, whose task it is to prevent the spread of nuclear weapons in the world.But Amano's spokeswoman, Gill Tudor, made clear no further meetings were planned: "At this point in time there is no agreement on further discussions," she said.Iran rejects accusations that its nuclear program is a covert bid to develop a nuclear weapons capability, saying it is seeking to produce only electricity.But its refusal to curb sensitive atomic activities which can have both civilian and military purposes, and its track record of years of nuclear secrecy has drawn increasingly tough U.N. and separate U.S. and European punitive measures.The United States and Israel have not ruled out using force against Iran if they conclude diplomacy and sanctions will not stop it from developing a nuclear bomb.The five-member IAEA team led by Deputy Director General Herman Nackaerts was seeking answers from Iran about intelligence suggesting its declared civilian program is a facade for a weapons program.Still Time for Diplomacy?Last year's IAEA report suggesting Iran had pursued military nuclear technology helped precipitate the latest rounds of European Union and U.S. sanctions, which are causing economic hardship in Iran ahead of a parliamentary election in March.One key finding was information that Iran had built a large containment chamber at Parchin southeast of Tehran in which to conduct high-explosives tests, which the U.N. agency said were "strong indicators of possible weapon development".The IAEA said intensive efforts were made to reach agreement in the talks on a document "facilitating the clarification of unresolved issues" in connection with Iran's nuclear program, particularly those relating to possible military dimensions."Unfortunately, agreement was not reached on this document," it said in an unusually blunt statement.The IAEA mission's lack of progress may also have an impact on the chances of any resumption of wider nuclear negotiations between Iran and the six world powers, the five permanent members of the Security Council plus Germany.The West last week expressed some optimism at the prospect of new talks, particularly after Iran sent a letter to EU foreign policy chief Catherine Ashton promising to bring "new initiatives", without stating preconditions.But the United States and its allies may become more reluctant if they feel that the Islamic state is unlikely to engage in substantive discussions about its nuclear activities.The deputy head of Iran's armed forces was quoted on Tuesday as saying Iran would take pre-emptive action against its enemies if it felt its national interests were endangered."Our strategy now is that if we feel our enemies want to endanger Iran's national interests, and want to decide to do that, we will act without waiting for their actions," Mohammad Hejazi told the Fars news agency.In retaliation for oil sanctions, Iran, the world's fifth-largest crude exporter, has threatened to close the Strait of Hormuz, conduit for a third of the world's seaborne oil, while the United States signaled it would use force to keep it open.The White House said there was still time for diplomacy."Israel and the United States share the same objective, which is to prevent Iran from acquiring a nuclear weapon," White House spokesman Jay Carney said when asked about a weekend visit to Israel by National Security Advisor Tom Donilon."There is time and space for diplomacy to work, for the effect of sanctions to result in a change of Iranian behavior."Copyright 2012 Thomson Reuters. Click for restrictions.