Watch Wall Street Pay Swing Down From Stratosphere

Finance bigwigs' income to match doctors, lawyers
By Matt Cantor,  Newser User
Posted Feb 5, 2009 10:32 AM CST
Wall Street executives may be in for an era of 'more normal' pay, says an expert.   (AP Photo/Richard Drew)
camera-icon View 1 more image

(Newser) – President Obama’s $500,000 salary cap may herald a new era on Wall Street, in which pay for financial executives is aligned with doctors’ and lawyers’ compensation. Wall Street income is cyclical, it turns out, and a recent study found that it only surged—relative to that of peers in other industries—twice, first in the late 1920s and then from the mid-1990s to 2006, the New York Times reports.

In those boom years, the Wall Streeters raked in 30% to 50% more than their peers in other businesses. Now that the wheel has turned, the differential  “will go back to something more normal,” said one of the study’s authors. “The only reasonable number is zero or very close to zero.” That will likely mean fewer will look to the Street for careers. “I certainly don’t think it was a pure love of finance that drove people into the field,” notes an economist.