Top Managers Get $3.5K/Minute

Date: Monday, September 3, 2007
Author: Hedge Fund Daily

Top hedge fund and private managers make more in 10 minutes than the average U.S. worker earns in an entire year, according to a report by the Institute for Policy Studies and United For a Fair Economy. The report, Executive Excess 2007, using figures from Forbes magazine, calculates that the top 20 HF and PE pros average $657.5 million a year, which breaks down to $12.6 million a week, or $210,700 an hour for an average 60-hour work week. That means these managers get about $35,100 every 10 minutes (or $3,510 a minute), compared with the average worker in the U.S. whose annual salary is $29,500. Another way of looking at it, the highest paid managers make 22,255 times their poorer counterparts on the pay scale. What’s more, their pay was 3,315 times more than the top paid government officials, including the president of the U.S., who earns $400,000 a year. At the top of the fundies list was James Simons of Renaissance Technologies with $1.5 billion, and at No. 20, David Rubinstein of The Carlyle Group at $260 million. According to the study, the PE boom of the last year took already soaring salaries and propelled them “further into the economic stratosphere.” The report, which aims to bring attention to salary injustice and proposes measures to narrow the gap, had strong words for PE in particular: “These massive private equity take-homes have an enormous impact on inequality in the United States, at both ends of the economic ladder. Private equity managers, to extract such massive personal awards out of the companies that sit in their portfolios, typically make decisions – on matters ranging from job cuts to pensions – that place steady downward pressure on U.S. working standard.” Commenting on the report, John Gaine, president of the Managed Funds Association, explained to Bloomberg News that hedge fund compensation is “fee-based and directly attributable to a firm’s assets under management and performance.”