The world’s top 25 hedge fund managers earned $13bn last year – more than the entire economies of Namibia, the Bahamas or Nicaragua.
Kenneth Griffin, founder and chief executive of Citadel, and James Simons, founder and chairman of Renaissance Technologies, shared the top spot, taking home $1.7bn each – equivalent to the annual salaries of 112,000 people taking home the US federal minimum wage of $15,080.
The earnings of the best-performing hedge fund managers, published by Institutional Investor’s Alpha magazine on Tuesday, dwarfs the pay of top Wall Street executives who have been under fire for their multimillion-dollar pay deals. The best paid banker last year was JPMorgan Chase CEO Jamie Dimon, who collected $27m.
“Earnings” for hedge fund managers is correct. “Pay” is not the right comparison.
Because they all have their own capital in their own funds. So, someone with a few $ billion, in a fund which makes 10%, makes a few hundred million. That’s not pay, that’s earnings on capital. It’s like saying that if Amazon stock rises $50 then Jeff Bezos is paid $2 billion. No, he’s not: he earns that, yes, but isn’t paid it.