Not quite Guardian, not quite

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.

3 thoughts on “Not quite Guardian, not quite”

  1. Why so harsh on the poor Guadrian writer?

    This wage-slave, doomed to live off of the gruel afforded by the limited tokens its masters grant, can only dream of what it is like to live in the mansion. The economic horizon of this soul in purgatory is limited to that which they can grab as the plantation house burns to the ground. Who among us can be expected to produce great works like Picasso when we do not see the same rewards as he?

    Any who can not see this basic truth are simply not multi-cultural enough.

  2. Bloke in Costa Rica

    “more than the entire economies of Namibia, the Bahamas or Nicaragua”

    So fucking what? One of those is a tiny Caribbean island and the other two are Third World shitholes that make the square root of fuck all. The main export of Nicaragua to Costa Rica is Nicaraguans, because the average Tico makes in a fortnight what the average Pinolero makes in a year (my multiple is embarrassingly higher than that). Until you’ve been there you have absolutely no idea how shitty, cracked and worn out a country can be. There’s no fear of imminent starvation like in Venezuela, but almost everyone is poor at a level where the word still has some meaning. Last time I was there I went for four days and dropped a grand total of $240 (for two of us) for accommodation, transport, food and drink, which is three months’ wages for a Nica. I would strongly hope that hedge fund managers outperform a communist dictatorship. That’s evidence pro capitalism, not contra.

  3. Too many paid chatteraties don’t understand – or willingly misuse – the difference between “pay” and “earn”. If somebody *earns* a squillion quid, good for them. It’s the people *paid* squillions without *earning* it that we should be complaining about.

Leave a Reply

Your email address will not be published. Required fields are marked *