Hedge Fund Compensation

Earlier this week, I asked, "What’s Wrong With Billionaire Fund Managers?"

We noted the very top % of this profession carried enormous compensation for those Alpha creators who earned tremendous returns for their partners. Most of the top earners are also have very significant holdings in their own funds.  They not only get paid for taking risks with OPM, but with their own money at risk as well.

At the same time, if you really want to be upset at enormous paydays, the collection of thieving former CEOs who helped destroy shareholder value then parachuted out with 100s of millions of dollars were better targets for your ire.

All About Alpha looked at manager compensation from a different perspective, and asked Is high hedge fund compensation really that new?

Their approach was from a different angle, based on both earnings size and source

1. Appreciation vs. Compensation
2. Paper vs. Cash
3. Income vs. Options
4.  “Creating” vs. “Speculating”

Here is the quadrant they put together:


In today’s NYT, Harvard prof Greg Mankiw also looks at wealth disparities, using Lloyd C. Blankfein, chief executive of Goldman Sachs and Bill & Hillary Clinton as examples (The Wealth Trajectory: Rewards for the Few). 

Note to Professor Mankiw: From a statistical perspective,  perhaps another example from a pool of candidates greater than three (living former US Presidents) or one (the most recently retired President) might be more suitable, informative and tad a less political. That choice tainted an otherwise fine article…


Courtesy of NYT


What’s Wrong With Billionaire Fund Managers?    http://bigpicture.typepad.com/comments/2008/04/whats-wrong-wit.html

Is high hedge fund compensation really that new?   
All About Alpha, 17 April 2008

The Wealth Trajectory: Rewards for the Few   
NYT, April 20, 2008   

Category: Corporate Management, Wages & Income

The Last Remaining NYC Record Stores

Category: Digital Media, Music

Except at Gas Pump, Not Much Spending Going On

Category: Inflation, Retail

Are Markets Leading or Lagging Indicators ?

Category: Contrary Indicators, Economy, Markets, Psychology, Technical Analysis, Trading

Wall Street Political Donations

Category: Politics

Fear of Missing A Rally

Category: Commodities, Credit, Energy, Finance, Markets, Trading

Aggregating the Aggregators

Over the past few weeks, I have featured several economics/market web aggregators. They all tend to have a focus on business, though many come from overall aggregators that have tabs for  different topics.

Since I like to recursively get all meta on you, here’s my aggregation of all a few dozen blog aggregators, primarily in the Business, Tech and Video space:

(Let me know in the comments which ones I missed, if any . . .)

click on any of these to be taken to their site
Abnormal Returns






the DailyTube

Digg Business/Finance

Economics Roundtable




Read More

Category: Web/Tech, Weblogs

Google’s Black Box

Category: Earnings, Web/Tech

Disappearing Economic Indicators

Category: Data Analysis, Employment, Psychology, Taxes and Policy, Wages & Income

Soros Says Commodity ‘Bubble’ Still in ‘Growth Phase’

Category: Commodities, Psychology