WASHINGTON: Top private-equity and
hedge fund managers made more in 10 minutes than average-paid US workers earned
all of last year, according to a new study from two research groups.
The 20 highest-paid fund managers made an average of $657.5 million,
or 22,255 times the US average annual salary of $29,500, said the study,
released on Wednesday by Institute for Policy Studies and United for a Fair
Economy. The study cited data from the US Labor Department and Forbes magazine.
“The fact that these pay levels for fund managers are so
out-of-sight is going to drive up pay at publicly traded companies,” said
Sarah Anderson, director of the global economy program at the Washington-based
Institute for Policy Studies and a co-author of the study. “There are
people out there with a straight face claiming that public company executives
are underpaid.”
The private equity boom in the past year has
pushed the pay ceiling for fund managers “further into the economic
stratosphere,” the
study said. Chief executive officers at
large US corporations averaged $10.8 million in pay last year, the study said,
citing a survey. Their weekly pay of $2,07,700 was about seven times the average
worker’s annual salary.
The study’s authors said top
hedge-fund managers are making more in a fraction of an hour than a typical
worker makes in a year. The hedge-fund chiefs average $12.6 million a week, or
$2,10,700 an hour based on a 60-hour week. That’s $35,100 every 10
minutes, compared with $29,500 a year for the average worker.
The
Institute for Policy Studies is a liberal non-profit research group that
promotes alternatives to the ‘corporate-driven approach to
globalisation.’ United for a Fair Economy, based in Boston, “raises
awareness that concentrated wealth and power undermine the economy” and
corrupts democracy, according to its website. In 2006, the 20 highest-paid fund
managers also made 3,315 times the average pay for the top 20 officials in the
US government’s executive branch, including the president, the study said.
Hedge-fund compensation is “fee-based and directly
attributable to a firm’s assets under management and performance,”
John G Gaine, president of the Managed Funds Association, the Washington-based
lobbying group for hedge funds, said in an e-mailed statement.
Hedge
funds are mostly private and unregulated pools of capital where managers can buy
or sell any assets, participating substantially in the profits of the money
invested.
Sources:Economic Times.
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