KEY POINTS:
New York - It is annual meeting season in the US and, as ever, boardroom pay tops the agenda at many shareholder meetings.
Rebel investors in the finance giant Morgan Stanley, for example, were trying to push through a "say on pay" resolution this week that would help them to rein in executives such as the bank's CEO, John Mack, who took home US$41.4 million ($56.9 million) last year.
Mack, though, could plead poverty, Wall St style. The rest of the financial community is more focused on the latest pay survey covering the much more secretive world of hedge funds.
There are no letters to shareholders detailing the pay of these superstar fund managers, only awe-filled whispers, accidental late-night boasts and educated guesswork - all compiled in the annual Trader Monthly 100 list.
The staggering fact is that Mack earned less - considerably less - than even the 100th trader on the magazine's list. Each of the top five traders took home more than US$1 billion last year.
Whereas the Trader Monthly survey previously took in traders working inside investment banks and in the commodities trading pits, now all but seven work in hedge funds - the unregulated, private funds that cater to the super-rich and institutions looking for an alternative to straightforward stock investing.
To make the cut-off at 100th place, a trader would have to have netted more than US$50 million last year. The average take-home pay of the 100 on the list was US$241 million, an average that has more than doubled in the four years the survey has been running, confounding predictions that a more competitive hedge fund industry would mean lower fees.
Many funds charge a 2 per cent annual management fee and then take a 20 per cent cut of investment profits.
While the biggest earnings go to those professional gamblers whose bets go right, there is also an emerging hedge fund aristocracy that finds itself on the list year in year out, such as Robert Soros, who has taken over for his father, George.
The survey authors said the sheer size of the funds being managed guaranteed a pay bonanza, even if their actual trading performance might not be up to par.
- INDEPENDENT
