The $4 Billion Hedge Fund Manager

A couple data dumps out this morning are hard to resist: a survey of CEO pay from the WSJ, and a list of top-earning hedge-fund managers out from the trade pub AR (and summarized in the NYT).

You can't quite do an apples-to-apples comparison between the lists — the WSJ numbers are based on U.S. CEOs' direct compensation for 2009, while the AR numbers combine the hedge fund bosses' management fees with the increase in value of their personal investments in their funds last year.

Nevertheless, the vast gap between what top CEOs make and what top hedge fund managers make is pretty stunning. The CEOs make tens of millions. The hedge fund managers make 100 times as much.

Here are the top five earners in each group:

CEOs:

  • Ray Irani, Occidental Petroleum: $52 million
  • Robert Iger, Disney: $21 million
  • Samuel Palmisano, IBM: $20 million
  • William Weldon, Johnson & Johnson: $20 million
  • Jay Fishman, Travelers: $20 million

Hedge fund managers:

  • David Tepper, Appaloosa Management: $4 billion
  • George Soros, Soros Fund Management: $3.3 billion
  • James Simons, Renaissance Technologies: $2.5 billion
  • John Paulson, Paulson & Company: $2.3 billion
  • Steve Cohen, SAC Capital Advisors: $1.3 billion

Tepper made money in part by investing in banks and other financial institutions during late '08 and early '09, when many investors worried that more big financial institutions were about to go bust. The government stepped in around the same time to back big banks.

Tepper's flagship fund rose more than 130% last year, the Times notes. That was a huge swing from the previous year, when Tepper lost money and his fund was down 27%.

The hedge fund managers who finished in the second, third and fourth spots all managed to make money in both 2008, when the market plummeted, and 2009, when it came roaring back. That's a reminder of the original selling point of hedge funds: They're supposed to profit no matter what the market's doing.

Paulson made money in 2008 by betting against the banks. In 2009, he bet on the banks' comeback and profited again, the NYT says.

Meanwhile, CEOs saw their pay fall slightly last year, to a median of $6.95 million. That was down 0.9% from the year before. It was the second year in a row that the WSJ's survey showed a decline — and only the third time CEO pay fell since 1989, when the WSJ started tracking the bosses' pay.

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