If you thought the AIG or Merrill investment banking bonuses were too high, you might not be feeling the love for the finance industry’s top hedge fund managers either. They got paid a wee bit more.
There’s #1 James Simons of Rennaisance Technologies at $2.5 billion, but things fall dramatically off after that. Consider #4 George Soros at $1.1 billion.
These reported earnings surely come with tax. Executive compensation at hedge funds is taxable, but rather thinly so, at the capital gains rate, 15%. The Obama budget seeks to tax these incomes as income, fancy that.
One might also ask what value is created by hedge funds in their heroic role of taking trading positions? Maybe some, arguably, as they are going to be perhaps the buyers of many a “toxic asset”. The rise in value of those hidden gems once they are off bank balance sheets could certainly help Paulson, Simons and Soros regain their $3+ billion paychecks from 2007.
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