Top private-equity and hedge-fund managers made more money in 10 minutes than the average U.S. worker made 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 U.S. average annual salary of $29,500, said the study, released yesterday by Institute for Policy Studies and United for a Fair Economy. The study was based on data from the 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 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 U.S. corporations averaged $10.8 million in pay last year, the study said, noting an Associated Press survey. Their weekly pay of $207,700 was about seven times the average worker's annual salary.
But top hedge-fund chiefs average $12.6 million a week, or $210,700 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 nonprofit research group in Washington that promotes alternatives to the "corporate-driven approach to globalization." United for a Fair Economy, based in Boston, "raises awareness that concentrated wealth and power undermine the economy" and corrupt democracy, according to its Web site.
Last year, the 20 highest-paid fund managers also made 3,315 times the average pay for the top 20 officials in the U.S. 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," wrote John G. Gaine, president of the Managed Funds Association, a Washington hedge-fund lobbying group, in an e- mail.
Hedge funds are mostly unregulated pools of capital where managers share in the profits of the money invested.