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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.