Anyone who doubts that the top 1% is getting wealthier needs to consider the factoids from this CNN Money story, “Richest hedge fund managers get richer.” John Arnold earned $1.5 to $2 billion for having bet correctly on oil prices. Four other hedge fund managers were estimated to have earned over $1 billion. The average earnings of the top 100 was $241 million, up from a mere $110 million for the top 25 in 2002. So both the number of extraordinarily high earners and the amount they are reaping is going up.
Many of these top hedge fund managers are consistent obscene earners. James Simons of Renaissance Technologies Corp., ESL’s Edward Lampert, and storied raider T. Boone Pickens are regularly ranked in the very top echelon.
The existence of this hedge fund elite undermines on of the arguments made about income disparity. Some analysts claim it isn’t as bad as it appears because many members got there via a one-time exercise of stock options. Well, for CEOs, option grants are an annual event, so there’s no reason to assume they’d exercise them all at once. Similarly, the top !% income threshold is below $1 million, and it’s hard to imagine any top (or even medium grade) hedge fund manager earning less than that on a regular basis.
