“How much better do you live with $2 billion than $50 million?” chairman and founder of the New York Hedge Fund Roundtable Stanely Goldstein recently asked, the insinuation being that one does not feel much of a difference between living comfortably and living at a pay grade that affords you at least one private jet, multiple castles, an oil tanker, 1,000 eunuchs, a McMansion in every city in America (for storage), and a wing in your main house dedicated solely to deep-frying things. Goldstein wanted to make that case because it would help garner support for an idea he has: to cap hedge fund manager pay. Now, before everyone gets their fleece knickers in a twist, know this-- Stan is doing this for you! “I am a free-market economy, right-of-center Republican, and I resent how the liberals have used hedge funds as a punching bag,” Goldstein said. The way he sees it, hedge fund managers would be much happier if they took home a number that wouldn't be "ridiculed" by the public.
Goldstein told Dealbook that he sees a plan like this: "Firms could arbitrarily cap earnings, then take half of anything earned in excess of that figure. The remainder of the money would be split evenly between other partners at the firm in their profit and loss ration and a bonus pool for all employees."
Giving Stan the benefit of the doubt that he's been drinking when a) he came up with the framework and b) he thought managers would be comforted taking up $50 million instead of $2 billion by the fact that The People will start to like them, I think we should just assume that there's more to this. Like, the junior employees just hold the money initially. It's deposited into their accounts and withdrawn over a period of weeks by the Big Kahunas.
Look Who Wants A Cap On Hedge Fund Pay [Dealbook]