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Bonus Watch: How RenTech Employees Get Paid

Hint: There's a points system involved.
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By Gert-Martin Greuel [CC BY-SA 2.0 de], via Wikimedia Commons

Also a firing offense? Telling Jim's wife he still smokes. By Gert-Martin Greuel [CC BY-SA 2.0 de], via Wikimedia Commons

So Renaissance Technologies co-CEO Robert Mercer may be a bit of a racist, at least according to a guy he just fired. Certainly, the juiciest details in David Magerman’s lawsuit against his former boss concern Mercer’s alleged enthusiasm for, or at least willingness to tolerate, segregation, and his belief that African-Americans were better off in the 1950s before Malcolm X and Martin Luther King Jr. encouraged them to get all uppity.

Alas, being an alleged white supremacist is not illegal, or legally actionable in any way, especially for a white guy from Philly. Magerman knows this; the explosive accusations are just for color and revenge. Underneath the learned discussion of whether the U.S. was better off pre-Civil Rights Acts is the claim that Magerman was fired because he called out Mercer’s support for President Trump, in violation of Renaissance’s policies, specifically the one that says employees can’t badmouth the firm or its members, least of all in the pages of The Wall Street Journal. The problem, as Magerman and his lawyers see it, is that such a policy is “illegal and unenforceable,” and thus RenTech had no cause to fire him, and thus: money, please. Of course, to demonstrate the illegality and unenforceability of said policy, Magerman’s got to show some evidence that it exists. So he just went ahead and attached his entire employment agreement to the publicly-filed lawsuit, even the parts that don’t specifically cover the allegedly illegal and unenforceable gag order. Such as how the firm’s semi-annual bonuses are calculated.

According to the employment agreement, Renaissance Technologies has a bonus pool that is made up of half of the hedge fund firm’s net income from operations. The net income from operations equals the fees earned by Medallion, which charges a management fee of 5% of assets under management plus a performance fee of 36% of profits….

In Magerman’s case, his bonus was determined by the 12,500 points he was allocated towards the bonus pool. In his complaint against Mercer, Magerman says this amounted to "millions of dollars annually."

There's also 30 days vacation and a one-year non-compete... Wait. Points? Tell us more about that. How does one earn points? Can one lose points for telling his boss that he's destroying the country? Does Jim Simons tally them up on a giant chalkboard? Also, 12,500 seems like a lot of points, but also like a suspiciously round number. We can only hope to learn these secrets and more at the trial that will never happen after RenTech coughs up a sizeable settlement (maybe including a large donation from one R. Mercer to the Democratic Congressional Campaign Committee in his own name?) to shut David Magerman up forever.

Inside The Employment Agreement Of Secretive Hedge Fund Renaissance Technologies [Forbes]



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