A Times article about hedge fund manager "pay" turns out not to be about "pay" at all but rather in part to be about the increase in the value of the investments of hedge fund managers. Though the headlines speak of "lavish paydays" and "huge pay," the text of the article includes passages such as:
While Mr. Shaw ceded control of the funds' management several years ago, he still has a large amount of money invested in the firm, which helped him to earn $530 million last year."
and
Even though Mr. Simons, 74, hasn't handled the day-to-day management of the firm for three years, he landed in the fourth spot on the list with a payday of $1.1 billion last year, partly on the large sum of money he has personally invested in the firm's funds.
The Times article goes on to state: "The highest-paid hedge fund managers all took home considerably more than the top-paid chief executives of public companies."
That's both unknowable and inaccurate. Unknowable, because the Times has no way of knowing how much the top-paid chief executives of public companies earned last year in terms of the paper gains on their investments, not all of which are necessarily publicly disclosed. And inaccurate, too: the lowest-paid of the highest-paid hedge fund managers on the Times top-ten list is said to have "walked away $380 million richer last year." This manager of course has not "walked away"; he's still managing his investments, which could go down in value just as they went up in value. But the Forbes list of top billionaire gainers for 2012 includes Microsoft chairman Bill Gates, whose wealth increased by $5 billion (probably related to his Microsoft stock) and Facebook CEO Mark Zuckerberg, whose wealth increased by $4 billion (probably related to his Facebook stock). Four billion and five billion are both more than $380 million.
In other words, if the Times is going to compare compensation of hedge fund managers and chief executives of public companies, it should do so by applying the same criteria consistently. If the Times is going to include for the hedge fund managers the increase during the year of the value of the managers' investments, then, for the sake of a genuine comparison, it should do the same for corporate executives who are substantial shareholders in their own companies.