“Limit Could Hurt Managers”
By: Doug Halonen, Pensions & Investments
Published: February 5, 2007
With hedgies garnering some of the highest salaries ever recorded outside of major league sports, who would have thought a bill increasing the minimum wage would hurt hedge fund companies? But according to P&I, it’s true. Never content to pass just one law when they can pass many, the US Senate recently approved a law that impacts both mom-and-pop convenience stores and money management titans. Apparently their new “minimum wage bill” will also limit the amount of deferred compensation that can be paid to executives. Since money managers such as hedge fund companies use deferred compensation as a retention strategy, they will be forced to pay out more cash – and run the risk of losing executives who might take the money and run.
The apparent “Christmas tree bill” also contains several other loosely-related provisions. Which begs the question: why refer to such an all-encompassing law simply as a “Minimum wage bill”? We guess the “One-million-dollar-limit-on-deferred-compensation-bill” didn’t play as well on Main Street.
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