Registration filings show
few are spreading the wealth
When a rumor spread in mid-May that three employees had spun
out of $7.5 billion Amaranth Advisors due to dissatisfaction
with the firm's compensation scheme, the firm took the unusual
step of issuing a special letter to investors to debunk the
claims. The gossip was that Amaranth had alienated these
employees by failing to share equity, and investors had been
calling to learn the truth.
In the firm's letter, managing director Steven Johnson noted
that the firm had granted ownership interests to "a number of"
senior employees in 2005, and that "more than 80% of the firm's
2005 performance fees were distributed and were not retained by
the firm's founder" (the firm's emphasis).
As the Amaranth case illustrates, managers are eager to tout
their equity sharing arrangements, and apparently quick to
respond if an egalitarian compensation scheme is called into