How Much Is Too Much to Pay a Rich Person For Being Incompetent?

Are you rich? No? Then the servicey aspect of this post this probably doesn't apply to you. But if you're rich, you probably want to know how you can be richer, right? Here's the secret: Do less work. And the work you do, do it worse. In other words, be a hedge fund manager!

Okay, it's no secret. It's in today's New York Times:

Hedge fund managers heavily populate the so-called 1 percent in the United States. And they are getting richer.

The 25 highest-earning hedge fund managers in the United States took home a total of $21.15 billion in compensation in 2013, according to an annual ranking published on Tuesday by Institutional Investor's Alpha magazine.

They earned that hefty sum in a year when most hedge fund managers fell short of the market's returns. The multibillion-dollar payday is the highest since 2010, and it is 50 percent more than in 2012, according to the survey.

Rereading: "most hedge fund managers fell short of the market's returns." Which is to say, they pulled in hundreds of millions to billions for themselves by making bets with client money that yielded fewer profits than your dad's meager 401(k) with the indexed mutual funds.

For most hedge fund clients, 2013 was disappointing. It was the fifth consecutive year that hedge funds fell short of stock market performance, with the average fund returning 9.1 percent, according to a composite index of 2,200 portfolios collected by HFR, a firm that tracks the industry.

By comparison, the Standard & Poor's 500-stock index soared 32.4 percent after accounting for dividends.

Some hedge fund titans took home large sums of money even as their investors were left with little to show, in large part because of the sheer size of the assets under management and the fees they charge.

What a country! You can spend five years advising millionaires on how to make one-fourth of the returns a day-trading Twitter bot can... and you can still earn yourself enough cash to buy Tajikistan. Like Bridgewater founder Raymond Dalio, who pulled in $600 million in 2013 while earning his investors a white-hot "3.5 percent to 5.3 percent." But Raymond is spread really thin, having to spend so much time promoting "his 123-page Bridgewater manifesto called 'Principles,' which espouses a Darwinian capitalism reminiscent of the works of Ayn Rand."

In fairness to the hedgies, though, the very top earners—like, the $1- to $3-billion earners—are actually beating or keeping pace with the market's returns. Almost. Like No. 2 earner Stephen A. Cohen ($2.4 billion), who took half of his clients' profits for his fee after snagging them a 20 percent return. Which is great for Steve, since next year he's shutting down his fund and paying a "record" $1.2 billion fine "as part of an agreement with the government last year to plead guilty to securities fraud violations."

This is what makes America great: the boldness to risk big, to fail big, and to trust that your countrymen have your back in a big way when the breaks are against you. Unless, of course, you're a lazy, unaccountable, undeserving wage-worker.

[Photo credit: leungchopan/Shutterstock]