[edit] Top earnersInstitutional Investor magazine annually ranks top-earning hedge fund managers. Earnings from a hedge fund are simply 100% of the capital gains on the manager's own equity stake in the fund plus 20% to 50% (depending on policy) of the gains on the other investors' capital.The 2004 top earner was Edward Lampert of ESL Investments Inc. who earned $1.02 billion during the year (PR Newswire link).The 2005 top earner was James Harris Simons with an earning of $1.6 billion according to Alpha magazine.[10] However, Trader Monthly reported that Simons only earned about $1 billion and that the top earner was instead T. Boone Pickens with an estimated earning of over $1.5 billion during the year.[11]The full top 10 list of hedge fund earners according to Trader Monthly includes:1. T. Boone Pickens - estimated 2005 earnings $1.5bn + 2. Steven A. Cohen, SAC Capital Advisers - $1bn + 3. James H. Simons, Renaissance Technologies Corp. - $900m - $1bn 4. Paul Tudor Jones, Tudor Investment Corp. - $800m - $900m 5. Stephen Feinberg, Cerberus Capital Management - $500 - $600m 6. Bruce Kovner, Caxton Associates - $500m - $600m 7. Eddie Lampert, ESL Investments - $500m - $600m 8. David E. Shaw, D. E. Shaw & Co. - $400m - $500m 9. Jeffrey Gendell, Tontine Partners - $300m - $400m 10. Louis Bacon, Moore Capital Management - $300m - $350m 10. Stephen Mandel, Lone Pine Capital - $300m - $350m [edit] Notable hedge fund management companiesSometimes also known as alternative investment management companies.Amaranth Advisors Bridgewater Associates Centaurus Energy Citadel Investment Group D. E. Shaw & Co. Everest Capital Estlander & Rönnlund Fortress Investment Group Goldman Sachs Asset Management Long Term Capital Management Moore Capital Management Pirate Capital LLC Renaissance Technologies SAC Capital Advisors Soros Fund Management [edit] Top 25 funds of hedge funds by assetsFunds of hedge funds invest in a portfolio of underlying hedge funds rather than investing in securities directly. They hire the hedge fund managers on behalf of their clients following due diligence on the managers in addition to building diversified portfolios of these managers. They are ranked by Dec 2005 Assets Under Management (though this cannot be taken as the final word on the matter given the intense privacy that surrounds much of the industry). See Institutional Investor Magazine Link for the 100 largest hedge funds: http://www.deshaw.com/articles/Alpha.pdfUnion Bancaire Privée (UBP) (Geneva, Switzerland) $20.8 billion ([23]) HSBC Private Bank (Suisse) / HSBS Republic Investments (London, UK) $20.2 billion ([24]) Permal Asset Management (New York, NY) $18.8 billion ([25]) Crédit Agricole Alternative Investment Products Group (Paris, France) $18.5 billion[citation needed] ([26]) Société Générale (Paris, France) $15.9 billion ([27]) Quellos Capital Management (Seattle, WA) $15.0 billion ([www.quellos.com]) Ivy Asset Management (Jericho, NY) $14.9 billion ([28]) Grosvenor Capital Management (Chicago, IL) $14.7 billion ([29]) Financial Risk Management (FRM) (London, UK) $ 13.3 billion ([30]) Pictet & Cie. (Geneva, Switzerland) $13.0 billion ([31]) Man Investments (London, UK and Pfaffikon, Switzerland) $12.7 billion ([32]) Notz Stucki & Cie. (Geneva, Switzerland) $10.7 billion ([33]) Blackstone Alternative Asset Management (New York, NY) $9.3 billion ([34]) Arden Asset Management (New York, NY) $9.2 billion ([35]) Pacific Alternative Asset Management Co. (PAAMCO) (Irvine, CA) $8.9 billion]] ([36]) J.P. Morgan Alternative Asset Management (New York, NY) $8.8 billion ([37]) Mesirow Advanced Strategies (Chicago, IL) $8.2 billion ([38]) Tremont Capital Management (Rye, NY) $8.2 billion ([39]) CSFB Alternative Capital (New York, NY) $7.9 billion ([40]) AIG Global Investment Group (New York, NY) $6.7 billion ([41]) Harris Alternatives (Chicago, IL) $6.7 billion ([42]) DB Absolute Return Strategies (New York, NY) $6.6 billion ([43]) RBS Asset Management (London, UK) $6.5 billion ([44]) Lehman Brothers Alternative Investment Management (New York, NY) $6.2 billion ([45]) EIM (Nyon, Switzerland) $6.0 billion ([46])

two questions:1) Do they have to pay tax?2) Do you work for one of these firms? how much usually will employee get each year?