Called "Enron's former wunderkind trader of natural gas" by The New York Times, 33-year-old John Arnold took home an estimated US$1.5 billion (about S$2.3 billion) to $2 billion in 2006 to join the exclusive club of top industry earners in the US.
According to a study by Trader Monthly magazine, his pay was more than that of veterans such as oil trader T Boone Pickens and self-made billionaire hedge fund investor and founder of SAC Capital Partners Steven A Cohen.
His humongous high pay was a reward for correctly calling the direction of natural gas prices and delivering a whopping 317 per cent before fees to investors in his hedge fund Centaurus.
After joining Enron out of university in 1995, Mr Arnold was credited with making US$750 million for Enron in 2001 by trading natural gas contracts. For this, he was rewarded with a bonus of US$8 million, the largest paid to any Enron employee for that year. He was only 26 then and some critics pointed out that he had lost over US$200 million the previous year.
When Enron sank in late 2001, Mr Arnold started Centaurus in 2002 with his US$8-million bonus.
He started with three employees trading out of one room with a kitchen. Today, the company employs 36 people, including a full-time meteorologist and big-name traders such as Greg Whalley, a former Enron president. Centuraus' assets under management have also grown to US$1.5 billion.
Besides Mr Arnold, mathematician-turned-investor James Simons of Renaissance Technologies Corp., ESL's Edward Lampert, veteran oil trader T Boone Pickens and SAC Capital Advisors' Steven Cohen are the other four top earners who made at least US$1 billion each.
Mr Simons, Mr Lampert and Mr Pickens have ranked among the top three earners since magazines such as Alpha and others started tracking their paychecks.
As a comparison, the 100 best-paid managers in the US earned an average US$241 million, Trader Monthly reported.
The list of top earners also included Robert Soros, who has taken over for his father George Soros, Stanley Druckenmiller, who helped Mr Soros earn billions, Jim Chanos, who was among the first to spot trouble at Enron, and William Ackman, credited with pushing for corporate change at companies such as Wendy's International and McDonalds.
About US hedge funds
Hedge funds are loosely regulated investment pools charging a performance fee and typically open to only a limited number of investors.
In the US, the best-paid hedge fund managers delivered returns of 30 percent and 40 percent last year, but the average hedge fund's returns were only about 13 per cent, according to Chicago-based performance tracker Hedge Fund Research Inc.
Last year, US hedge funds returned only slightly more than the average US stock mutual fund which gained 12.4 per cent, but cost a lot less, according to data from Lipper Inc., a unit of Reuters.
