Star trader is given $300m to stay at hedge fund Fortress

In what could be the biggest ever payday for a public company executive, Fortress Investment Group, the hedge fund manager which floated in New York last year, has given one of its star traders more than $300m (£157m) to stay at the firm.

Wall Street is agog at the revelation that Adam Levinson, 38, who runs one of the main funds for Fortress, has been handed a giant slug of new shares in the firm, giving him a stake of up to 7 per cent and diluting the power of existing shareholders.

The award comes despite disappointing returns from his global macro fund so far this year, one of the hardest on record for the hedge fund industry. It also comes as Fortress shares languish at their all-time lows, having lost more than two-thirds of their value since they began trading in February 2007.

But Mr Levinson has defended the award, saying he works practically 24 hours a day, putting more than 12 hours in at the office and taking calls through the night. "On a good day, it's a couple of calls overnight," he said in an interview with The Wall Street Journal.

The grant of 31 million shares will vest over time, as long as Mr Levinson continues to work for Fortress, and he has given up part of his profit-sharing deal on the funds he runs at the group.

Nonetheless, with a value of $315m at current prices, the award catapults Mr Levinson to the top of the executive pay league tables. Even Merrill Lynch's boss, John Thain, who was the top-earning chief executive in corporate America last year, was paid just $84m, most of which was a signing-on bonus. Lloyd Blankfein, chief executive at Goldman Sachs, where Mr Levinson once worked as a trader, was paid $54m last year.

At Goldman, Mr Levinson ran one of the bank's Tokyo trading desks and worked with two of Fortress's founders, Peter Briger and Michael Novogratz, joining them in 2002.

The share award has been savaged by analysts and some investors, but Fortress executives have privately explained Mr Levinson's remuneration as the price of staying competitive with the privately owned hedge fund world. The riches available in private funds, or should Mr Levinson have decided to set up on his own, could run into the billions of dollars, and the grant of a 7 per cent slug of the firm brings him alongside its five existing controlling shareholders.

Wall Street gossip has focused on the fact that Mr Levinson is switching his profit-sharing arrangement in the funds he runs at a time when they have been underperforming similar global macro-economic strategy funds, and replacing it with shares in the full Fortress group at a time when its stock is languishing.

In a coruscating investment note last week, Prashant Bhatia, financial sector analyst at Citigroup, listed Mr Levinson's compensation among his reasons for a "sell" recommendation on Fortress shares. "Retaining one senior employee diluted share count by 7 per cent," he told clients. "The senior employee reduced their profit sharing interests in various Fortress Funds in exchange for stock. In our view, this may imply a lack of confidence by this senior employee related to the funds where profit sharing was given up. We can't rule out additional dilutive share grants to other senior employees down the road."