So to review, the firm allowed market timing in its mutual funds to enrich hedge funds, at the expense of its fund shareholders. It did so while misleading both fund and parent company shareholders with language claiming it would do no such thing in its fund prospectuses (the Supreme Court ruling I referenced earlier does not appear to have questioned this, only the liability).
Now from a NY Times article on a study of executive compensation in 2010 comes this:
Eleven companies analyzed in the report gave top executives a combined pay package amounting to 1 percent or more of the companies’ average market value over the course of the year. The Janus Capital Group, the mutual fund concern, topped the list, with pay totaling almost $41 million for five executives. This accounted for 1.95 percent of the company’s average market value over 2010.
“To earn their keep,” the report said, “managers would have to create stock market value in the full amount of their pay.” The executives at Janus failed to increase value in 2010, when the stock closed out the year roughly where it had begun it. This year, the company’s shares are down almost 30 percent.
Janus declined to comment.
There is a reason clients tend to gravitate toward private firms where manager/owners have some liability when playing with other people’s money. Not that private ownership is a panacea, but it at least provides some form of constraint.