Hedge Fund Billionaire to Rate Companies for 'Justness'

Hedge fund billionaire and Robin Hood Foundation founder Paul Tudor Jones is hoping to address growing income inequality in the U.S. by rating companies for their "corporate justness," the New York Times reports.

Jones is among a small group of billionaires who have inveighed against the widening wealth gap and endorsed changes to a tax loophole benefiting hedge fund managers and private equity investors that would, among other things, raise their own taxes. Arguing that income inequality is driven in part by "shareholder hegemony," the principle that companies should focus on maximizing their profits and return as much of that profit as possible to shareholders, Jones is calling on companies to make social responsibility as much a priority as profits and share price.

To that end, JUST Capital, the nonprofit organization Jones co-founded in 2013 with spiritual self-help author Deepak Chopra, plans to publish, in the new year, a "corporate justness" ranking of the top one thousand publicly traded companies. The rankings, which will be made available for free, will be based on a scale derived from a survey of forty-three thousand Americans conducted earlier this year to determine what people value most in a company — employee pay and benefits, employee satisfaction, product benefit or harm, its human rights record, its governance and profitability, its environmental impact, customer satisfaction and value, its community relations and charitable giving, corporate ethics and honesty, and job creation (in descending order). The idea, according to the Times, is to reward companies that offer better pay, boast happier workplaces, and demonstrate a commitment to transparency, while shaming others to follow suit. While Jones's hedge fund, and thousands of others, will be exempt from scrutiny because they're not publicly traded, Jones himself has taken a small step in the direction of greater "corporate justness" by conducting a comprehensive review of salaries at his firm and raising the wages of subcontractors who were paid less than $10.50 an hour.

Not all economists agree that shining a spotlight on corporate behavior will help narrow the growing wealth gap, however. Sam Wilkin, author of Wealth Secrets of the One Percent, told the Times that income inequality was driven not just by bloated executive compensation or the single-minded pursuit of profit, but also by a two-tier economy in which knowledge-intensive industries such as technology, finance, and health care have soared to new heights of profitability while leaving older, more traditional industries behind.

Still, when asked at a conference earlier this year whether he was the best messenger to preach a message of corporate altruism, Jones replied that he had been thinking about how to reimagine capitalism ever since hearing about the Giving Pledge — a commitment by billionaires to direct at least half their wealth to philanthropy. "What's the purpose of accumulating all [that] money," Jones added, "when I'm just going to give it back to the people I conceivably took it from?"

Alessandra Stanley. "A Plan to Rank ‘Just’ Companies Aims to Close the Wealth Gap." New York Times 12/20/2015.