In March 2009, the International Organization of Securities Commissions (IOSCO) issued its Hedge Funds Oversight Consultation Report (Consultation Report), outlining ideas for enhanced oversight of various aspects of hedge fund investments and hedge fund manager operations.  In particular, the Consultation Report discusses hedge fund manager compensation, identifying what IOSCO deems to be shortcomings in the current compensation structure that could exacerbate various risks to investors and the broader financial system.  IOSCO is an international group of securities regulators organized to promote high and unified standards of market integrity, exchange information among members and provide mutual assistance.  IOSCO itself is not regulator and does not have binding regulatory or legal authority; its authority is limited to its ability to persuade and build consensus.  Nonetheless, the recommendations in the Consultation Report are timely, coming as they do on the heels of requests from pension funds and other institutional investors to renegotiate fees with hedge fund managers and otherwise restructure their relationships.  We discuss the problems identified by IOSCO with respect to hedge fund manager compensation, as well as its proposed principles-based remedies.  We also offer practitioner insight into how hedge fund manager compensation might be regulated, and whether it should be.