Stephen Schwarzman, co-founder and chief executive of Blackstone
Group LP, took home about $465.4 million in dividends,
compensation, and fund payouts for 2013, according to a regulatory
filing made Friday.
The total is about double his $229.9 million payout in 2012.
Blackstone, the world's largest manager of so-called alternative
assets, is the latest private-equity giant to disclose in
securities filings the details of its top executives' personal
hauls for 2013. Blackstone and its publicly traded rivals,
including KKR & Co. and Carlyle Group LP, enjoyed surging
profits and stock prices last year as they capitalized on buoyant
markets to cash out of previous investments at record pace.
Earlier this week Carlyle said its three founders collectively
took home about $750 million while KKR disclosed that its founding
cousins Henry Kravis and George Roberts reaped about $327 million
combined. Apollo Global Management LLC has yet to file its
full-year financial statement.
Like the Carlyle and KKR founders, much of Mr. Schwarzman's take
came in the form of dividends paid by the Blackstone shares he owns
and from his own investments in Blackstone's funds.
Mr. Schwarzman was paid a salary of $350,000, Blackstone said,
the same he's earned since the firm became a public company in
2007. The firm said it also paid $66,760 for his security.
Mr. Schwarzman collected dividends totaling $352.5 million for
the year. Mr. Schwarzman, who has yet to sell any Blackstone shares
since the firm's initial public offering, holds about 22% of the
firm's stock. His shares are different from the firm's common stock
and pay a slightly higher dividend, $1.52 for 2013 versus $1.34 for
public shareholders, both all-time highs for the firm. The
difference is due to tax issues.
His investments in Blackstone's funds, both those that are part
of the public company and some older ones that are not included on
the public entity's books, paid out about $91 million, according to
the filing.
He also earned about $21 million in so-called carried interest,
more than double 2012's roughly $8 million. Private-equity firms
such as Blackstone invest money on behalf of clients and take a cut
of deal profits over a certain level, called carried interest.
Carried interest is taxed at a lower rate than ordinary income, a
difference that has been an ongoing topic of debate among
lawmakers.
Private-equity firms say that concentrating their top
executives' take home in dividends, carried interest and
investments made in their funds aligns their interests with
shareholders and fund investors. The fortune of their founders and
top executives hinge on their ability to make money for clients and
shareholders, they say.
A Blackstone spokesman declined to comment on behalf of the firm
and Mr. Schwarzman.
Blackstone, which Mr. Schwarzman founded with former Lehman
Brothers Holdings Inc. chairman Peter Peterson as a merger advisory
business in 1985, has grown into a financial conglomerate. Its
businesses include real estate, credit, and allocating cash to
hedge funds, in addition to buyouts. At the end of 2013 Blackstone
managed assets worth $265.8 billion on behalf of investors such as
pensions, endowments and wealthy individuals.
Mr. Peterson left the firm in 2008, the year after it went
public, leaving Mr. Schwarzman to preside over its expansion.
The New York firm celebrated its most profitable quarter as a
public company to close out 2013 as it took advantage of favorable
markets to profitably sell out of past investments, particularly
those made by its corporate buyout and real estate funds. For the
year, Blackstone's net income was $1.17 billion, more than four
times the prior year's profits, and its economic net income, which
measures unrealized gains in the value of its holdings as well as
accounting for compensation, was $3.5 billion, up 76% from
2012.
Blackstone's shares doubled in 2013, surpassing their initial
public offering price in December for the first time since 2007. On
Friday, Blackstone shares hit a new six-year high, closing up 1.2%,
or 39 cents, at $33.35.
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