Stephen A. Schwarzman, the founder and Chief Executive Officer (CEO) of The Blackstone Group L.P. BX, received $690 million as annual pay for 2014. The payout amount, disclosed by the private equity firm in a regulatory filing, reflected around a massive 50% rise on a year-over-year basis and marked the highest annual pay ever awarded to a private equity executive.
Salary with Perks
Mr. Schwarzman holds around 20% of Blackstone’s stock, which earned him around $570.5 million in dividends during 2014. A strong performance aided by favorable market conditions, which boosted the investment values thereby improving profitability, resulted in the company paying high dividends last year.
Moreover, the company awarded Mr. Schwarzman $85.9 million in compensation including a base salary of $350,000, which has been paid to him since the company went public in 2007. However, no bonus was granted to him.
Further, Mr. Schwarzman’s investments in Blackstone funds yielded around $33.5 million, adding his total pay in 2014 to a record $690 million. The rise in the CEO’s pay package did not come as surprise, given the company sturdy performance throughout the year.
A Sneak Peek into 2014 Earnings
Blackstone reported a 22% year-over-year growth in its economic net income (ENI) for 2014, driven by strong performance of Real Estate and Private Equity segments. While the Real Estate segment benefited from the valuation gains on investments such as the successful initial public offerings of Hilton, Extended Stay and Brixmor, the Private Equity segment gained from returns across all significant funds.
Moreover, the company impressed with its effective cost management and steady improvement in assets under management during the year. In addition, the company shelled out total distributions of $1.92 per share in 2014, further increasing investors’ confidence in the stock. This could also be seen in the 13.9% rise in share price in 2014.
Our Viewpoint
Other private equity firms such as Apollo Global Management, LLC APO, The Carlyle Group LP CG and KKR & Co. L.P. KKR also disclosed the annual payout of their senior executives in their regulatory filings last week. However, none of the CEOs or founders of these companies collected as much as Blackstone’s executive officer.
Currently, Blackstone carries a Zacks Rank #3 (Hold).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment