Harvey Schwartz, the new CEO of The Carlyle Group, is set to earn more than $180 million over the next five years, a package that will make him one of Wall Street’s highest-paid executives.
Schwartz, a former Goldman Sachs executive, will receive up to $108 million in performance-based stock awards to be paid in annual installments, a specified amount over a five-year period in Carlyle shares, according to a securities filing released Monday evening. should increase from ,
In addition, Schwartz, whose appointment was announced on Monday, is being given $72 million in restricted stock awards between 2024 and 2027, contingent on his continued employment at the New York and Washington-based investment group.
To earn the full award, Schwartz will have to meet share price performance targets, which get tougher over a five-year period, with stock appreciation more than doubling by 2028, according to the filing. Carlyle would also need to generate total shareholder returns each year greater than 60 percent of the companies in the S&P 500 index.
Schwartz will also earn a $1mn annual base salary and will be eligible for bonuses of up to $6mn annually. Should he earn the full amount, his salary would average $40 million a year, which is significantly higher than many other Wall Street executives, including David Solomon, the current chief executive of Goldman Sachs.
Solomon projects $25 million in 2022, down nearly 30 percent from a year ago.
However, the package is less than the $300 million deal that former chief executive Kaewsong Lee was gunning for last year in broken contract talks that resulted in his abrupt exit.
In August, the Financial Times reported that Lee was requesting a five-year stock award, also heavily linked to Carlyle’s share price, that would have been paid if the full amount doubled.
Carlyle’s billionaire co-founders Bill Conway, David Rubenstein and Daniel D’Aniello, who sit on its board, would not be involved in talks on the offer and did not respond to the submission, the FT reported.
If Carlyle’s stock stagnates or falls over the next five years, Schwartz will be paid significantly less.
The arrangement mirrors stock awards given to top executives at rival private equity firms KKR and Apollo Global, although it is smaller in size, reflecting the fact that Carlyle manages less money and has a lower market capitalization.
KKR co-chief executives Joseph Bay and Scott Nuttall were given deals in December that, in a best-case scenario, would pay more than $1 billion in stock over a five-year period, according to the filing.
Other firms, including Apollo Global and TPG, have given top executives multi-year stock awards that can be worth hundreds of millions of dollars.
Carlyle has also agreed to pay up to $19.5 million in stock grants to Schwartz, which he must forfeit from his former employer Goldman Sachs.
The overall compensation package could be eliminated if Schwartz is fired. The filing said it would be formed within two years if Carlyle is sold to a competitor.
