Daily Management Review

CEO of The Blackstone Group earns $800 mln in a year


03/05/2018


CEO of Blackstone investment company, Stephen Allen Schwarzman, earned at least $ 800 million last year. This is one of the biggest awards received by a head of a public companies, and this highlights the restoration of the financial sector after the crisis.



World Economic Forum via flickr
World Economic Forum via flickr
Probably, Schwarzman 's income exceeded $ 800 million, which Blackstone indicated in the documents submitted to regulators. This time, they for the first time do not take into account the proceeds from his personal investment in Blackstone funds. Schwarzman likes to note that his salary is $ 350 000, which corresponds to the salaries of less experienced specialists of his company. At the same time, he has earned more than $ 3.2 billion over the past five years, including in the form of dividends. For comparison: the median salary, which Blackstone paid to about 2360 its employees, is $ 218,449.

Schwarzman is one of the highest-paid top managers of public companies. In 1987, the compensation of Michael Milken, so-called Junk Bond King, in Drexel exceeded $ 550 million. In 2010, the founder of the Paulson & Co. hedge fund. John Paulson earned more than $ 5 billion thanks to a successful bet on the drop in the cost of subprime mortgage bonds during the financial crisis.

The remuneration of managers of banks and other financial organizations grew in recent years against the backdrop of a rally in the stock market. The average compensation of general directors Goldman Sachs, Citigroup, JPMorgan Chase, Bank of America and Morgan Stanley increased 17% last year to $ 25.3 million. Blackstone also benefited from the growth of stock and debt markets. Besides, the company took advantage of the fact that banks began to engage less in such types of business as specialized lending. At the end of 2017, assets under the management of Blackstone were $ 434.1 billion.

The leaders of technology and energy companies have also made good money in recent years. Mark Zuckerberg received $ 3.3 billion in 2013, taking advantage of options to sell shares in Facebook. Richard D. Kinder, co-founder of oil and gas pipelines Kinder Morgan, also earned $ 1.1 billion in 2011 due to options.

As for Blackstone's competitors, KKR co-founders Henry Kravis and George Roberts earned more than $ 170 million each in 2017. Leon Black, Josh Harris and Mark Rowan of Apollo Global Management received $ 209 million, $ 132 million and $ 101 million, respectively.

Some experts are skeptical of the large remuneration of top-managers from Wall Street against the backdrop of weak wage growth and concerns about inequality in the US. "Does that mean that these people worked better? No, it only shows that they were at the right time in the right place," says Rosanna Landis-Weaver of As You Sow, which protects interests of shareholders.

source: ft.com






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