Equities

Carlyle Group CEO Harvey Schwartz Receives $187 Million Compensation Package

Carlyle CEO Schwartz receives $187 million in first-year pay, aligning incentives with firm's long-term success.

By Alex P. Chase

4/3, 20:08 EDT
The Carlyle Group Inc.
Goldman Sachs Group, Inc.
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Key Takeaway

  • Carlyle Group's CEO, Harvey Schwartz, received a $187 million pay package in his first year, with $180 million in restricted stock.
  • Schwartz's compensation and strategic initiatives aim to align CEO incentives with Carlyle's long-term success and stock performance.
  • The board evaluated Schwartz's performance positively, highlighting achievements in fee-related earnings and cost reduction.

CEO Compensation Package

Carlyle Group Inc. has awarded its Chief Executive Officer, Harvey Schwartz, a compensation package valued at $187 million for his inaugural year at the helm of the private equity firm. The bulk of this package comprises $180 million in restricted stock, which vests over a period contingent on Schwartz's tenure and the firm's stock performance. Additionally, Schwartz received a $6 million cash bonus, surpassing the target amount, and a salary of $838,462. This compensation structure is designed to align the CEO's incentives with the long-term success and stock performance of Carlyle.

Strategic Initiatives and Performance

Upon taking the role, Schwartz, a former president at Goldman Sachs Group Inc., was charged with several critical objectives aimed at propelling Carlyle's growth. These included enhancing the performance of key strategies and improving the firm's stock price, which has historically underperformed compared to its largest publicly traded competitors. In his first year, Schwartz undertook significant measures to revamp the compensation model for key dealmakers and executives, linking their pay more directly to investor returns. He also initiated cost-cutting measures across various divisions. Furthermore, Carlyle expanded its share buyback capacity to $1.4 billion earlier in the year, demonstrating a commitment to bolstering shareholder value.

Board Evaluation and Achievements

The board of directors at Carlyle, featuring founders David Rubenstein, Bill Conway, and Daniel D’Aniello, conducted a thorough evaluation of Schwartz's performance. They concluded that he not only met but exceeded the established goals across several key metrics. These metrics included fee-related earnings, cost reduction efforts, and the implementation of organizational changes. The board's assessment underscores the positive impact of Schwartz's leadership on Carlyle's operational and financial health during his first year.

Management Quotes

  • Harvey Schwartz, CEO of Carlyle Group Inc.:

    "The vast majority of his compensation — $180 million of restricted stock that he received when he joined the firm — vests over several years and is based on how long he stays in the role and how well the shares perform. He also received a $6 million cash bonus that was double the size of his target and a salary of $838,462."