Blackstone Founder Stephen Schwarzman received $1.1 billion from his employer for 2021.
Schwarzman generated $941.6 million through dividends from his 19 per cent stake in New York-based Blackstone, according to a regulatory filing on Friday (Saturday AEDT). He also earned $160.3 million from compensation.
A SEC filing indicates:
Schwarzman Founding Member Agreement
Upon the consummation of our initial public offering, we entered into a founding member agreement with Mr. Schwarzman. On March 1, 2018, we amended and restated this agreement, with the approval of the conflicts committee advised by independent counsel, to address certain retirement benefits to be received by Mr. Schwarzman. Mr. Schwarzman’s agreement provides that he will remain our Chairman and Chief Executive Officer (or, as determined by Mr. Schwarzman, our Chairman or Executive Chairman) while continuing service with us and requires him to give us six months’ prior written notice of intent to terminate service with us. The agreement provides that following retirement (or, if applicable, the date on which he ceases active service as a result of his permanent disability), Mr. Schwarzman will be provided with specified retirement benefits for the remainder of his life, including that he be permitted to retain his then current office and continue to be provided with administrative support, access to office services and a car and driver. Mr. Schwarzman will also continue to receive health benefits following his retirement until his death, subject to his continuing payment of the related health insurance premiums consistent with current policies. Finally, Mr. Schwarzman will also receive reimbursement for travel costs (including travel on personal aircraft) for Blackstone related business functions, annual home and personal security benefits, reasonable access to our Chief Legal Officer, reasonable access to certain events, legal representation for Blackstone related matters, and, subject to his continuing payment of costs and expenses related thereto, he will continue to be provided with offices, technology and support for his family office team at levels consistent with current practice.
The agreement provides that, following Mr. Schwarzman’s termination of service, he or related entities will remain entitled to receive awards of carried interest at reduced levels until the later of February 14, 2027 or the date of Mr. Schwarzman’s death. The profit sharing percentage for any carried interest awarded in new funds launched after Mr. Schwarzman’s termination of service shall generally be set at 50% of the profit sharing percentage Mr. Schwarzman held in the most recent corresponding predecessor fund prior to his termination of employment or, in the case of new funds without a corresponding predecessor fund prior to Mr. Schwarzman’s termination of service, a profit sharing percentage set at 50% of the median of the aggregate profit sharing percentages held by Mr. Schwarzman at the time of his termination of service.
While currently Mr. Schwarzman is entitled to invest in or alongside our investment funds without being subject to management fees or carried interest, this has been extended to continue until ten years following the date of Mr. Schwarzman’s death as to Mr. Schwarzman, his estate and related entities.
Schwarzman benefited from private equity's preferred carried interest taxation. Forbes reported in 2019:
It’s never been more clear that our country’s tax code is built to serve only those who have the most money. While hedge fund managers, private equity executives and venture capitalists benefit from the carried interest tax loophole, everyday Americans barely get a deduction for their student loan interest payments.
Schwarzman is one of America's policy making billionaires. Last year he received $611 million in compensation from Blackstone. His compensation nearly doubled during a very difficult year for many Americans. Obscene, absurd...you decide about Mr. Stone.
Update 2-28-22: KKR co-founders Henry Kravis and George Roberts each received over $100 million from their PEU. Over $67 million came from carried interest earnings. Team Obama, Trump and Biden all had a chance to eliminate this tax break and none did. Politicians Red and Blue love PEU and increasingly, more are one.
Update 8-4-22: Schwarzman is lauded as a hero for relaying a message to Canadian President Justin Trudeau on updating NAFTA. There must be an effort to eliminate PEU preferred "carried interest" taxation. Cue to the PEU hero stories and ignore the billionaire villains not paying their fair share for decades.
