Blackstone's Schwarzman snags $702.4 million

Posted Aug 14th 2009 8:15AM by Tom Taulli
Filed under: Blackstone Group L.P (BX)

Over the past couple years, it's been horrible for the private equity sector, right? Well, not so for the head of the Blackstone Group (NYSE: BX), Steve Schwarzman. According to the Corporate Library -- which put together a top 10 list for the highest paid executives for 2008 -- he was first on the list. The second was Oracle's (NASDAQ: ORCL) Larry Ellison, with $543 million.

When you add up all the sources of income (cash/bonus, stock options and restricted shares), the compensation for Schwarzman comes to $702.4 million. Just imagine if the market was stronger.

However, there are some things to keep in mind. First of all, Schwarzman is the co-founder of Blackstone, which he helped to start in the late 1980s. Interestingly enough, the first few years of the firm's existence were particularly rough.

Next, Blackstone was able to avoid the problems of the subprime implosion and as a result, has a strong balance sheet. There was no need for a TARP bailout. In fact, Blackstone has $15 billion in fresh capital to do deals.

Finally, nearly $700 million of Schwarzman's pay came from vested stock grants. Again, this is a reflection of the fact that he was the co-founder of Blackstone.

True, it is still significant wealth. But, when you take a risk on a new venture -- and an innovative business model -- you should reap the rewards.

Tom Taulli is the author of various books, including The IPO Primer and The Complete M&A Handbook.

Tags: Blackstone, BX, featured, private equity, Steve Schwarzman

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Reader Comments (Page 2 of 2)

8-15-2009 @ 5:10AM

paul said...

If anyone ever questioned the stupidity and ignorance of those on the supposed right just read the posts on here. The republicans are the party that has this nation in the mess its in not the dems and the dems are only trying to undo the damage these right wing criminals have done. Its so blatanly obvious that you dumbed down righties can do nothing but regurgitate some idiotic lie that was spoon fed to you via FAUX noise or from druggie limpbaugh. If you morons werent so stupid this nation wouldnt be in the mess its in due to you idiots empowering the very garbage that does the damage. There is no difference between a terrorist and a republican anymore, they are one in the same.

8-15-2009 @ 6:03AM

Steven Poteat said...

My wife has bought from Blackstone, if it is the same company BUT SHE WILL NEVER BUY AGAIN. That I can and will guarantee!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!1