Carlyle Details Multimillion-Dollar Pay Packages for New CEOs

(Bloomberg) -- Carlyle Group LP will hand its incoming co-chief executive officers bonuses and stock that will add several million dollars to their annual base salary of $275,000.

Glenn Youngkin and Kewsong Lee will take the reins at Washington-based Carlyle when current co-CEOs David Rubenstein and Bill Conway step down on Jan. 1, the firm announced Wednesday. According to a filing Friday with the U.S. Securities and Exchange Commission, each will be paid a cash bonus equal to 2.5 million times the distributions Carlyle makes to common stockholders.

Based on distributions in 2016 of $1.55 a share, Youngkin and Lee would have pocketed $3.88 million apiece last year under the pay arrangement.

The duo additionally will receive two types of restricted stock that will vest over five years. The first consists of 1.25 million deferred restricted common units awarded to each, of which 250,000 vest each year. Based on Carlyle’s closing price of $22.40 Friday, the shares awarded each year would be worth $5.6 million.

Finally, the pair will be granted an additional 1.25 million shares, which will vest at a rate tied to Carlyle financial performance. In a year when the company fails to meet financial targets set by its board of directors, none of the shares would vest. By contrast, if Carlyle meets or exceeds its targets, Youngkin and Lee would each receive 250,000 to 500,000 additional shares for the year.

Under the pay package, if Carlyle surpassed its financial targets by 200 percent last year, Youngkin and Lee each would have made about $21 million in 2016 in cash and stock, based on the company’s current share price. At worst, each would’ve earned a total of $9.8 million.

Carlyle said it formulated the co-CEOs pay package in a manner “designed to further align” their interests with those of investors.

Last year Rubenstein, Conway and another co-founder, Dan D’Aniello, took home $212 million in combined payouts, according to Carlyle’s 2016 annual report. While each was paid $281,625 in salaries and retirement account contributions, a heftier part of compensation came from dividends on stock ownership in the asset manager. Rubenstein made $73.1 million in dividends and Conway and D’Aniello each received $69.3 million in dividends.

To contact the reporters on this story: David Carey in New York at dcarey13@bloomberg.net, Melissa Mittelman in New York at mmittelman@bloomberg.net.

To contact the editors responsible for this story: Elizabeth Fournier at efournier5@bloomberg.net, Michael Hytha

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