NEW YORK – Blackstone Group issued compensation details for the first time on Monday, disclosing in a filing that CEO Stephen Schwarzman received nearly $400 million last year and stands to make at least another $450 million after the private equity firm goes public.
Schwarzman will own around 23 percent of Blackstone after its public offering, expected in the next few weeks. Should the IPO price in the expected range of $30 per share, Schwarzman's stake would be worth $7.73 billion.
The filing also says Blackstone paid co-founder Peter Peterson $213 million last year and will pay him another $1.88 billion when the firm goes public.
Blackstone said it expected to record significant net losses for a number of years after the IPO as a result of paying out the equity-based compensation. Blackstone earned $2.27 billion in net income last year, according to a previous filing.
Executive earnings detailed in Monday's filing are not annual salary but instead reflect their economic stake in the firm and Blackstone's huge profits gained from their investment portfolio. The New York-based M&A advisory and investment company started in 1985 with $400,000 and now has $88 billion under management.
Details of what Blackstone executives earned were highly anticipated, as this will be the first major U.S. private equity firm to go public. There was also considerable interest in seeing Blackstone's inner workings for the first time.
With frothy debt markets and a steady economy, private equity firms are experiencing the best investment climate to date, hauling in more than $400 billion of deals in the first half of this year alone -- more than triple the amount in the year-earlier period.
And Blackstone is among the most high-profile and aggressive among the private equity buyers, snapping up such huge assets as Equity Office Properties Trust, Freescale Semiconductor, and Michaels Stores.
Blackstone said it would pay President Hamilton James at least $147.9 million after its public offering. That's in addition to the $97.3 million he earned last year.
In March, Blackstone filed to take 10 percent of the firm public in an IPO worth $4 billion. Last month, it said China would take a $3 billion stake.
Blackstone said its private equity fund had $19.6 billion in committed capital, making it the second-largest such fund behind Goldman Sachs (GS).