Carlyle Group LP (CG:US)’s three founders received at least $135 million each in 2012, almost all from dividends on their ownership stakes and distributions on personal investments made in Carlyle funds before the private- equity firm went public in May.
William Conway, Daniel D’Aniello and David Rubenstein were each paid a $275,000 salary and didn’t collect a bonus, Washington-based Carlyle said yesterday in a regulatory filing (CG:US). Each founder owns 15.4 percent of the company’s partnership units, a stake that produced $57.3 million in cash distributions during the year. Conway, D’Aniello and Rubenstein received $140 million, $80 million and $78 million, respectively, in distributions from previous personal investments, Carlyle said.
Private-equity executives benefited last year as a rally in global stocks lifted assets at their firms and fees for overseeing them. Blackstone Group LP (BX:US) co-founder Stephen Schwarzman took home $213.3 million in pay and dividends, Apollo Global Management LLC (APO:US) co-founder Leon Black received $125.5 million and KKR & Co. co-founders Henry Kravis and George Roberts got more than $137 million each, according to reports filed by the firms in the past month. Those amounts don’t include gains on personal investments in the firms’ funds because they weren’t disclosed.
Carlyle, the second-biggest private-equity firm by assets, isn’t required by Nasdaq Stock Market, where its shares are listed, to have a compensation committee because it’s considered a limited partnership. As a result, compensation decisions are made by Conway, D’Aniello and Rubenstein, who took home $138 million each in pay and dividends in 2011 as Carlyle was preparing to offer shares to the public.
The firm raised $671 million in the IPO, selling 30.5 million shares for $22 each. Since then, the stock (CG:US) has gained 47 percent, closing yesterday at $32.37. Carlyle said it’s paying $1.12 per common unit in 2012 dividends.
The three executives also invested their own money in the firm’s funds, the filing shows. Conway committed $140 million last year, D’Aniello contributed $78 million and Rubenstein put in $79 million.
“We’re all about alignment of interests,” said Chris Ullman, a Carlyle spokesman. “If our investors do well, we do well. The founders reinvested most of their gains and gave much to worthy causes.”
Conway, D’Aniello and Rubenstein founded Carlyle in 1987 and have overseen its growth to $170 billion of assets across 113 funds and 67 funds-of-funds. Rubenstein is a signatory of the so-called giving pledge, committing to donate at least half of his wealth to philanthropic causes. Ullman said the 63-year- old last year pledged to give away $170 million.
Carlyle also said that it added three executives to its management committee, which develops and carries out its corporate strategy. Michael Arpey, who heads relations with fund investors, David Marchick, who leads external affairs, and Mitch Petrick, the head of Carlyle’s global market strategies business, join the firm’s three founders as well as the chief operating officer, chief financial officer and general counsel on the committee.
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