Blackstone Group co-founder and CEO Stephen Schwarzman received more than $1.27 billion in total compensation and dividends last year as earnings eligible for distribution in the private equity giant’s real estate segment jumped more than a third.
Schwarzman, 76, received total compensation of $253.1 million in 2022, up about 58% from the prior year. A big part of the increase came from nearly $190.5 million in carried interest and incentive fees, which represent his portions of profits on Blackstone funds when they top a specified performance threshold. His base salary remained a relatively low $350,000 to signal that Blackstone seeks to tie compensation of top executives with the performance of the company.
Blackstone’s distributable earnings, a measure of profit used to assess performance and the amounts available to shareholders, rose nearly 7.5% to $6.63 billion last year. That was driven by a 34% jump in real estate distributable earnings to $4.3 billion after Blackstone benefited from transactions such as the $5.65 billion sale in May of the Cosmopolitan of Las Vegas casino and luxury resort hotel.
Repeating its 2022 performance this year on the real estate front could prove tough as investors express concern about how rising interest rates and an economic slowdown would affect the commercial property market. In December Blackstone limited withdrawals from its nontraded real estate investment trust after large numbers of investors sought to redeem stock.
As Blackstone paid out $4.40 in total per-share dividends in 2022, up from $4.06 a year earlier, Schwarzman got $1.02 billion in dividends. He is the company’s largest shareholder, having held about a 19% stake.
Blackstone President and Chief Operating Officer Jonathan Gray’s total compensation jumped nearly 90% to $296.5 million after he received about $162 million in carried interest and incentive fees. With about a 3.4% stake in Blackstone, the dividends he received added up to $182.7 million.
“Significant portions of our senior executives’ listed compensation relate to 2021 performance that, due to the timing of awards, was paid the following year,” a Blackstone spokesperson said in an emailed statement to CoStar News.
The spokesperson said that almost 30% of Schwarzman’s listed compensation and about half of Gray’s were tied to Blackstone’s 2021 performance. “Virtually all the remainder is incentive compensation from the first half of 2022 when we had the highest period for realizations in our history," the spokesperson said.