If you work for Blackstone this year, you're going to get paid a lot. Not just a small lot like Goldman Sachs, but a big lot - a huge lot - a lot that's a lot more than last year.
Blackstone just reported its third quarter results. Thanks to big gains in its real estate portfolio and asset sales they were very good. Blackstone people are being paid accordingly.
Blackstone doesn't disclose how many people it employs in its quarterly results. Elsewhere on its site it says it employs around 2,300 people, however. Last year, it employed around 2,200. In the first three quarter of 2017, Blackstone has accrued nearly $2bn in compensation spending. In the first three quarters of last year, it accrued nearly $1.4bn.
Here's how that plays out on a pay per head basis.
And here's how that pay is structured (also on a per head basis).
So, basically Blackstone has massively increased the amount of realized and unrealized incentive fees and carried interest it's paying. Incentive fees are bonuses and realized incentive fees are cash bonuses. "Unrealized incentive fees" are effectively deferred bonuses. Carried interest is what private equity professionals get paid when investments they've made are sold at a profit (often years later) and exceed a hurdle rate. Unrealized carried interest represents that carried interest that will be paid when existing investments which have already exceeded their hurdle rates are exited.
Even though not all of that $860k average Blackstone pay package (for the first nine months only of this year) is realized, working for Stephen Schwarzman therefore looks very lucrative. By comparison, average accrued pay at Goldman Sachs so far this year is $271k - nearly 70% less.
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