Private equity firm Carlyle Group LP disclosed that it will pay Mike Cavanagh, a former JPMorgan Chase & Co executive, $7 million per year in his first three years in office as its co-president.
Cavanagh will also be entitled to restricted shares worth $32 million as a compensation for the JPMorgan’s stock that he relinquished his right to. He is also eligible for a stake in the firm’s carried interest, or future investment profits.
Washington-based Carlyle, which is the world’s second-largest alternative assets investors, disclosed the details in a regulatory filing on Friday. Cavanagh earned around $17 million last year for his service to JPMorgan, a source with direct knowledge of the matter told Bloomberg.
Cavanagh, who will join Carlyle later in the year, will earn an annual salary of$275,000, besides a minimum bonus of $2.725 million, $2 million in restricted shares each year for the next three years and a signing bonus valued at $2 million. He will also be granted 933.416 restricted shares, whose stock closed at $34.30 yesterday.
In contrast, Cavanagh earned a salary of $750,000 and $10 million worth of stock, with the remainder being cash bonuses at JPMorgan.
Cavanagh will be the co-president and co-chief operating officer, together with Glenn Youngkin, who has worked with the firm for 19 years. Senior private equity executives usually earn more from dividends on stock owned rather than from compensation.
Carlyle’s co-founders dividend $279 million amongst themselves last year, with 99 percent of this amount in stock dividends. Youngkin earned $22 million in 2013, out of which $11.5 million came from dividends on partnership shares and common stock.
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