Blackstone reveals $400M CEO compensation

The Blackstone Group disclosed last week that CEO Stephen Schwarzman earned about $398 million in 2006.

The information was revealed as part of Blackstone’s regulatory filings for its upcoming IPO, in which it plans to sell more than 133 million common units at between $29 and $31 per unit. This would give Blackstone a market cap in excess of $33 billion, at the top of its range. The IPO is expected to raise as much as $4.75 billion, and that will be added to the $3 billion that the firm secured in May from an investment from the Chinese government.

But that’s not all. Schwarzman is expected to receive an additional $449 million via the IPO, or up to $677 million if Blackstone’s underwriters exercise their over-allotment. And he’d still own a 24% stake in the firm (which would be valued at upwards of $8 billion).

And other top Blackstone execs aren’t doing too badly. Chairman Pete Peterson made $212.9 million last year, will receive about $1.9 billion from the IPO and will retain a 4% ownership stake. Other 2006 earnings included $97.3 million for President and COO Hamilton “Tony” James; $45.6 million for Vice Chairman J. Tomlinson Hilland; and $17.4 million for CFO Michael Puglisi.

However, all these numbers should be viewed alongside the returns that Blackstone has generated. The firm’s portfolio has grown at an average annual rate of 41% since the start of 2002 and totaled about $88.4 billion, according to a recent filing. The firm, founded in 1985, posted a near $2.3 billion profit in 2006 and made more than $1.1 billion in the first quarter of this year. —Dan Primack
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