Aug. 14 (Bloomberg) -- Blackstone Group LP Chief Executive Officer Stephen Schwarzman’s $702 million compensation made him the highest-paid executive in the U.S. last year, the Corporate Library reported.

The package for Schwarzman included $2.3 million of compensation and almost $699.8 million from the vesting of one- quarter of the equity granted as he took the firm public at $31 a share in 2007, said the Portland, Maine-based Corporate Library. Schwarzman, Blackstone’s founder, was granted $4.7 billion in equity at the time of the offering, said the Corporate Library, which specializes in governance issues.

Schwarzman, 62, took the world’s largest private equity firm public at the height of the market boom. His pay package toppled Oracle Corp. CEO Larry Ellison, 64, who fell to second with $557 million, according to the survey. Ellison had $543 million in exercised stock options. His total compensation in 2007 was $193 million, according to the survey.

“Given that the other 75 percent of his $4.7 billion 2007 equity grant will vest in equal installments over the next four years, it is reasonably safe to assume that Mr. Schwarzman will remain at the top of highest-paid CEOs list, or close to it, for a few years to come,” the report said.

Peter Rose, a spokesman for New York-based Blackstone, said it was “absurd” for the Corporate Library to call Schwartzman the highest paid CEO based on how the firm accounted for the vesting of his equity ownership after the IPO.

Assuring Investors

“The accounting charge has nothing to do with Steve’s compensation (which was a total of $350,000 in 2008),” Rose said in an e-mail. Schwarzman agreed to the vesting of his stake “to assure IPO investors of his commitment to remain at the firm,” Rose said.

A call to Oracle wasn’t immediately returned.

Seven of the top-paid executives sat atop energy companies. Ray Irani of Occidental Petroleum Corp. made $222.6 million, John Hess of Hess Corp. earned $159.6 million and Michael D. Watford of Ultra Petroleum Corp. took in $116.9 million, the report said. Seven of the 10 on the list made more than $100 million last year.

Schwarzman isn’t among managers whose pay is subject to review by Kenneth Feinberg, the Obama administration’s “special master” on executive pay. Feinberg is due to receive compensation proposals today from Citigroup Inc., American International Group Inc., Chrysler LLC, Chrysler Financial Corp., Bank of America Corp., GMAC Inc. and General Motors Corp.

Feinberg’s Review

The companies must tell him how they plan to pay the 25 top-earning employees. Feinberg will rule on the plans within 60 days after they’re completed.

Governments worldwide are examining the pay of bankers, which some lawmakers have blamed for fueling the worst financial crisis since the Great Depression. The U.K.’s financial regulator told British banks this week to comply with new rules to limit bonus payments. Swiss lawmakers rejected a plan to limit pay at UBS AG after the bank posted a record loss.

Blackstone fell 9 cents, or 0.6 percent, to $14.32 in New York Stock Exchange composite trading at 9:31 a.m. The shares doubled this year. Oracle dropped 1 cent to $21.98 in Nasdaq Stock Market trading. The shares climbed 24 percent this year.

To contact the reporter on this story: Dakin Campbell in San Francisco at dcampbell27@bloomberg.net

Last Updated: August 14, 2009 09:37 EDT