Onex Corp., Canada’s largest buyout firm, paid Chief Executive Officer and founder Gerald Schwartz $85.3 million in 2013 compensation, higher than payouts for the top executives of Walt Disney Co., Coca-Cola Co. and Visa Inc. combined.
Schwartz, 72, received an annual salary of $1.3 million, a bonus of $24.4 million and $59.6 million in stock options -- his first stock-option award in a decade -- the Toronto-based firm said in an April 7 filing with Canadian regulators. By comparison, Walt Disney CEO Robert Iger was paid $34.3 million in annual compensation, while Visa’s top executive Charles Scharf received $24.2 million and Coca-Cola CEO Muhtar Kent got $20.4 million.
“The committee and the board are of the view that stock options are an integral part of executive compensation and are fundamental to the alignment of interests and the incentivization of future performance,” Onex said in its filing, as an explanation for awarding Schwartz 3,950,000 options.
A message left with Onex spokeswoman Emma Thompson wasn’t immediately returned.
Schwartz’ pay is more than any executive in the Standard and Poor’s 500 Index this year, including Tim Cook, who received compensation of $4.3 million as chief executive of Apple Inc., the U.S.’s biggest company by market value, according to data compiled by Bloomberg. The data ranks the highest-paid executives as reported in the summary compensation table for S&P 500 companies with a fiscal year-end of Sept. 1, 2013 or later, and have filed proxy statements for 2013 as of the market close yesterday.
Onex said in its filing that Schwartz last received options in early 2004 and exercised those last year, shortly prior to their expiry. As a result, Schwartz ceased to hold any options to buy Onex shares.
Onex has gained 26 percent over the past 12 months, compared with a total return of 18 percent for the S&P/TSX Composite Index.
Schwartz also received $28.5 million in carried interest payments, or his slice of investment profits, as well as $12.5 million from co-investments made with Onex, the filing said. He also received about $2.8 million in dividend payouts from owning 20.1 million shares, according to calculations by Bloomberg. That would lift Schwartz’s total from pay, investments and dividends to about $129 million.
Blackstone Group LP chief Steve Schwarzman received $374.5 million last year in pay and cash dividends, according to a Feb. 28 company filing. Schwarzman was paid a $350,000 salary and got $21.6 million in carried interest. He received $352.5 million in cash distributions during the year from ownership of partnership units in the New York-based firm he co-founded in 1985 as a leveraged-buyout group.
Onex awarded stock options to senior managing directors due to an “evolution” in the company’s management structure. The firm last year appointed four senior managing directors -- Ewout Heersink, Robert Le Blanc, Seth Mersky and Anthony Munk -- along with Schwartz to a newly formed executive committee, to help the CEO guide the strategic direction of the firm. Le Blanc, Mersky and Munk received a one-time grant of 850,000 options to buy subordinate voting shares, the filing said.
“These option grants do not represent a routine practice of the committee or the board, but rather were intended to acknowledge an expectation as to the senior managing directors’ future contribution to growth and management of the firm,” the filing said.
Le Blanc’s total compensation was $23.3 million, while Munk was paid $19 million and Seth Mersky received $17.3 million, the filing said.
Summary compensation tables are mandated by the U.S. Securities and Exchange Commission and show some awards in the year they’re granted rather than for the year they’re earned. Some awards are restricted, vesting and paying out over a set time frame, and the receipt of others may depend on future performance goals. The summary compensation table also counts changes in pension and the value of perks.