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Annals of Wealth (part 4)

March 13, 2008

Money_treeThe big philanthropy news on Tuesday, as reported in the New York Times and elsewhere, was that Wall Street financier Stephen A. Schwarzman, CEO of the Blackstone Group, one of the world's largest private equity firms, had agreed "to jump-start a $1 billion expansion of the [New York public] library system with a guaranteed $100 million of his own" -- the largest gift in the library's  history.

Yesterday, the Associated Press and Wall Street Journal (but not the Times, which waited until today) reported that Mr. Schwarzman received $350.7 million in compensation in 2007, making him one of the highest-paid executives on Wall Street. That was in addition to the $4.77 billion in stock Schwarzman received in June through the initial public offering of Blackstone's management division. According to the Times, 25 percent of those shares vested immediately, generating a tidy return of about $1.2 billion, while the remaining shares will vest in equal installments over four years.

Since the IPO -- which happened just weeks before the onset of the credit crunch in U.S. debt markets -- shares of Blackstone have fallen from the initial offering price of $31 to about $16.

As they say in that television commercial, you can't make this stuff up.

-- Mitch Nauffts

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