Sculptor Capital Management chief executive officer James Levin made more than $127 million last year… or was it closer to $147 million? It all depends upon which compensation table you consult.
Either way, there’s more than the usual interest in Levin’s earnings this year, after director Morgan Rutman resigned in February and complained about Levin’s compensation in a letter to the board.
Rutman warned that Levin’s comp would “almost certainly exceed $100 million and may very well approach $200 million” in 2021, adding that even under a conservative base case, the firm would still be compensating Mr. Levin at a level that is “exceedingly rare.”
Why two different numbers?
Once again, the only U.S.-listed hedge fund firm included two different sets of compensation figures for its seven named executives in its proxy made public on Friday. One is calculated the way the SEC requires companies to do it, while the other is calculated in a way that Sculptor feels better reflects annual comp.
Under the SEC’s preferred method, Levin once again did not receive a salary. He received a $4 million bonus, down from $7 million in 2020. However, Levin received nearly $76 million in stock awards, most of which was granted on December 17, 2021, primarily in the form of restricted stock.
Levin also received nearly $66 million in what Sculptor calls “all other compensation.” This reflects a roughly $63.9 million payment of the cash portion of the Annual Fund Performance Payment, with the remaining being the vested portion of the 2020 annual bonus awarded in the form of deferred cash interests (DCIs).
Robert Shafir, who was replaced by Levin on April 1, 2021, still earned $12.7 million. About three-quarters of that total resulted from “all other compensation,” including DCIs and other cash payments.
Of the remaining five named executives included in the compensation table, president Wayne Cohen made $17.6 million, nearly three-quarters of it from stock awards. Chief financial officer Dava Ritchea made more than $7 million, chief legal officer David Levine made $4.7 million, chief accounting officer Hap Pollard earned more than $2.3 million, and former CFO Thomas Sipp made close to $540,000.
The numbers are a little different when Sculptor’s method for calculating compensation is used. The firm claims that its approach is “more reflective of year-over-year changes” to compensation and is “intended to show how we measure total compensation for our Named Executive Officers across different periods.”
In Levin’s case, Sculptor’s preferred method showed that he earned a little more than $127 million. That included the $4 million bonus plus a $26.5 million deferred bonus, a category not included in the SEC preferred compensation table. Sculptor explained that the “Deferred Bonus” column for 2021 reflects the portion of the 2021 annual bonuses payable in the form of cash-settled restricted stock units (RSUs) and Restricted Class A Shares.
Levin also earned more than $3.7 million from Special Long-Term Awards whose value is at realization, according to the firm’s method. Sculptor then figured that more than $93 million came from “other compensation,” which included nearly $64 million paid in cash, $14.5 million awarded under the 2013 Incentive Plan and cash-settled RSUs, and deferred cash interests awarded under the DCI Plan of $14.5 million.
Under Sculptor’s preferred method, Shafir made more than $32 million, Cohen made $10.55 million, Ritchea earned $4.3 million, Sipp earned $2.855 million, Levine made $2.77 million, and Pollard earned $1.55 million.
