Hedge fund firm Sculptor Capital Management Inc. said its deal to be acquired by Rithm Capital Corp. will cut Chief Executive Officer Jimmy Levin’s pay, a flash point in the long-running dispute between the publicly traded hedge fund firm and its founder.
(Bloomberg) — Hedge fund firm Sculptor Capital Management Inc. said its deal to be acquired by Rithm Capital Corp. will cut Chief Executive Officer Jimmy Levin’s pay, a flash point in the long-running dispute between the publicly traded hedge fund firm and its founder.
The saga took a new turn on Sunday, when the Wall Street Journal reported that Sculptor, formerly known as Och-Ziff, rejected an unsolicited bid from a group of hedge fund giants including Boaz Weinstein, Marc Lasry and Bill Ackman. The group bid more than $12 a share, topping Rithm’s offer at $11.15 a share, the report said.
Sculptor said in its proxy statement Monday that it received 70 bids from interested suitors – including private and publicly traded alternative asset managers, financial services companies, a fintech company and others – after the hedge fund firm announced in November that it was looking for a buyer.
In July, Rithm agreed to buy Sculptor in a deal valued at about $639 million, which is set to complete in the fourth quarter. Some of the other bids gave the company a valuation of $800 million, the company said in the proxy.
Under the deal, Levin’s pay will be capped at $30 million, with half paid in cash and the rest in deferred compensation.
Och sued Sculptor in Delaware last year, demanding that the company turn over records related to Levin’s promotion to CEO and how the board determined his pay, which totaled $145.8 million in 2021. In November, the two resolved the legal dispute and Sculptor formed a special committee to explore potential transactions.
Levin’s compensation awards between 2013 and 2022 have added up to more than $300 million. Still, the firm’s sinking stock price means their value was less than half that.
Levin and other Sculptor execs will forfeit unvested stock awards for 2021, with Levin’s amounting to more than $63 million.
“Such amounts were previously reported as a material component of the executive officer’s total compensation,” the company said in the document.
It said that certain members of senior management, including Levin and Chief Operating Officer Wayne Cohen, “made long-term commitments to the Company and agreed to a 10-20% reduction in their annual compensation.”
That amounts to about $50 million less across the senior executives collectively between 2019 and 2022.
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