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.
Under the deal, Levin’s pay will be capped at $30 million, with half paid in cash and the rest in deferred compensation, the company said in a proxy statement filed Monday. In July, Rithm agreed to buy Sculptor in a deal valued at about $639 million, which is set to complete in the fourth quarter.
Sculptor and Levin had been battling Dan Och, who founded the firm previously known as Och-Ziff, over Levin’s pay.
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.
Shares of Sculptor climbed 5.5% to $11.82 at 11:51 a.m. in New York, extending their gain this year to 36%. They have still lost more than half their value over the past two years.
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.
On Sunday 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 had contact with 70 interested suitors after the hedge fund firm announced in November that it was looking for a buyer.
(Updates with share price in sixth paragraph. An earlier version of this story was corrected to remove number of bids in last paragraph.)
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.