In what could be a record payday for a public company executive, Fortress Investment Group, the hedge fund manager which floated in New York last year, has given one of its star traders more than US$300 million ($430.6 million) to stay.
Wall St is agog at the revelation
that Adam Levinson, 38, who runs one of the main funds for Fortress, has been handed a giant slug of new shares, giving him a stake of up to 7 per cent and diluting the power of existing shareholders.
The award comes despite disappointing returns from his global macro fund this year, one of the hardest on record for hedge funds. It also comes as Fortress shares languish at all-time lows, having lost more than two-thirds of their value since they began trading in February 2007.
Levinson has defended the award, saying he works practically 24 hours a day, putting in more than 12 hours at the office and taking calls through the night.
"On a good day, it's a couple of calls overnight," he told the Wall Street Journal.
The grant of 31 million shares will vest over time, as long as Levinson continues to work for Fortress, and he has given up part of his profit-sharing deal on the funds he runs at the group.
Nonetheless, with a value of US$315 million at current prices, the award catapults him to the top of the executive pay league tables. Even Merrill Lynch boss John Thain, who was the top-earning chief executive in corporate America last year, was paid just US$84 million, most of which was a signing-on bonus.
Lloyd Blankfein, chief executive at Goldman Sachs, where Levinson once worked as a trader, was paid US$54 million last year.
The share award has been savaged by analysts and some investors, but Fortress executives have privately explained Levinson's remunerationas the price of staying competitive with the privately owned hedge fund world.
The riches available in private funds, or if Levinson had decided to set up on his own, could run into billions, and the grant of a 7 per cent slug of the firm brings him alongside its five existing controlling shareholders.
- INDEPENDENT
