Harvey M. Schwartz
Carlyle GroupAbout Harvey M. Schwartz
Harvey M. Schwartz, age 61, is Chief Executive Officer of Carlyle and a member of the Board since February 15, 2023; he previously served as President and Co-Chief Operating Officer and as CFO at Goldman Sachs (1997–2018), with earlier roles at J.B. Hanauer, First Interregional Equity Corporation, and Citigroup. He holds a BA from Rutgers University and an MBA from Columbia University . Under his tenure, Carlyle delivered 2024 TSR of 28% and achieved >50% TSR from his start date through December 31, 2024; 2024 Net Income was $1,091.1 million and Fee Related Earnings (FRE) were $1,104.6 million, supporting pay-for-performance alignment .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Goldman Sachs | President & Co-Chief Operating Officer; Chief Financial Officer; Global Co-Head of Securities Division | 1997–2018 | Senior operating leadership at a complex global institution; deep finance and markets expertise |
| J.B. Hanauer & Co.; First Interregional Equity Corp. | Early career roles | Pre-1989 | Foundational experience in securities; progression into structured products |
| Citigroup | Credit training program; specialized in structuring commodity derivatives | From 1989 | Technical structuring and risk skills relevant to financial services |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| One Mind (nonprofit) | Board member | Current | Advocacy and research in brain health; stakeholder engagement |
| SoFi Technologies, Inc. | Director | May 2021–Nov 2024 | Public company board experience; fintech exposure |
Fixed Compensation
| Metric | 2023 | 2024 |
|---|---|---|
| Base Salary ($) | $838,462 | $1,000,000 |
| Target Bonus ($) | $3,000,000 target for 2023 program; 2024 target explicitly set at $3,000,000 (300% of salary) | $3,000,000 target; maximum $6,000,000 |
| Annual Bonus Paid ($) | $6,000,000 | $6,000,000 |
| All Other Compensation ($) | $174,597 | $76,766 (personal car service) |
| Total Compensation ($) | $186,994,098 | $29,590,176 |
Performance Compensation
Annual Performance Bonus Structure and Outcome (2024)
| Component | Weighting | Target/Scale | Actual Achievement | Payout Contribution |
|---|---|---|---|---|
| Financial metric: FRE | 50% | Threshold 50%, Target 100%, Max 200% | 200% achievement | 100% of total opportunity via FRE portion |
| Leadership/Org Design | 16.7% | 0–200% qualitative | Part of 200% overall rating | Included in 50% qualitative bucket |
| Compensation Strategy | 16.7% | 0–200% qualitative | Part of 200% overall rating | Included in 50% qualitative bucket |
| Business Development Initiatives | 16.7% | 0–200% qualitative | 200% (examples: semi-liquid offerings, wealth platform build, insurance AUM to $77B; $19B commitments; enhanced stakeholder engagement) | Included in 50% qualitative bucket |
| Final Weighted Achievement | — | — | 200% overall | $6,000,000 bonus |
Equity Awards and Vesting Mechanics
2024 Stock Price Appreciation PSU Award (granted 2/14/2024)
- Tranches: 3 equal tranches; vest based on 30-trading-day average price hurdles and service through 2/14/2025, 2/14/2026, 2/14/2027 .
- Price hurdles: $48.76; $56.88; $65.01; performance period 2/14/2024–2/14/2027 .
- PSU counts: Threshold 243,784; Target 731,351; Max 731,351; grant-date fair value $22,513,410 .
- First tranche earned by year-end 2024; vested 2/14/2025 upon service condition .
2023 CEO Sign-On Awards (inducement under Nasdaq Rule 5635(c)(4))
- Sign-On RSUs: 2,031,602 time-vesting RSUs; dividend equivalents; two upcoming vest tranches 547,042 on 12/15/2025 and 547,041 on 12/15/2026 .
- Sign-On PSUs: 4,730,617 performance-vesting RSUs requiring both absolute stock price appreciation over 5 years (110% for full vest) and relative TSR at ≥60th percentile vs S&P 500 Financials; performance period through 1/31/2028; dividend equivalents accrue .
- As of 12/31/2024: 1,019,040 Sign-On PSUs earned (second stock price target achieved 12/11/2024), vested 2/1/2025 upon service condition .
Outstanding Unvested Equity at 12/31/2024
| Category | Units Unvested (#) | Market Value ($) |
|---|---|---|
| Time-vesting RSUs (incl. sign-on RSUs/dividend equivalents) | 2,356,906 | $119,000,184 |
| Equity incentive PSUs (incl. sign-on PSUs/dividend equivalents) | 3,544,681 | $178,970,944 |
Retention Requirements
- Stock Price Appreciation PSUs: 30% of vested shares generally must be retained until the earlier of 1-year post-termination or 3 years after delivery .
- Sign-On Awards: Retain 25% of net after-tax shares until termination or change in control .
Equity Ownership & Alignment
| Data Point | Value |
|---|---|
| Beneficial Ownership (shares) | 1,489,265; <1% of outstanding |
| CEO Stock Ownership Guideline | Must beneficially own ≥$10 million; counts time-based RSUs/DSUs; excludes performance-vesting awards; expected compliance within 5 years |
| Compliance Status (12/31/2024) | All covered executive officers in compliance except Ms. LoBue (phase-in); implies Schwartz in compliance |
| Hedging/Pledging Policy | Hedging and short positions prohibited; pledging requires prior written consent; only Co-Founder Rubenstein has pledged shares; no other executives or Board members currently have pledged Carlyle securities |
Signals for Insider Selling Pressure
- 2025–2026 sign-on RSU vesting tranches: 547,042 (12/15/2025) and 547,041 (12/15/2026); creates potential sale windows, though ownership guidelines and retention requirements temper immediate selling .
- Ongoing PSU tranches for 2026–2027 subject to stock price hurdles and service; vesting tied to performance, reducing forced selling and aligning with TSR .
Employment Terms
| Term | Base Case (No CIC) | Change-in-Control (Double Trigger) |
|---|---|---|
| Severance (cash) | 1.5× (base + target bonus) + prorated target bonus; paid within 60 days post-termination; example at 12/31/2024: $9,000,000 | 2.0× (base + target bonus) + prorated target bonus; example at 12/31/2024: $11,000,000 |
| COBRA Subsidy | Monthly subsidy or taxable monthly payment ($987.06 at 2024 rates) | Same subsidy eligibility |
| RSU Treatment | Sign-On RSU: immediate vest of next scheduled tranche upon qualifying termination; forfeiture of remainder | During CIC Period: immediate vest of any outstanding/unvested Sign-On RSU; 1,094,083 RSUs would vest at $50.49 = $55,240,251 at 12/31/2024 |
| PSU Treatment | Immediate vest of tranches with achieved performance targets; post-termination measurement window (45 trading days) for targets achieved after termination; pro-rata eligibility on remaining tranches through 1/31/2028 | If performance satisfied by CIC measurement date, such tranches vest; example: 1,019,040 PSUs would vest valued at $51,451,330 at 12/31/2024 |
| Death/Disability | Prorated target bonus (example: $3,000,000 at 12/31/2024); immediate vesting of certain sign-on RSU and partial PSU tranches per formula | |
| Restrictive Covenants | 12-month non-compete and non-solicit of employees/investors/transactions; confidentiality; cooperation; mutual non-disparagement | |
| Clawbacks | Dodd-Frank compliant policy plus broader recoupment for detrimental activity; executive ownership/retention requirements |
Board Governance
- Board service: CEO and Director; not independent; “Committees: None” designated for Schwartz .
- Lead Independent Director: Mark S. Ordan (as of March 10, 2025), providing oversight and presiding over executive sessions; strong independent committee structure (Audit, Compensation, Nominating & Governance) .
- Board/committee meetings 2024: Board 7; Audit 10; Compensation 6; Nominating & Governance 3; all incumbent directors attended ≥75% of meetings; independent directors meet in executive session without management .
- Director compensation: Employees/advisors receive no additional remuneration for director service; non-employee director retainer rates and RSU grants are disclosed, but not applicable to Schwartz as CEO .
- Director stock ownership guidelines (non-employee directors): 5× cash retainer within 5 years; not applicable to Schwartz; executive ownership guidelines apply separately .
Say-on-Pay & Shareholder Feedback
- 2024 say-on-pay approval: 81% in favor, up from 68% in 2023; reflects responsiveness to shareholder feedback and alignment of PSU structures with rigorous stock price targets and relative TSR .
- Ongoing shareholder engagement: 60% of shares contacted; 51% engaged; 63% of meetings with Board participation .
Compensation Structure Analysis
- Variable/at-risk mix: 96.4% of CEO 2024 compensation is variable/at-risk; majority delivered in equity; PSU hurdles require 60% appreciation for full vest under the 2024 program, and 110% absolute appreciation plus ≥60th percentile relative TSR for full sign-on PSU vest .
- Governance safeguards: Prohibited hedging/shorting; pledging only with consent; no excise tax gross-ups; clawbacks exceed Dodd-Frank mandates; ownership and retention requirements reduce near-term selling pressure .
- Equity program recalibration: Stock Price Appreciation PSU Award Program implemented in 2024 to reinforce alignment with shareholder value creation and incorporate shareholder feedback .
Investment Implications
- Alignment strong: Cash bonus is tightly linked to FRE and qualitative strategic milestones; equity incentives tied to absolute and relative TSR drive stock price appreciation and shareholder-aligned outcomes .
- Overhang vs retention: Large unvested RSU/PSU balances create potential supply overhang as tranches vest (notably in Dec 2025/2026 and annual PSU tranches), but retention requirements (25%/30%) and executive ownership guidelines mitigate immediate sell pressure .
- Downside protection: No tax gross-ups; double-trigger CIC severance at 2× base+target; robust non-compete and clawbacks reduce adverse alignment risks; no pledging by Schwartz (policy restricts, only co-founder pledged with governance oversight) .
- Pay-for-performance validated: Say-on-pay approval improved to 81% as investors endorsed the redesigned PSU framework; watch TSR and PSU hurdle attainment for trading signals around vest dates; monitor FRE and Net Income trajectories to anticipate bonus variability .
Key upcoming dates that could influence trading dynamics:
- 12/15/2025 and 12/15/2026: Sign-on RSU tranches of 547,042 and 547,041 eligible to vest .
- Annual PSU vesting windows each February (subject to price hurdles and service); first tranche already vested 2/14/2025 .