Blackstone and the NYPL’s $100 million gift…

March 13, 2008

images-12.jpegBlackstone (BX) filed its first 10-K yesterday morning and given its year-end results, not to mention its sagging stock price, it’s not surprising that the company spent 27 pages highlighting potential risk factors. Among our favorites is the one where Blackstone warns about the difficulty of sustaining growth as a public company:

These requirements may place a strain on our systems and resources. The Exchange Act requires that we file annual, quarterly and current reports with respect to our business and financial condition. The Sarbanes Oxley Act requires that we maintain effective disclosure controls and procedures and internal controls over financial reporting, which is discussed below. In order to maintain and improve the effectiveness of our disclosure controls and procedures, significant resources and management oversight are required. We have implemented and continue to implement additional procedures and processes for the purpose of addressing the standards and requirements applicable to public companies.

Blackstone’s 10-K also reignited debates about its compensation and tax policies. Both the WSJ and Dow Jones were quick to report that co-founders’, Steve Schwarzman and Pete Peterson received ‘cash distribution’_ receipts of $350.2 million and $171.5 million, respectively. Though that’s lower than last year, these figures are still mind-boggling, especially given the company’s performance. Moreover, Schwarzman was taxed at the 15% capital gains tax rate rather than the 35% individual tax rate on his $350 million take-home.
Given these numbers, is it any surprise that earlier in the week, Schwarzman announced a $100 million gift to the New York Public Library? It’s hard to believe that the timing was a mere coincidence.

Leave a Reply

You must be logged in to post a comment.