Carlyle Group Inc on Monday appointed former Goldman Sachs Inc executive Harvey Schwartz as its chief executive officer, taking on the tasks of driving the private equity firm’s earnings, growing its assets under management and boosting its stock price.
Schwartz’s appointment, after a six-month search, takes effect on Feb. 15. Kewsong Lee departed as CEO last August after his turnaround efforts fell short of expectations. David Rubenstein, William Conway and Daniel D’Aniello – Carlyle founders who still control 26% of the firm – also felt Lee did not adequately consult them on major decisions.
Schwartz, 58, retired as Goldman Sachs’ president and co-operating officer in 2018 after a 20-year career at the bank, where he held other leadership roles including chief financial officer and global co-head of its trading division. Unlike most Wall Street executives with Ivy League pedigrees, Schwartz graduated from Rutgers University before earning an MBA at Columbia. He joined Goldman in 1997.
He was a leading contender to replace former Goldman Sachs CEO Lloyd Blankfein, but lost out to David Solomon.
Schwartz is set to earn $1 million as base salary and up to $3 million as annual bonus. He will be granted Carlyle stock valued at $180 million on his start, regulatory filings showed.
Carlyle shares closed 2.91% lower at $36.31 per share after Monday’s announcement. Carlyle, which has $369 billion in assets under management, is set to report its fourth-quarter earnings on Feb. 7.
Investors will be watching closely how Schwartz leads Carlyle, which is seen as having underperformed its rivals Blackstone Inc, Apollo Global Management Inc and KKR & Co Inc in recent years.
“We would view the conclusion of this (CEO) search as a positive,” Jefferies analysts wrote in a note, while adding there will be a “necessary grace period to better understand any new strategic initiatives.”