DEF 14A of GCM Grosvenor Inc.
Filed Apr 25, 2024 · FY20230001140361-24-022079
PROPOSAL 1 - ELECTION OF DIRECTORS
PROPOSAL 1 - ELECTION OF DIRECTORS At the Annual Meeting, seven (7) directors are to be elected to hold office until the Annual Meeting of Stockholders to be held in 2025 and until each such director’s respective successor is elected and qualified or until each such director’s earlier death, resignation or removal. We currently have seven (7) directors on our Board. Our current directors, who are also director nominees for election at the Annual Meeting, are Michael J. Sacks, Angela Blanton, Francesca Cornelli, Jonathan R. Levin, Stephen Malkin, Blythe Masters and Samuel C. Scott III. The Board has nominated each of the foregoing director candidates to serve as directors until the 2025 Annual Meeting. The proposal regarding the election of directors requires the approval of a plurality of the votes cast. This means that the seven (7) nominees receiving the highest number of affirmative “FOR” votes will be elected as directors. Votes withheld and broker non-votes are not considered to be votes cast and, accordingly, will have no effect on the outcome of the vote on this proposal. Upon consummation of the Business Combination, we entered into the Stockholders’ Agreement with the GCMH Equityholders and GCM V, pursuant to which, among other things, (i) GCM V was granted rights to designate all seven directors for election to our Board (and GCM V and the GCMH Equityholders will vote in favor of such designees) and (ii) GCM V and the GCMH Equityholders agreed to vote their voting shares in favor of any recommendations by our Board until the Sunset Date. As a result of the Stockholders’ Agreement and the aggregate voting power of the parties to the agreement, we expect that the parties to the agreement acting in conjunction will control the election of directors at GCM. For more information, see “Corporate Governance—Stockholders Agreement.” In accordance with our Charter and Bylaws, the Board will stand for election for one-year terms that expire at the following year’s annual meeting. Pursuant to our Charter, the total number of directors constituting the Board shall be not less than three (3) and not more than twenty (20), with the then-authorized number of directors being fixed by the Board from time-to-time, which number is currently seven (7) members. Subject to obtaining any required stockholder votes or consents under the Stockholders’ Agreement (or complying with any stockholders’ designation rights under our Stockholders’ Agreement), newly created directorships resulting from any increase in the authorized number of directors or any vacancies on the Board resulting from death, resignation, retirement, disqualification, removal from office or other cause shall be filled solely by the affirmative vote of the remaining directors then in office, even if less than a quorum of the Board. Subject to obtaining any required stockholder votes or consents under the Stockholders’ Agreement, our directors may be removed from office at any time, with or without cause and only by the affirmative vote of the holders of a majority of our outstanding common stock entitled to vote in the election of directors. The current members of the Board who are also nominees for election to the Board as directors are as follows:
PROPOSAL 1 - ELECTION OF DIRECTORS
| Name | Age | Position with the Company | | Michael J. Sacks | 61 | Chairman of the Board and Chief Executive Officer | | Jonathan R. Levin | 42 | President and Director | | Angela Blanton | 53 | Director | | Francesca Cornelli | 61 | Director | | Stephen Malkin | 62 | Director | | Blythe Masters | 55 | Director | | Samuel C. Scott III | 79 | Lead Independent Director |
PROPOSAL 1 - ELECTION OF DIRECTORS
The principal occupations and business experience, for at least the past five years, of each director nominee for election at the Annual Meeting are as follows:
Michael J. Sacks
Michael J. Sacks Michael J. Sacks has served as our Chief Executive Officer and Chairman of our Board since our formation in July 2020. Mr. Sacks is also GCM Grosvenor’s Chief Executive Officer, having joined GCM Grosvenor in 1990 and soon after being named its Chief Executive Officer in 1994. Under Mr. Sacks’ leadership, GCM Grosvenor grew from its position as an early participant in a cottage industry to its current position as one of the largest independent open architecture alternative asset platforms. Mr. Sacks is engaged civically serving on a number of nonprofit boards. He graduated from Tulane University with a B.S. in Economics and holds a general course certificate from the London School of Economics. In addition, Mr. Sacks holds an M.B.A. from the Kellogg Graduate School of Management at Northwestern University and a J.D. from Northwestern University’s Pritzker School of Law. Mr. Sacks is well qualified to serve on our Board because of his experience with GCM and GCM Grosvenor, including in his capacity as Chief Executive Officer of each entity.
Jonathan R. Levin
Jonathan R. Levin Jonathan R. Levin has served as our President since our formation in July 2020 and as a member of our Board since November 2020. Mr. Levin joined GCM Grosvenor in 2011 and became its President in 2017. Mr. Levin, in addition to his managerial responsibilities, serves on a number of our Investment Committees. Prior to joining GCM Grosvenor, Mr. Levin was the Treasurer and Head of Investor Relations at Kohlberg Kravis Roberts & Co. (“KKR”), where he worked from 2004 to 2011, where he was responsible for managing KKR’s balance sheet investments, engaging with public investors and industry analysts, and leading strategic projects. Prior to his role as Treasurer and Head of Investor Relations, Mr. Levin worked in KKR’s private equity business and focused on investments in the financial services industry. Mr. Levin began his career as an Analyst in the private equity group of Bear Stearns. Mr. Levin holds an A.B. in Economics from Harvard College and is a member of the board of directors of the Ann & Robert H. Lurie Children’s Hospital of Chicago, the Museum of Contemporary Art Chicago, and the Francis W. Parker school. Mr. Levin is well qualified to serve on our Board because of his experience with GCM and GCM Grosvenor, including in his capacity as President of each entity, and his experience in the asset management industry.
Angela Blanton
Angela Blanton Angela Blanton has served as a member of our Board since November 2020. Ms. Blanton has served as Carnegie Mellon University’s Vice President for Finance and Chief Financial Officer since 2017 after serving as interim Vice President and Chief Financial Officer in 2016. Ms. Blanton has over 20 years of experience spanning finance, project management and engineering disciplines within the higher education, financial services and manufacturing industries. Prior to joining Carnegie Mellon, Ms. Blanton was Chief Financial Officer for PNC Investments Brokerage from February 2015 to December 2015. Ms. Blanton serves on the boards of Pittsburgh Public Theater, where she serves as the Chair and on the Inclusive & Equitable Economy Committee for the Pennsylvania Economy League of Greater Pittsburgh (PELGP). Ms. Blanton received a B.S. in electrical engineering from the University of Michigan and her M.B.A. from the Tepper School of Business at Carnegie Mellon University. We believe Ms. Blanton is well qualified to serve on our Board because of her experience as a chief financial officer and in the financial services industry.
Francesca Cornelli
Francesca Cornelli Francesca Cornelli has served as a member of our Board since November 2020. Dr. Cornelli is the dean of Northwestern University’s Kellogg School of Management, a position she has held since August 1, 2019. She is also a professor of finance and holds the Donald P. Jacobs Chair in Finance. Prior to that, she was a professor of finance and deputy dean at London Business School from 1994 to 2019. Dr. Cornelli’s research interests include corporate governance, private equity, privatization, bankruptcy, IPOs and innovation policy. She has been an editor of the Review of Financial Studies and an associate editor at the Journal of Finance. She is a research fellow at the Center for Economic and Policy Research, and previously served as a director of the American Finance Association. Dr. Cornelli has previously taught at the Wharton School of the University of Pennsylvania, the Fuqua School of Business at Duke University, The London School of Economics, the Indian School of Business in Hyderabad and the New Economic School in Moscow. She has also served as an independent board member of several global corporations, including Ryan Specialty Holdings, Inc. since July 2023, Banca Intesa SanPaolo from 2016 to 2019, Telecom Italia from 2014 to 2018, and Swiss Re International and Swiss Re Holdings from 2013 to 2019. In January 2016 she helped create and became a board member of AFFECT, a committee of the American Finance Association designed to promote the advancement of women academics in the field of finance. We believe Dr. Cornelli is well qualified to serve on our Board due to her experience as an academic in finance and governance, and her experience on boards of directors of other companies.
Stephen Malkin
Stephen Malkin Stephen Malkin has served as a member of our Board since November 2020. Mr. Malkin is President of Ranger Capital Corporation, a position he has held continuously since departing from his position as a senior executive of GCM Grosvenor in 2005. Mr. Malkin was associated with GCM Grosvenor from 1992 through 2005, during most of which time he served on GCM Grosvenor’s Management Committee and shared management responsibilities with Mr. Sacks. Mr. Malkin was also a member of GCM Grosvenor’s Absolute Return Strategies Investment Committee and shared responsibility for portfolio management as well as the evaluation, selection, and monitoring of various Absolute Return Strategies investments. Prior to his role with GCM Grosvenor, from 1988 through 1991, Mr. Malkin worked in various management positions for JMB Realty Corporation, focusing on non-real estate corporate acquisition opportunities. From 1983 to 1986, Mr. Malkin was an analyst with Salomon Brothers Inc. in Chicago and Tokyo. He received a B.B.A. from the University of Michigan and an M.B.A. in Finance from the Wharton School of the University of Pennsylvania. We believe Mr. Malkin is well qualified to serve on our Board because of his management and investment experience with GCM Grosvenor, including as a former GCM Grosvenor Management Committee member and Absolute Return Strategies Investment Committee member, and his experience as an investment professional with over 35 years’ experience.
Blythe Masters
Blythe Masters Blythe Masters has served as a member of our Board since November 2020. Ms. Masters is an experienced financial services and technology executive and currently a Founding Partner at the private equity and venture capital firm Motive Partners. From March 2015 until December 2018, she was the Chief Executive Officer of Digital Asset Holdings. Ms. Masters was previously a senior executive at J.P. Morgan, which she left in 2014 following the sale of the physical commodities business that she built. Ms. Masters was a member of the Corporate & Investment Bank Operating Committee and the firm’s Executive Committee. Positions at J.P. Morgan included Head of Global Commodities, Head of Corporate & Investment Bank Regulatory Affairs, Chief Financial Officer of the Investment Bank, Head of Global Credit Portfolio and Credit Policy & Strategy, Head of North American Structured Credit Products, Co-Head of Asset Backed Securitization and Head of Global Structured Credit. Ms. Masters has held a number of board positions throughout her career. She currently serves on the board of directors of Forge Global Holdings, Inc., CAIS and SymphonyAI. She is an advisory board member of the US Chamber of Digital Commerce, Figure Technologies and SandboxAQ. She is a member of P.R.I.M.E. Finance (the Hague-based Panel of Recognized International Market Experts in Finance). She previously served on the board of directors of Credit Suisse Group from April 2021 to March 2023 including as chair of its Digital Transformation and Technology Committee, member of its Governance and Nominations Committee, Compensation Committee and Risk Committee and chair of its US holding company Credit Suisse Holdings (USA), Inc., as chair of the board of directors of Santander Consumer USA Holdings from June 2015 to July 2016, as chair of the board and audit committee of Phunware having served on this board from December 2019 to April 2021, as board member of A.P. Moller Maersk from 2020 to 2022, as Chief Executive Officer and board member of Motive Capital Corp from 2021 to 2022 and President of Motive Capital Corp II from 2022 to 2023. She is the former chair of the Global Financial Markets Association (GFMA), having served on this board from 2009 to 2014, former chair of the Securities Industry and Financial Markets Association (SIFMA) having served on this board from 2004 to 2014, and former chair of the Linux Foundation’s Hyperledger project. Ms. Masters has a B.A. in economics from the University of Cambridge. We believe Ms. Masters is well qualified to serve on our Board due to her expertise in the financial, banking and fintech sectors and her experience on boards of directors of other companies and organizations.
Samuel C. Scott III
Samuel C. Scott III Samuel C. Scott III has served as a member of our Board since November 2020. Prior to his retirement in 2009, Mr. Scott served as Chairman and Chief Executive Officer, since 2001, and President and Chief Operating Officer, since 1997, of Corn Products International, Inc., a leading global ingredients solutions provider now known as Ingredion Incorporated. Mr. Scott previously served as President of CPC International’s Corn Refining division from 1995 to 1997 and President of American Corn Refining from 1989 to 1997. In addition to his public board service, Mr. Scott also serves on the board of The Chicago Council on Global Affairs, the Board of Trustees of the Ringling College of Art and Design, the board of the Sarasota Memorial Hospital Foundation and the board of the American Business Immigration Coalition. Mr. Scott served on the board of directors of BNY Mellon from 2003 to 2022, where he served as a member of its Audit Committee, its Human Resources and Compensation Committee and its Corporate Governance, Nominating & ESG Committee. Mr. Scott served on the board of Motorola Solutions, Inc. from 1993 until 2019 and was its lead director from 2015 to 2019. Mr. Scott also served on the board of Abbott Laboratories from 2007 until 2020. Mr. Scott received both a Bachelor of Science degree and a Master in Business Administration degree from Fairleigh Dickinson University. We believe Mr. Scott is well qualified to serve on our Board due to his experience as an executive and on boards of directors of other companies.
Samuel C. Scott III
| Board Diversity Matrix (As of April 25, 2024) | | | | | | Total Number of Directors | 7 | | | | | | Female | Male | Non-Binary | Did Not Disclose Gender | | Part I: Gender Identity | | | | | | Directors | 3 | 4 | 0 | 0 | | Part II: Demographic Background | | | | | | African American or Black | 1 | 1 | 0 | 0 | | Alaskan Native or Native American | 0 | 0 | 0 | 0 | | Asian | 0 | 0 | 0 | 0 | | Hispanic or Latinx | 0 | 0 | 0 | 0 | | Native Hawaiian or Pacific Islander | 0 | 0 | 0 | 0 | | White | 2 | 3 | 0 | 0 | | Two or More Races or Ethnicities | 0 | 0 | 0 | 0 | | LGBTQ+ | 0 | | | | | Did Not Disclose Demographic Background | 0 | | | |
Samuel C. Scott III
If you submit a proxy but do not indicate any voting instructions, the persons named as proxies will vote the shares of common stock represented thereby for the election as a director of the person whose name and biography appears below. In the event that any of Mr. Sacks, Ms. Blanton, Dr. Cornelli, Mr. Levin, Mr. Malkin, Ms. Masters or Mr. Scott should become unable to serve, or for good cause will not serve, as a director, it is intended that votes will be cast for a substitute nominee designated by the Board or the Board may elect to reduce its size. The Board has no reason to believe that any of the director nominees will be unable to serve if elected. Each of the director nominees has consented to being named in this proxy statement and to serve if elected.
Compensation Philosophy
| • | annual discretionary performance bonuses; |
Compensation Philosophy
| • | equity and equity-like incentives including RSUs, carried interest awards, and profit-sharing partnership interests; and |
Bonuses
Bonuses Each of our NEOs other than Mr. Sacks received discretionary annual performance bonuses with respect to services in fiscal 2023. Under their employment agreements, Messrs. Levin and Pollock and Mses. Bentley and Hurse are entitled to receive annual bonuses, each of which is determined in the sole discretion of the firm. Under his employment agreement, Mr. Pollock’s total cash receipts for bonus periods in respect of calendar years 2023, 2024, and 2025 must meet certain minimum amounts. The size of our annual bonus pool for bonus-eligible employees is determined by our operating results. Annual bonuses are intended to reward our NEOs, other than Mr. Sacks, for strong financial performance and helping us achieve our annual goals. Factors that were considered in determining the size of the bonus paid to each NEO include (i) performance and contributions of the NEO to the overall success of our business, (ii) contributions and accomplishments in leading and managing the Company and its teams, (iii) contributions to support growth of our shareholder value and (iv) relative performance compared to prior year performance and to our other executive-level employees. Please see the section titled “Bonuses” below the Summary Compensation Table for more information.
Equity Compensation
Equity Compensation We currently maintain the Amended and Restated Incentive Award Plan in order to facilitate the grant of cash and equity incentives to directors, employees (including our NEOs), and consultants of our company and certain of its affiliates and to enable our company and certain of its affiliates to obtain and retain services of these individuals, which is essential to our long-term success. Each of our NEOs is entitled to receive equity compensation pursuant to the Amended and Restated Incentive Award Plan, which must be approved by our Board. In fiscal 2023 we determined the amount of equity awards awarded to our NEOs based on a holistic review of their respective total compensation packages and based on firm and individual performance in connection with annual performance reviews conducted with senior management, as well as pursuant to contractual entitlements described in the section titled “Employment Agreements” below. Notwithstanding that Mr. Sacks is eligible to receive awards under the Amended and Restated Incentive Award Plan, we did not issue such awards to Mr. Sacks in fiscal 2023. We have utilized awards of RSUs that vest over a three-year period, subject to continued service through the applicable vesting date, as our primary form of long-term equity compensation. We believe that the three-year vesting period promotes employee retention and encourages our employees to focus on our long-term strategic objectives and appreciation in shareholder value. In addition, we have utilized awards that vest over a period of less than three years to promote greater equity ownership as a percentage of total rewards, which we believe aligns our employees’ interests with those of our shareholders. Under his employment agreement, Mr. Pollock is entitled to be granted 150,000 RSUs in calendar years 2023, 2024, and 2025 which vest over a three-year period following the respective dates of grant, subject to Mr. Pollock’s continued service through the applicable vesting date, subject to Board approval (as described in the section titled “Employment Agreements – Frederick E. Pollock” below). During fiscal 2023, our Board approved grants of RSU awards to Messrs. Levin and Pollock and Mses. Bentley and Hurse pursuant to the Amended and Restated Incentive Award Plan, which vest over a three-year period, subject to such NEOs’ continued service with the Company through the applicable vesting date. In addition, each of Messrs. Levin and Pollock received a grant of RSUs on March 1, 2023 that vested subject to continued service through August 15, 2023 and each of Mses. Bentley and Hurse received a grant of RSUs on October 2, 2023 that vested subject to continued service through March 1, 2024. Please see the sections titled “Equity Compensation” below the Summary Compensation Table and “Grants of Plan-Based Awards” for more information.
Carried Interest
Carried Interest Senior employees including Messrs. Sacks, Levin and Pollock, and Mses. Bentley and Hurse are eligible to participate in our carried interest arrangements. Distributions of carried interest under these arrangements reflect receipt of a portion of the incentive compensation earned by our funds based on fund performance. Amounts received from our carried interest arrangements are dependent upon the success of our fund investments and therefore, incentivize behavior that is aligned with successful fund performance, our investors and our shareholders. These awards, including those made to our NEOs, are determined in conjunction with bonus and total rewards determinations based on firm and individual performance in connection with annual performance reviews conducted with senior management. They generally vest based on the continued performance of services over a multi-year period and may be subject to reduction or forfeiture under certain circumstances. The service-based vesting criteria promotes employee retention during the applicable vesting period. Please see the section titled “Carried Interest” below the Summary Compensation Table for more information.
Summary Compensation Table
Summary Compensation Table The following table sets forth information concerning the compensation of our NEOs for our fiscal years ended December 31, 2023, December 31, 2022 and December 31, 2021.
Summary Compensation Table
| Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards(1) ($) | All Other Compensation ($) | Total ($) | | Michael J. Sacks Chief Executive Officer and Chairman | 2023 | 4,277,200 | — | — | 1,582,211(2) | 5,859,411 | | | 2022 | 4,014,500 | — | — | 1,381,074 | 5,395,574 | | | 2021 | 3,748,100 | — | — | 824,114 | 4,572,214 | | Jonathan R. Levin President | 2023 | 500,000 | 321,741(3) | 30,298,938(4) | 3,601,077(5) | 34,721,756 | | | 2022 | 500,000 | 232,382 | 277,200 | 7,156,839 | 8,166,421 | | | 2021 | 500,000 | 1,566,929 | 6,128,800 | 17,265,132 | 25,460,861 | | Pamela Bentley Chief Financial Officer | 2023 | 500,000 | 142,900(6) | 1,090,070(7) | 304,522(8) | 2,037,492 | | | 2022 | 500,000 | 248,750 | 3,164,935 | 252,996 | 4,166,681 | | | 2021 | 500,000 | 978,750 | 3,390,400 | 5,874 | 4,875,024 | | Sandra Hurse Managing Director, Chief Human Resources Officer | 2023 | 500,000 | 239,389(9) | 926,443(10) | 606,417(11) | 2,272,250 | | | 2022 | 500,000 | 199,427 | 3,091,610 | 489,871 | 4,280,908 | | | 2021 | 500,000 | 857,433 | 1,304,000 | 352,203 | 3,013,636 | | Frederick E. Pollock Managing Director, Chief Investment Officer | 2023 | 500,000 | 150,000(12) | 48,528,938(13) | 1,593,670(14) | 50,772,608 | | | 2022 | 500,000 | 125,000 | 277,200 | 11,107,192 | 12,009,392 | | | 2021 | 500,000 | 1,490,833 | 9,780,000 | 2,054,875 | 13,825,708 |
Summary Compensation Table
| (1) Represents the aggregate grant date fair value of the RSUs and Management Award Interests (as described below) in the year shown, computed in accordance with U.S. GAAP pertaining to equity-based compensation, and expense related to the Amended Holdings Award Interests (as described below). For additional information regarding the determination of grant date fair value see Note 12 and Note 13 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023 that accompanies this Proxy Statement. |
Summary Compensation Table
| (2) Amount represents (i) $1,537,262 reflecting the actual aggregate incremental cost to the Company of providing the executive with access to non-commercial air travel pursuant to his employment agreement, calculated based on a charter rate allocated to Mr. Sacks and (ii) $44,949 in cash distributions received in 2023 under our carried interest arrangements, which are described in more detail below. |
Summary Compensation Table
| (3) Amount represents (i) a bonus in the amount of $225,000 earned for 2023, the amount of which is determined in the sole discretion of GCMLP, (ii) $66,741 as the portion of a $150,000 award (and associated earnings calculated through December 31, 2023, with respect to such award) granted to Mr. Levin in 2019 under the Deferred Compensation Plan that vested in 2023, described in more detail below and (iii) $30,000 as a portion of a $150,000 award granted to Mr. Levin in 2020 under the Deferred Compensation Plan that vested in 2023, described in more detail below. |
Summary Compensation Table
| (4) Amount represents (1) the aggregate grant date fair value of RSUs granted in 2023 in the amount of $1,668,938, and (2) expense related to the Amended Holdings Award Interest awarded in 2023 in the amount of $28,630,000 (described in more detail below). On May 9, 2023 Mr. Levin’s Original Holdings Award Interest was revised to memorialize Mr. Levin’s stated percentage, or minimum allocable share, of distributions from Holdings, as well as a profits interest with respect to net sale proceeds from dispositions of Holdings properties after certain threshold distributions to other members. Pursuant to ASC 505, the Amended Holdings Award Interest was recognized as compensation expense with a corresponding deemed contribution and is now accounted for under ASC 718, Compensation—Stock Compensation as the Amended Holdings Award Interest now has characteristics that are more akin to the risks and rewards of equity ownership in Holdings. The Amended Holdings Award Interest had an aggregate grant date fair value of $78,630,000 within the meaning of ASC 718. Target amounts under the Original Holdings Award Interest of $50,000,000 that were previously expensed for financial accounting purposes prior to 2023 were reversed, and the incremental expense reflected in our financial statements in 2023 is $28,630,000. For additional information regarding the determination of grant date fair value see Note 12 and Note 13 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023 that accompanies this Proxy Statement. The Amended Holdings Award Interests do not dilute the Class A common stockholders or impact net cash flows of the Company. |
Summary Compensation Table
| (5) Amount represents (i) company 401(k) contributions of $5,625, (ii) mobile phone stipend of $1,020, (iii) wellness benefits of $100, (iv) $342,694 reflecting the actual aggregate incremental cost to the Company of providing the executive with access to non-commercial air travel pursuant to his employment agreement, calculated based on a charter rate allocated to Mr. Levin, (v) $24,256 in life and long-term disability insurance premiums, as described in more detail below, (vi) $17,529 as tax gross-up payments to make the executive whole for income taxes recognized on the Company insurance premiums, as described in more detail below and (vii) $1,799,579 in cash distributions received in 2023 under our carried interest arrangements, which are described in more detail below. During the period January 1, 2023 through May 8, 2023 before the Original Holdings Award Interests were amended, Mr. Levin received $1,410,274 of discretionary cash distributions of profits received in respect of his membership interest in Holdings, which figure is also reflected in this column. |
Summary Compensation Table
| (6) Amount represents a bonus earned for 2023, the amount of which is determined in the sole discretion of GCMLP. |
Summary Compensation Table
| (7) Amount represents the aggregate grant date fair value of RSUs granted in 2023, computed in accordance with U.S. GAAP pertaining to equity-based compensation. For additional information regarding the determination of grant date fair value see Note 13 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023 that accompanies this Proxy Statement. |
Summary Compensation Table
| (8) Amount represents (i) company 401(k) contributions of $7,500, (ii) mobile phone stipend of $1,020, (iii) $3,234 in cash distributions received in 2023 under our carried interest arrangements, which are described in more detail below, (iv) $211,358 of discretionary cash distributions of profits received in respect of Ms. Bentley’s membership interest in Management LLC and (v) $81,410 in housing allowance calculated based on the actual rent expense. |
Summary Compensation Table
| (9) Amount represents (i) a bonus in the amount of $110,400 earned for 2023, the amount of which is determined in the sole discretion of GCMLP, (ii) $88,989 as the portion of a $200,000 award (and associated earnings calculated through December 31, 2023, with respect to such award) granted to Ms. Hurse in 2019 under the Deferred Compensation Plan that vested in 2023, described in more detail below and (iii) $40,000 as the portion of a $200,000 award granted to Ms. Hurse in 2020 under the Deferred Compensation Plan that vested in 2023, described in more detail below. |
Summary Compensation Table
| (10) Amount represents the aggregate grant date fair value of RSUs granted in 2023, computed in accordance with U.S. GAAP pertaining to equity-based compensation. For additional information regarding the determination of grant date fair value see Note 13 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023 that accompanies this Proxy Statement. |
Summary Compensation Table
| (11) Amount represents (i) company 401(k) contributions of $7,405, (ii) $7,755 in cash distributions received in 2023 under our carried interest arrangements, which are described in more detail below, (iii) $525,937 of discretionary cash distributions of profits received in 2023 in respect of Ms. Hurse’s membership interests in Holdings and Management LLC and (iv) $65,320 in housing allowance calculated based on the actual rent expense. |
Summary Compensation Table
| (12) Amount represents a bonus earned for 2023, the amount of which was determined in the sole discretion of GCMLP, subject to a minimum total compensation amount pursuant to his employment agreement, as described further below. |
Summary Compensation Table
| (13) Amount represents (1) the aggregate grant date fair value of RSUs granted in 2023 in the amount of $1,668,938, and (2) expense related to the Amended Holdings Award Interest awarded in 2023 in the amount of $46,860,000 (described in more detail below). On May 9, 2023 Mr. Pollock’s Original Holdings Award Interest was revised to memorialize certain terms, and the Amended Holdings Award Interest entitles Mr. Pollock to a stated percentage, or minimum allocable share, of distributions from Holdings, as well as a profits interest with respect to net sale proceeds from dispositions of Holdings properties after certain threshold distributions to other members. Pursuant to ASC 505, the Amended Holdings Award Interest was recognized as compensation expense with a corresponding deemed contribution and is now accounted for under ASC 718, Compensation—Stock Compensation as the Amended Holdings Award Interest now has characteristics that are more akin to the risks and rewards of equity ownership in Holdings. The Amended Holdings Award Interest had a grant date fair value of $76,860,000 within the meaning of ASC 718. Target amounts under the Original Holdings Award Interests of $30,000,000 that were previously expensed for financial accounting purposes prior to 2023 were reversed. Of the total incremental expense of $46,860,000, $32,019,000 was reflected in our financial statements in 2023 and $14,841,000 will be reflected in our financial statements in 2024 subject to Mr. Pollock’s continued employment and vesting on December 31, 2024. For additional information regarding the determination of grant date fair value see Note 12 and Note 13 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023 that accompanies this Proxy Statement. The Amended Holdings Award Interests do not dilute the Class A common stockholders or impact net cash flows of the Company. |
Summary Compensation Table
| (14) Amount represents (i) company 401(k) contributions of $5,625, (ii) mobile phone stipend of $1,020, and (iii) $237,025 in cash distributions received in 2023 under our carried interest arrangements, which are described in more detail below. During the period January 1, 2023 through May 8, 2023 before the Original Holdings Award Interests were amended, Mr. Pollock received $1,350,000 of discretionary cash distributions of profits received in respect of Mr. Pollock’s membership interests in Holdings, which figure is also reflected in this column. |
Grants of Plan-Based Awards
Grants of Plan-Based Awards The following table sets forth information regarding equity awards granted to NEOs during fiscal 2023.
Grants of Plan-Based Awards
| | | | Stock Awards | | | | Grant Date | Approval Date | All other Stock Awards: Number of Shares of Stock or Units (#) | Grant Date Fair Value of Stock and Option Awards ($)(1) | | Michael J. Sacks | — | — | — | — | | Jonathan R. Levin | 3/1/2023 | 2/22/2023 | 75,000(2) | 620,250 | | | 3/1/2023 | 2/22/2023 | 131,250(3) | 1,085,438 | | | 5/9/2023 | 5/9/2023 | N/A(4) | 28,360,000(4) | | Pamela Bentley | 3/1/2023 | 2/22/2023 | 50,000(2) | 413,500 | | | 10/2/2023 | 10/1/2023 | 75,510(5) | 575,386 | | Sandra Hurse | 3/1/2023 | 2/22/2023 | 40,000(2) | 330,800 | | | 10/2/2023 | 10/1/2023 | 66,478(5) | 506,562 | | Frederick E. Pollock | 3/1/2023 | 2/22/2023 | 75,000(2) | 620,250 | | | 3/1/2023 | 2/22/2023 | 131,250(3) | 1,085,438 | | | 5/9/2023 | 5/9/2023 | N/A(6) | 46,860,000(6) |
Grants of Plan-Based Awards
| (1) Amounts in this column relating to grants of RSUs represent the aggregate grant date fair value of RSUs granted under the Amended and Restated Incentive Award Plan, computed in accordance with U.S. GAAP pertaining to equity-based compensation, based on the closing price per share of Class A common stock on the date of grant, which was $8.27 on March 1, 2023 and $7.62 on October 2, 2023. Amounts in this column related to the Amended Holdings Award Interests represent the expense related to these awards, as described further below. |
Grants of Plan-Based Awards
For additional information regarding the determination of grant date fair value see Note 12 and Note 13 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023 that accompanies this Proxy Statement.
Grants of Plan-Based Awards
| (2) One third of the RSUs vest on each of May 31, 2024, May 31, 2025 and May 31, 2026, subject to continued employment through the applicable vesting date. |
Grants of Plan-Based Awards
| (3) RSUs fully vested on August 15, 2023. |
Grants of Plan-Based Awards
| (4) Amount represents expense related to the Amended Holdings Award Interest awarded in 2023 in the amount of $28,630,000. The Amended Holdings Award Interest had an aggregate grant date fair value of $78,630,000 within the meaning of ASC 718. Target amounts under the Original Holdings Award Interest of $50,000,000 that were previously expensed for financial accounting purposes prior to 2023 were reversed, and the incremental expense reflected in our financial statements in 2023 is $28,630,000. The Amended Holdings Award Interest is not denominated in units or shares. The Amended Holdings Award Interests do not dilute the Class A common stockholders or impact net cash flows of the Company. |
Grants of Plan-Based Awards
| (5) RSUs fully vested on March 1, 2024. |
Grants of Plan-Based Awards
| (6) Amount represents expense related to the Amended Holdings Award Interest awarded in 2023 in the amount of $46,860,000. The Amended Holdings Award Interest had an aggregate grant date fair value of $76,860,000 within the meaning of ASC 718. Target amounts under the Original Holdings Award Interest of $30,000,000 that were previously expensed for financial accounting purposes prior to 2023 were reversed. Of the total incremental expense of $46,860,000, $32,019,000 was reflected in our financial statements in 2023 and $14,841,000 will be reflected in our financial statements in 2024 subject to Mr. Pollock’s continued employment and vesting on December 31, 2024. The Amended Holdings Award Interest is not denominated in units or shares. The Amended Holdings Award Interests do not dilute the Class A common stockholders or impact net cash flows of the Company. |
Outstanding Equity Awards at Fiscal Year-End
Outstanding Equity Awards at Fiscal Year-End The following table sets forth information regarding outstanding unvested equity awards held by our NEOs as of December 31, 2023.
Outstanding Equity Awards at Fiscal Year-End
| Name | Grant Date | Stock Awards | | | | | Number of shares or units of stock that have not vested (#) | Market value of shares or units of stock that have not vested(5) ($) | | Michael J. Sacks | — | — | — | | Jonathan R. Levin | 3/1/2022 | 9,166(1)(2) | 82,127 | | | 3/1/2023 | 75,000(3) | 672,000 | | Pamela Bentley | 3/1/2022 | 9,166(1)(2) | 82,127 | | | 3/1/2023 | 50,000(3) | 448,000 | | | 12/15/2022 | 300,000(4) | 2,688,000 | | | 10/2/2023 | 75,510(2) | 676,570 | | Sandra Hurse | 3/1/2022 | 9,166(1)(2) | 82,127 | | | 3/1/2023 | 40,000(3) | 358,400 | | | 12/15/2022 | 300,000(4) | 2,688,000 | | | 10/2/2023 | 66,478(2) | 595,643 | | Frederick E. Pollock | 3/1/2022 | 9,166(1)(2) | 82,127 | | | 3/1/2023 | 75,000(3) | 672,000 | | | 5/9/2023 | N/A(6) | 9,399,418(6) |
Outstanding Equity Awards at Fiscal Year-End
| (1) One third of the RSUs were fully vested on the date of grant, one third of the RSUs vest on the anniversary of the grant, and one third of the restricted stock units vest on the second anniversary of the grant, subject to continued employment through the applicable vesting date. |
Outstanding Equity Awards at Fiscal Year-End
| (2) RSUs fully vested on March 1, 2024. |
Outstanding Equity Awards at Fiscal Year-End
| (3) One third of the RSUs vest on each of May 31, 2024, May 31, 2025 and May 31, 2026, subject to continued employment through the applicable vesting date. |
Outstanding Equity Awards at Fiscal Year-End
| (4) Management Award Interests fully vest on May 1, 2025, subject to continued employment through the applicable vesting date, other than in the case of death or disability, in which case the Management Award Interests will remain outstanding, to be settled within 90 days following May 1, 2025. |
Outstanding Equity Awards at Fiscal Year-End
| (5) The market values of RSUs in this column are based on the closing trading price of $8.96 per share of Class A common stock as of December 29, 2023 listed on the Nasdaq, and the market value of the Amended Holdings Award Interest in this column is based on the value of the award outstanding as of December 31, 2023. |
Outstanding Equity Awards at Fiscal Year-End
| (6) Amount represents the value of partnership interest-based compensation related to the Amended Holdings Award Interest awarded in 2023 and outstanding as of December 31, 2023. The Amended Holdings Award Interest will be fully vested on December 31, 2024 and the value of the award (computed in accordance with ASC 718) will be fully expensed in fiscal year 2024. The Amended Holdings Award Interest is not denominated in units or shares. The Amended Holdings Award Interests do not dilute the Class A common stockholders or impact net cash flows of the Company. |
Option Exercises and Stock Vested
Option Exercises and Stock Vested The following table reflects RSUs held by our NEOs that vested during fiscal 2023. None of our NEOs have any outstanding stock option awards.
Option Exercises and Stock Vested
| | Stock Awards | | | | Number of Shares Acquired on Vesting (#) | Value Realized at Vesting ($)(1) | | Michael J. Sacks | — | — | | Jonathan R. Levin | 297,083 | 2,420,126 | | Pamela Bentley | 174,083 | 1,403,671 | | Sandra Hurse | 112,001 | 894,278 | | Frederick E. Pollock | 390,417 | 3,191,999 |
Option Exercises and Stock Vested
| (1) The value of RSUs is determined based on the closing trading price of a share of Class A common stock on the applicable vesting date. |
Non-qualified Deferred Compensation Plan
Non-qualified Deferred Compensation Plan The following table sets forth information with respect to the deferral of the compensation to our NEOs pursuant to the Deferred Compensation Plan during fiscal 2023.
Non-qualified Deferred Compensation Plan
| Name | Aggregate Earnings in 2023 ($)(1) | Aggregate Withdrawals / Distributions ($) | Aggregate Balance at 2023 ($)(2) | | Michael J. Sacks | — | — | — | | Jonathan R. Levin | 13,533 | 30,125 | 312,676 | | Pamela Bentley | — | — | — | | Sandra Hurse | 18,044 | 40,167 | 416,902 | | Frederick E. Pollock | — | — | — |
Non-qualified Deferred Compensation Plan
| (1) Represents award adjustment for calendar year 2023. |
Non-qualified Deferred Compensation Plan
| (2) Includes vested and unvested amounts. |
Potential Payments upon Termination
Potential Payments upon Termination None of our NEOs is entitled to payments or other benefits in connection with a change in control. Mr. Sacks. Upon Mr. Sacks’ resignation from GCMLP or his termination without cause following the “sunset date” (as defined in his employment agreement), Mr. Sacks will receive a separation payment in the amount of 25% of his compensation at the time of such termination for the one-year period commencing on the fifteenth day of the first month following such termination. Mr. Sacks will be available to cooperate with GCMLP from to time. Mr. Sacks will also be entitled to an additional $1,500/hour rate if he works more than forty hours per month during the one year period. Upon Mr. Sacks’ termination of employment by reason of his death or disability, Mr. Sacks (or his estate, as applicable), will be entitled to 12 months’ continuation of his annual base salary at the time of such termination, payable in accordance with GCMLP’s normal payroll practices. Mr. Sacks’ employment agreement includes confidentiality and assignment of intellectual property provisions, as well as two year post-termination non-competition, noninterference and non-solicitation of employees provisions, subject to exceptions set forth in the agreement. Mr. Levin. Upon Mr. Levin’s termination from GCMLP other than (i) for cause or (ii) due to his death or disability, Mr. Levin will receive a separation payment in the amount of $375,000 for the one-year period following such termination. Mr. Levin will be available to cooperate with GCMLP from time to time. Mr. Levin will also be entitled to an additional $200/hour rate if he works more than forty hours during a particular month. Mr. Levin’s employment agreement includes certain restrictive covenants, including confidentiality, perpetual non-disparagement in favor of GCMLP and assignment of intellectual property provisions, as well as a one year post-termination non-competition and a two year post-termination noninterference and non-solicitation of employees, clients and marketing agents provisions, subject to exceptions set forth in the agreement. If Mr. Levin materially violates any of these restrictive covenants, GCMLP may cease paying any unpaid installments of the separation payment. Mr. Pollock. Upon Mr. Pollock’s termination from GCMLP other than (i) for cause or (ii) due to his death or disability, Mr. Pollock will receive separation payments in the amount of $250,000 per year for the two-year period following such termination. In addition, if Mr. Pollock provides a six-month notice resignation, then all carried interest awarded to Mr. Pollock on or prior to March 31, 2022 that is not fully vested as of the termination date shall be deemed 80% vested as of such date. Mr. Pollock’s employment agreement includes certain restrictive covenants, including confidentiality, perpetual non-disparagement in favor of GCMLP and assignment of intellectual property provisions, as well as two-year post-termination non-competition, noninterference and non-solicitation of employees, clients and marketing agents provisions, subject to exceptions set forth in the agreement. If Mr. Pollock materially violates any of these restrictive covenants GCMLP may cease paying any unpaid installments of the separation payment. Mr. Pollock’s entitlement to receive the separation payment is conditioned upon his execution and non-revocation of a separation agreement that includes a general release of claims in the form then in use by GCMLP. Ms. Bentley. Upon Ms. Bentley’s termination from GCMLP other than (i) for cause or (ii) due to her death or disability, Ms. Bentley will receive (a) separation payments in the form of salary continuation payments at the rate of $200,000 and (b) reimbursement of continuation group health insurance premiums for GCMLP’s group health insurance coverage, in each case during the 12-month period following her termination date. Ms. Bentley’s employment agreement includes certain restrictive covenants, including confidentiality, perpetual non-disparagement in favor of GCMLP and assignment of intellectual property provisions, as well as one-year post-termination non-competition and two-year post-termination noninterference and non-solicitation of employees, clients and marketing agents provisions, subject to exceptions set forth in the agreement. If Ms. Bentley materially violates any of these restrictive covenants GCMLP may cease paying any unpaid installments of the separation payment and the post-termination insurance benefits. Ms. Bentley’s entitlement to receive the separation payment is conditioned upon her execution and non-revocation of a separation agreement that includes a general release of claims in the form then in use by GCMLP. Ms. Hurse. Upon Ms. Hurse’s termination from GCMLP other than (i) for cause or (ii) due to her death or disability, Ms. Hurse will continue to engage with GCMLP for a one-year period as a consultant in exchange for a consulting fee at the annual rate of $500,000. Ms. Hurse’s employment agreement includes certain restrictive covenants, including confidentiality, perpetual non-disparagement in favor of GCMLP and assignment of intellectual property provisions, as well as one-year post-termination non-competition, noninterference and non-solicitation of employees, clients and marketing agents provisions, subject to exceptions set forth in the agreement. If Ms. Hurse materially violates any of these restrictive covenants GCMLP may cease paying any unpaid installments of the separation payment. Ms. Hurse’s entitlement to receive the consulting fee is conditioned upon her execution and non-revocation of a separation agreement that includes a general release of claims in the form then in use by GCMLP.
Quantification of Potential Payments upon Termination or Change in Control
Quantification of Potential Payments upon Termination or Change in Control The following table lists the estimated amounts that would have been payable to our named executive officers under their employment arrangements and outstanding equity awards in connection with a termination that occurred on the last day of our last completed fiscal year and the value of any additional equity that would vest upon such termination, assuming that the applicable triggering event occurred on December 31, 2023, and that the price per share was $8.96, which was the closing price per share of GCMG Class A common stock listed on the Nasdaq on the last trading day of the year. Carried interest is paid based on the price at which Grosvenor funds are able to sell or otherwise realize value from their investments; it is inherently uncertain and any yet unrealized carried interest amounts may not be paid for several years after carried interest is fully vested, if at all. Because of this uncertainty we do not provide a calculation of carried interest payment amounts that would be payable following the NEO’s termination on December 31, 2023.
Quantification of Potential Payments upon Termination or Change in Control
| Name | Reason for Employment Termination | Estimated Value of Cash Payments ($) | Estimated Value of Equity Acceleration ($) | | Michael J. Sacks | Resignation | 1,069,300 | — | | | Death/Disability | 4,277,200 | — | | Jonathan R. Levin | Without Cause/Resignation | 375,000 | — | | | Death/Disability | — | 754,127 | | Pamela Bentley | Without Cause/Resignation | 229,339 | — | | | Death/Disability | — | 3,894,697 | | Sandra Hurse | Without Cause/Resignation | 500,000 | — | | | Death/Disability | — | 3,724,170 | | Frederick E. Pollock | Without Cause/Resignation | 500,000 | — | | | Death/Disability | — | 754,127 |
Pay Versus Performance
Pay Versus Performance The following table and related disclosures provide information about the relationship between compensation actually paid to our NEOs and certain financial performance metrics of the Company pursuant to an SEC-prescribed methodology, which is different from the SEC-prescribed methodology required for the Summary Compensation Table and related disclosures.
Pay Versus Performance
| Year | Summary Compensation Table Total for PEO(1) | Compensation Actually Paid to PEO(1) (3) | Average Summary Compensation Table Total for Non-PEO Named Executive Officers(1) | Average Compensation Actually Paid to Non-PEO Named Executive Officers(1) (3) | Value of Initial $100 Investment Based On: | | Net Income (Thousands $) | Fee-Related Earnings (Thousands $)(5) | | | | | | | Total Shareholder Return | Peer Group Total Shareholder Return(4) | | | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | | 2023 | $5,859,411 | $5,859,411 | $22,451,027(2) | $23,067,310(2) | $77 | $135 | $12,774 | $139,942 | | 2022 | $5,395,574 | $5,395,574 | $7,155,851 | $6,605,397 | $62 | $121 | $19,820 | $128,513 | | 2021 | $4,572,214 | $4,572,214 | $11,793,807 | $10,997,623 | $81 | $135 | $21,482 | $120,401 |
Pay Versus Performance
| (1) Our PEO for fiscal years 2021-2023 is Mr. Sacks. The Non-PEO NEOs reflected in columns (d) and (e) are Mr. Levin (2021-2023), Ms. Bentley (2021-2023), Ms. Hurse (2021-2023), and Mr. Pollock (2021-2023). |
Pay Versus Performance
| (2) Excluding the impact of the modification related to the Amended Holdings Award Interests in 2023, the Average Summary Compensation Table Total for Non-PEO NEOs would be $3,578,527, and the Average Compensation Actually Paid to Non-PEO NEOs would be $4,086,731. The Amended Holdings Award Interests do not dilute the Class A common stockholders Or impact net cash flows of the Company. Prior to their modification, the Amended Holdings Award Interests were not accounted for as equity awards and therefore there were no valuation assumptions disclosed on the grant date of such awards. |
Pay Versus Performance
| (3) The following amounts were deducted from / added to Summary Compensation Table (“SCT”) total compensation in accordance with the SEC-mandated adjustments to calculate Compensation Actually Paid (“CAP”) to our PEO and average CAP to our Non-PEO NEOs for 2021, 2022, and 2023. |
Reconciliation of Average SCT Total Compensation to Average CAP for Non-PEO NEOs
| (b) Excluding the impact of the modification related to the Amended Holdings Award Interests in 2023, the Average Compensation Actually Paid for Non-PEO NEOs would be $4,086,731. The Amended Holdings Award Interests do not dilute the Class A common stockholders or impact net cash flows of the Company. |
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION The following table sets forth compensation paid to our non-employee directors for our fiscal year ended December 31, 2023.
DIRECTOR COMPENSATION
| Name | Fees Earned or Paid in Cash ($) | Stock Awards(1) ($) | Total ($) | | Angela Blanton | — | 235,008 | 235,008 | | Francesca Cornelli | 94,000 | 141,023 | 235,023 | | Stephen Malkin | — | 200,024 | 200,024 | | Blythe Masters | — | 250,015 | 285,015 | | Samuel C. Scott III | — | 200,024 | 200,024 |
DIRECTOR COMPENSATION
| (1) Represents the aggregate grant-date fair value of the restricted stock units granted in 2023, computed in accordance with U.S. GAAP pertaining to equity-based compensation. For additional information regarding the determination of grant-date fair value see Note 13 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023. The restricted stock units are fully vested at the time of grant. For fiscal year 2023, the non-employee director elected to receive their quarterly cash compensation in the form of deferred restricted stock units. As of December 31, 2023, Ms. Blanton had 64,802 restricted stock units outstanding; Ms. Cornelli had 27,668 restricted stock units outstanding; Mr. Malkin had 57,248 restricted stock units outstanding, Ms. Masters had 45,708 restricted stock units outstanding and Mr. Scott had 64,802 restricted stock units outstanding. |
DIRECTOR COMPENSATION
Our policy is to not pay director compensation to directors who are also our employees. Our Board has approved the GCM Grosvenor Inc. Non-Employee Director Compensation Policy, which provides for cash and equity-based compensation to those members of our Board who are not employees of us or any of our parents or subsidiaries. Under the policy for the fiscal year 2023, each non-employee director received an annual director fee of $200,000 as well as additional committee membership/chair fees, as follows: (i) annual fee of $50,000 for service as the chair of our audit committee, (ii) annual fee of $35,000 for service on our audit committee (such that the audit committee chair receives $85,000 in total), (iii) $15,000 for service on any other committee, and (iv) additional $30,000 fee to the chair of any other committee. The fees are earned on a quarterly basis and paid in arrears. They are pro-rated in the event service is for a portion of the quarter. The non-employee directors are eligible to elect to receive director fees in the form of fully vested shares of Class A common stock in lieu of cash, or all or a portion of his or her cash fee in the form of deferred restricted stock units, which will be delivered, at the option of the director, on the earlier of (1) the day immediately preceding the date of the first annual meeting of the Company’s stockholders that is at least 50 weeks from the date of grant, or (2) the first anniversary of the date of grant, the director’s cessation of service due to death or disability (as determined in good faith by the Board), the director’s continued service through the date of a change of control of the Company, the date of the director’s separation of service, or any later fixed date that is permitted by the Company and that complies with Section 409A of the Internal Revenue Code. Each non-employee director also receives an initial award of 10,000 restricted stock units, which vests in full on the first anniversary of the non- employee director’s start date, subject to the non-employee director continuing in service through such date. The restricted stock units will accelerate and become fully vested in the event of a Change of Control (as defined in the Amended and Restated Incentive Award Plan) or the directors’ termination of service due to death or disability. The policy may be amended, modified or terminated by the Board at any time in its sole discretion.