DEF 14A of Blue Owl Capital Inc.
Filed Apr 26, 2024 · FY20230001823945-24-000028
PROPOSAL 1: ELECTION OF DIRECTORS
PROPOSAL 1: ELECTION OF DIRECTORS
Board Structure and the Nominees
Board Structure and the Nominees Our Board is currently comprised of ten directors. Our directors are divided into three classes serving staggered three-year terms. Class III, Class I and Class II directors will serve until our annual meetings of stockholders in 2024, 2025 and 2026, respectively. At each annual meeting of stockholders, directors will be elected to succeed the class of directors whose terms have expired. In addition, in connection with the Business Combination, we entered into an investor rights agreement (as amended, the “Investor Rights Agreement”) with the Principals, Neuberger and the other parties from time to time party thereto. The Investor Rights Agreement grants the Principals and Neuberger the right to designate nominees to our Board subject to the maintenance of certain ownership requirements. Pursuant to the Investor Rights Agreement, the Principals have agreed to vote in favor of such nominees. See “Certain Relationships and Related Party Transactions—Investor Rights Agreement” for additional information. Each director shall hold office for the term for which such director is elected and thereafter until such director’s successor shall have been duly elected and qualified, or until his or her earlier death, resignation, retirement, disqualification or removal from office. Since there is no nominating committee, the entire Board participates in the consideration of director nominees. Except as otherwise expressly provided in the certificate of incorporation, the holders of our common stock are entitled to vote on all matters on which stockholders of a corporation are generally entitled to vote under the General Corporation Law of the State of Delaware, as amended, including the election of our Board. In connection with the Annual Meeting, the Board has nominated Ms. Polley and each of Messrs. Komaroff, Ostrover and Zahr for election as Class III directors (collectively, the “Nominees”), each for a three-year term expiring at our 2027 Annual Meeting of Stockholders once their respective successors have been duly elected and qualified or until their earlier resignation or removal. The Company’s certificate of incorporation and amended and restated bylaws (the “Organizational Documents”) provide that each director shall be elected by a plurality of the votes cast at a meeting of stockholders for the election of directors. Set forth below is information concerning our directors as of April 26, 2024, and the key experience, qualifications and skills they bring to the Board.
Directors and Nominees
Directors and Nominees
Directors and Nominees
| Name | Age | Director Class | Serving Since | Positions Held | | Craig W. Packer | 57 | I | May 2021 | Director and Co-President | | Sean Ward | 45 | I | May 2021 | Director and Senior Managing Director | | Dana Weeks | 53 | I | May 2021 | Director* | | Claudia Holz | 66 | II | May 2021 | Director* | | Marc S. Lipschultz | 55 | II | May 2021 | Director and Co-Chief Executive Officer | | Michael D. Rees | 49 | II | May 2021 | Director and Co-President | | Andrew S. Komaroff | 55 | III | May 2021 | Director* | | Douglas I. Ostrover | 61 | III | May 2021 | Chairman of the Board, Co-Chief Executive Officer and Director | | Stacy Polley | 55 | III | May 2021 | Director* | | Marc Zahr | 44 | III | December 2021 | Director and Co-President |
Directors and Nominees
* Our Board has determined that this director is independent for purposes of the NYSE corporate governance listing requirements.
Nominees for Class III Directors (Term expires at the 2024 Annual Meeting of Stockholders)
Nominees for Class III Directors (Term expires at the 2024 Annual Meeting of Stockholders)
Compensation Philosophy
Compensation Philosophy Our business as a global alternative asset manager is dependent on the performance of our NEOs and other key employees. Among other things, we depend on their ability to find, select and execute investments, manage investment strategies of our products, oversee and improve the operations of the Company, find and develop relationships with investors and other sources of capital and provide other services essential to our success. Our compensation philosophy has several primary objectives: (i) attract, motivate and retain talented and experienced executives in our industry, (ii) reward executives whose knowledge, skills and performance are critical to our success, (iii) align executives’ interests with our investors and stockholders, (iv) foster a shared commitment among executives by aligning their individual goals with the goals of our company, (v) compensate our executives in a manner that incentivizes them to manage our business to meet our long-term objectives, and (vi) reinforce our culture and values. One of our most important values is our “one-firm” approach with shared responsibility and success. Therefore, compensation is based on the performance of the Company as a whole, as well as on an individual’s contributions to the Company. In addition, we conduct, at least annually, an evaluation of each employee’s contribution to the Company, including his or her commitment to the Company’s culture and values. Base salaries reflect our NEOs’ proficiency and experience in their respective roles. In addition to base salary, we utilize a blend of variable and long-term pay vehicles to further incentivize and retain talent and provide an overall compensation package that is competitive with the market. Performance-based discretionary bonuses are generally paid annually to employees, including certain NEOs, based on our profitability, market analysis and employee performance. Management equity ownership is a guiding principle for us, and we apply that principle to our NEOs: every NEO is expected to have a meaningful equity interest in the Company. This equity ownership serves to align the interests of our NEOs with those of our stockholders. Our compensation program is a management tool supporting our mission and values. We believe our program supports, reinforces and aligns our values, business strategy and operations with the goal of increasing distributable earnings. Compensation arrangements with our NEOs are described below under “Elements of Compensation.” We did not engage a compensation consultant with respect to determining our NEOs’ compensation in 2023. We do not benchmark or set our NEOs’ compensation by reference to the compensation of a specific peer group.
Cash Bonus Payments
Cash Bonus Payments Our senior management has authority to award cash bonuses to our NEOs at certain times during the year and at the end of the year. The cash bonuses are intended to offer incentive compensation by rewarding the achievement of corporate and individual performance objectives. Such cash bonuses are subject to annual review by senior management. We believe that establishing cash bonus opportunities helps us attract and retain qualified and highly skilled executives. These bonuses are intended to reward executives who have a positive impact on corporate results. The bonuses for 2023 are described in more detail below. Messrs. Kirshenbaum and Ward received discretionary cash bonus awards for their performance in 2023. The discretionary cash bonuses awarded to Messrs. Kirshenbaum and Ward recognize each individual’s contributions to our overall goals and performance. We granted these discretionary cash bonus payments to reward Messrs. Kirshenbaum and Ward for assisting us in achieving our annual goals, both for the Company as a whole and in each individual’s respective area of responsibility. Factors that were included in determining the size of the cash bonus payments include Messrs. Kirshenbaum’s and Ward’s accomplishments in driving our results, their leadership and management of their respective teams and our overall performance. Comparisons were made to prior-year performance, to our other senior professionals, and compensation that is commensurate within our industry with the intention to reward, motivate and retain Messrs. Kirshenbaum and Ward.
Equity-Based Compensation
Equity-Based Compensation We believe that equity-based compensation awards enable us to attract, motivate, retain and adequately compensate executive talent. To that end, we have awarded equity-based compensation both in the form of profits interests (“Incentive Units”) and restricted stock units (“RSUs”). We believe equity awards provide executives with a significant long-term interest in our success by rewarding the creation of stockholder value over time. For 2023, Messrs. Ostrover, Lipschultz and Rees elected to receive quarterly grants of Incentive Units in satisfaction of their contractual right under their respective employment agreements (which are described in more detail below), and our Co-Chief Executive Officers and Board determined the size of equity granted to our other NEOs. Our Co-Chief Executive Officers and Board considered each NEO’s current position with the Company, the size of their total compensation package and the amount of existing vested and unvested equity awards, if any, then held by the NEO when determining the size of equity grants made to our NEOs. No formal benchmarking efforts are made by our Co-Chief Executive Officers or Board with respect to the size of equity grants made to NEOs. 2021 Omnibus Equity Incentive Plan At the special meeting of the shareholders of Altimar Acquisition Corporation (“Altimar”) held on May 18, 2021, the Altimar shareholders considered and approved the Blue Owl Capital Inc. 2021 Omnibus Equity Incentive Plan (as amended, the “2021 Omnibus Plan”), which became effective immediately upon the completion of the Business Combination. The 2021 Omnibus Plan allows for the grant of equity incentives, such as RSUs, stock options, stock appreciation rights and restricted stock. On October 22, 2021, we amended the 2021 Omnibus Plan and the Blue Owl Limited Partnership Agreements (as amended, the “Second Amended and Restated Blue Owl Limited Partnership Agreements”) of the Blue Owl Partnerships to increase the share limit under the 2021 Omnibus Plan and to allow for the issuance, from time to time of certain Incentive Units to Blue Owl Management Vehicle LP (“Blue Owl MV”), a vehicle formed for the benefit of certain management employees of Blue Owl, by Blue Owl Carry and Blue Owl Holdings, which Incentive Units issuances would be in addition to the issuance of certain RSUs. The Incentive Units entitle the recipient to receive, through Blue Owl MV, distributions from either Blue Owl Holdings or Blue Owl Carry in accordance with the terms of, and subject to any restrictions contained in, the applicable limited partnership agreement for each of Blue Owl Carry, Blue Owl Holdings and Blue Owl MV, and are currently counted against the share limit under the 2021 Omnibus Plan on a 1.25:1.00 basis. This proxy statement includes a proposal to amend and restate the 2021 Omnibus Plan to, among other things, increase the share limit available and count Incentive Units against the share limit on a 1:00:1:00 basis. Incentive Units Incentive Units entitle the recipients to receive, through Blue Owl MV, distributions from Blue Owl Holdings and Blue Owl Carry in accordance with the terms of, and subject to any restrictions contained in, the applicable limited partnership agreement for each of Blue Owl MV, Blue Owl Holdings and Blue Owl Carry. In 2023, the Company awarded Incentive Units to Messrs. Ostrover, Lipschultz, Kirshenbaum, Packer and Rees. These Incentive Units were fully vested upon the date of grant but subject to a lock-up period of one year from the date of grant. After expiration of the one-year holding requirement and attainment of required capital account thresholds, such Incentive Units settle by delivery of an equal number of Common Units of each of the Blue Owl Operating Partnerships (collectively, “Blue Owl Operating Group Units”) and Class C Shares. Blue Owl Operating Group Units may be exchanged (together with an equal number of Class C Shares which are cancelled for no consideration in such exchange) from time to time at the request of the holder for an equal number of newly issued Class A Shares (or at the election of an exchange committee of Blue Owl GP, a cash payment equal to the five-day volume weighted average price of our Class A Shares immediately prior to the applicable exchange date). For Messrs. Ostrover, Lipschultz and Rees, the amounts presented in the Summary Compensation Table for 2023 relate to the Incentive Units granted in satisfaction of their contractual right under their respective employment agreements, and include the grants with respect to the fourth quarter of 2022 granted in February 2023 and the first three quarters of the year. Amounts related to the fourth quarter of 2023 were granted in February 2024, and therefore are not included in the table. For Messrs. Kirshenbaum and Packer, such grants were discretionary and in relation to their performance in 2023. RSUs Mr. Ward was granted RSUs on December 1, 2023, that represents the portion of Mr. Ward’s 2023 bonus that was deferred in the form of RSUs, which award will vest in three equal annual installments on February 15 of 2025, 2026 and 2027. Each RSU represents the contingent right to receive one of the Company’s Class A Shares upon vesting.
Section 280G of the Internal Revenue Code
Section 280G of the Internal Revenue Code Section 280G of the Code disallows a tax deduction with respect to “excess parachute payments” to certain executive officers of companies that undergo a change in control. In addition, Section 4999 of the Code imposes a 20% excise tax penalty on the individual receiving the “excess parachute payment.” Parachute payments are compensation that is linked to or triggered by a change in control and may include, but are not limited to, bonus payments, severance payments, certain fringe benefits, and payments and acceleration of vesting from long-term incentive plans or programs and other equity-based compensation. “Excess parachute payments” are parachute payments that exceed a threshold determined under Section 280G of the Internal Revenue Code based on an executive officer’s prior compensation. In approving compensation arrangements for our NEOs in the future, we expect that the Board will consider all elements of the cost to us of providing such compensation, including the potential impact of Section 280G of the Code. However, the Board may, in its judgment, authorize compensation arrangements that could give rise to loss of deductibility of Section 280G of the Code and the imposition of excise taxes under Section 4999 of the Code when it believes that such arrangements are appropriate to attract and retain executive talent.
2023 Summary Compensation Table
2023 Summary Compensation Table The following table summarizes the total compensation paid to or earned by each of our NEOs in 2023, 2022 and 2021.
2023 Summary Compensation Table
| Name and Principal Position | Year | Salary ($) | Bonus ($)(1) | Stock Awards ($)(2) | Non-Equity Incentive Plan Compensation ($) | All Other Compensation ($)(3) | Total ($) | | Douglas I. Ostrover | 2023 | 500,000 | — | 17,304,596 | — | 673,599 | 18,478,195 | | Co-Chief Executive Officer | 2022 | 500,000 | — | 9,010,338 | — | 625,047 | 10,135,385 | | | 2021 | 500,000 | — | — | 10,898,160 | 239,018 | 11,637,178 | | Marc S. Lipschultz | 2023 | 500,000 | — | 17,304,596 | — | 673,599 | 18,478,195 | | Co-Chief Executive Officer | 2022 | 500,000 | — | 9,010,338 | — | 625,047 | 10,135,385 | | Alan Kirshenbaum | 2023 | 500,000 | 4,500,000 | 2,534,240 | — | 119,772 | 7,654,012 | | Chief Financial Officer | 2022 | 500,000 | 3,500,000 | 12,524,000 | — | 111,226 | 16,635,226 | | | 2021 | 500,000 | 3,233,781 | 3,662,481 | — | 55,046 | 7,451,308 | | Craig W. Packer | 2023 | 500,000 | — | 12,955,151 | — | 189,334 | 13,644,485 | | Co-President | 2022 | 500,000 | — | 10,692,000 | — | 170,143 | 11,362,143 | | Michael D. Rees | 2023 | 500,000 | — | 17,612,511 | — | 216,395 | 18,328,906 | | Co-President | 2022 | 500,000 | — | 5,064,998 | — | 212,863 | 5,777,861 | | | 2021 | 311,546 | — | 693,673,522 | 6,606,809 | 75,616 | 700,667,493 | | Sean Ward | 2023 | 500,000 | 9,256,960 | 2,871,776 | — | — | 12,628,736 | | Senior Managing Director | 2022 | 500,000 | 6,252,861 | 3,916,816 | — | — | 10,669,677 | | | 2021 | 311,546 | 3,829,654 | 170,614,779 | — | — | 174,755,979 |
2023 Summary Compensation Table
(1)Represents the discretionary cash bonuses described in further detail above under the section titled “Elements of Compensation — Cash Bonus Payments — Discretionary Cash Bonus Payments.” (2)Represents the grant date fair value of awards computed in accordance with ASC 718. With respect to Messrs. Ostrover, Lipschultz and Rees for 2023, represents quarterly awards of Incentive Units granted in respect of quarterly payments earned under their respective employment agreements. The amounts reported reflect the aggregate grant date fair value under ASC 718 and may not correspond to the actual value that will be recognized by the NEOs. Amounts related to the fourth quarter of 2023 were granted in February 2024, and therefore are not included in the table above. For Messrs. Kirshenbaum, Packer and Ward, represents discretionary grants of Incentive Units and RSUs. See the table below and Note 8 to our Financial Statements for additional information. (3)For 2023, represents (i) with respect to Messrs. Ostrover and Lipschultz, $655,183 for wealth management services and $18,416 for supplemental medical insurance provided to certain executives; (ii) with respect to Mr. Kirshenbaum, $108,198 for wealth management services and $11,574 for supplemental medical insurance provided to certain executives; (iii) with respect to Mr. Packer, $170,918 for wealth management services and $18,416 for supplemental medical insurance provided to certain executives; and (iv) with respect to Mr. Rees, $216,395 for wealth management services.
2023 Grants of Plan-Based Awards
2023 Grants of Plan-Based Awards The following table sets forth certain information with respect to grants of plan-based awards to our NEOs in 2023. These amounts reflect the aggregate grant date fair values calculated under ASC 718 and may not correspond to the actual value that will be recognized by the recipients.
2023 Grants of Plan-Based Awards
| | | All Other Stock Awards: Number of Shares of Stock or Units (#) | Grant Date Fair Value of Stock and Option Awards ($) | | Name | Grant Date | | | | Douglas I. Ostrover | 2/21/2023(1) | 418,576 | 5,177,785 | | | 5/11/2023(1) | 397,731 | 3,686,966 | | | 8/8/2023(1) | 353,733 | 3,979,496 | | | 11/9/2023(1) | 357,847 | 4,460,349 | | Marc S. Lipschultz | 2/21/2023(1) | 418,576 | 5,177,785 | | | 5/11/2023(1) | 397,731 | 3,686,966 | | | 8/8/2023(1) | 353,733 | 3,979,496 | | | 11/9/2023(1) | 357,847 | 4,460,349 | | Alan Kirshenbaum | 12/1/2023(2) | 200,000 | 2,534,240 | | Craig W. Packer | 2/21/2023(2) | 179,332 | 2,218,337 | | | 5/11/2023(2) | 356,891 | 3,308,380 | | | 8/8/2023(2) | 304,465 | 3,425,231 | | | 11/9/2023(2) | 321,171 | 4,003,203 | | Michael D. Rees | 2/21/2023(1) | 125,909 | 1,557,494 | | | 5/11/2023(1) | 397,731 | 3,686,966 | | | 8/8/2023(1) | 353,733 | 3,979,496 | | | 11/9/2023(3) | 673,001 | 8,388,555 | | Sean Ward | 12/1/2023(4) | 240,316 | 2,871,776 |
2023 Grants of Plan-Based Awards
(1)Represents quarterly grants of Incentive Units in an amount equal to 1.33% of the Management Fee Revenue earned with respect to the fourth quarter of 2022 and first, second and third quarters of 2023, less base salary. Amounts related to the fourth quarter of 2023 were granted in February 2024, and therefore are not included in the table above. The Incentive Units granted were fully vested upon the date of grant but subject to a lock-up period of one year from the date of grant. (2)Represents a discretionary grant of Incentive Units that was fully vested upon the date of grant but subject to a lock-up period of one year from the date of grant. (3)Represents Incentive Units granted in respect of the quarterly payment with respect to the third quarter of 2023 earned under the Rees Amendment (as defined below). Amounts related to the fourth quarter of 2023 were granted in February 2024, and therefore are not included in the table above. The Incentive Units granted were fully vested upon the date of grant but subject to a lock-up period of one year from the date of grant. (4)Represents the portion of Mr. Ward’s 2023 bonus that was deferred in the form of RSUs. The RSUs will vest in three equal installments on February 15 of 2025, 2026 and 2027.
Narrative Description to the Summary Compensation Table and the Grants of Plan-Based Awards Table for the 2023 Fiscal Year
Narrative Description to the Summary Compensation Table and the Grants of Plan-Based Awards Table for the 2023 Fiscal Year
Outstanding Equity Awards at 2023 Fiscal Year End
Outstanding Equity Awards at 2023 Fiscal Year End The following table sets forth the number of shares and units, as well as the market value of such shares and units, outstanding for our NEOs as of December 31, 2023. The dollar amounts shown in the table below do not reflect the value of compensation actually received by the NEOs.
Outstanding Equity Awards at 2023 Fiscal Year End
| | Stock Awards | | | Name | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | | Alan Kirshenbaum | 600,000 | 7,538,000(1) | | Sean Ward | 1,500,000 | 20,675,000(2) | | | 222,517 | 3,153,807(3) | | | 240,316 | 3,212,223(4) |
Outstanding Equity Awards at 2023 Fiscal Year End
(1)Represents the remaining 600,000 unvested Incentive Units granted on January 12, 2022, that will vest in three equal installments on December 15 of 2024, 2025 and 2026. (2)Represents 1,500,000 unvested Incentive Units granted on October 22, 2021, that will vest in three equal installments on August 15 of 2024, 2025 and 2026. (3)Represents 222,517 unvested RSUs granted on December 15, 2022, that will vest in three equal installments on February 15 of 2024, 2025 and 2026. (4)Represents 240,316 unvested RSUs granted on December 1, 2023, that will vest in three equal installments on February 15 of 2025, 2026 and 2027.
Option Exercises and Stock Vested in the 2023 Fiscal Year
Option Exercises and Stock Vested in the 2023 Fiscal Year The following table sets forth certain information with respect to the vesting of Blue Owl Operating Group Units in 2023, with respect to our NEOs. Amounts reflect the aggregate fair values on vesting calculated under ASC 718 and may not correspond to the actual value that will be recognized by the recipients.
Option Exercises and Stock Vested in the 2023 Fiscal Year
| | Stock Awards | | | Name | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | | Douglas I. Ostrover | 1,527,887 | 17,304,596(1) | | Marc S. Lipschultz | 1,527,887 | 17,304,596(1) | | Alan Kirshenbaum | 400,000 | 5,205,720(2) | | Craig W. Packer | 1,161,859 | 12,955,151(3) | | Michael D. Rees | 1,550,374 | 17,612,511(1) (4) |
Option Exercises and Stock Vested in the 2023 Fiscal Year
(1)Represents quarterly grants of Incentive Units in an amount equal to 1.33% of the Management Fee Revenue earned with respect to the fourth quarter of 2022 and the first, second and third quarters of 2023, less base salary. Amounts related to the fourth quarter of 2023 were granted in February 2024, and therefore are not included in the table above. The Incentive Units granted were fully vested upon the date of grant but subject to a lock-up period of one year from the date of grant. For information on the related grant dates of these awards, please see the table above under “2023 Grants of Plan-Based Awards.” (2)Represents (i) 200,000 Incentive Units that vested on December 15, 2023, related to the Incentive Units granted on January 12, 2022, that remain subject to a lock-up period of one year from the vesting date, and (ii) a discretionary grant of 200,000 Incentive Units on December 1, 2023, that was fully vested upon the date of grant but subject to a lock-up period of one year from the date of grant. (3)Represents discretionary grants of Incentive Units in 2023 that were fully vested upon the dates of grant but subject to lock-up periods of one year from each respective date of grant. For information on the related grant dates of these awards, please see the table above under “2023 Grants of Plan-Based Awards.” (4)Represents quarterly grants of Incentive Units in an amount equal to 1.33% of the Management Fee Revenue earned with respect to the fourth quarter of 2022 (less certain adjustments) and the first and second quarters of 2023, less base salary, due under the Employment Agreement in effect prior to the Rees Amendment. In addition, the amounts presented include the quarterly payment earned under the Rees Amendment in respect of the third quarter of 2023. Amounts related to the fourth quarter of 2023 were granted in February 2024, and therefore are not included in the table above. The Incentive Units granted were fully vested upon the date of grant but subject to a lock-up period of one year from the date of grant. For information on the related grant dates of these awards, please see the table above under “2023 Grants of Plan-Based Awards.”
Potential Payments upon Termination or a Change in Control
Potential Payments upon Termination or a Change in Control As described in the section titled “Narrative Description to the Summary Compensation Table and the Grant of Plan-Based Awards Table for the 2023 Fiscal Year – Written Agreements,” our NEOs have certain entitlements to payment upon termination. Under Messrs. Ostrover’s, Lipschultz’s and Rees’ employment agreements, in the event either of Messrs. Ostrover’s, Lipschultz’s or Rees’ employment had terminated for any reason other than (i) for cause or (ii) as a result of voluntary departure by such NEO prior to the fifth anniversary of the date of the Business Combination, (a) each of Messrs. Ostrover and Lipschultz would have been entitled to an annual amount equal to 1.33% of Management Fee Revenue (approximately $101,561,512 based on total GAAP management fees earned by Blue Owl in 2023) and (b) Mr. Rees would have been entitled to an amount equal to 30% of the GP Strategic Capital Aggregate Compensation Amount (as defined in the Rees Amendment) (approximately $139,516,081 based on the relevant adjusted GAAP management fees earned by Blue Owl in 2023), in each case, during the five-year Non-Compete Restricted Period. In accordance with the terms of Mr. Kirshenbaum’s letter agreement described above, in the event Mr. Kirshenbaum’s employment had terminated for any reason, he would have been entitled to receive one year of base salary and health benefits and a lump sum cash payment of $1 million to be paid upon the one-year anniversary of such termination (approximately $1,512,994 based on his base salary and health benefits in 2023).
Pension Benefits
Pension Benefits Our NEOs did not participate in or have account balances in qualified or nonqualified defined benefit plans sponsored by us. Our Board or senior management may elect to adopt qualified or nonqualified benefit plans in the future if it determines that doing so is in our best interest.
Nonqualified Deferred Compensation
Nonqualified Deferred Compensation Our NEOs did not participate in or have account balances in nonqualified defined contribution plans or other nonqualified deferred compensation plans maintained by us. The Board or senior management may elect to provide our NEOs and other employees with nonqualified defined contribution or other nonqualified deferred compensation benefits in the future if it determines that doing so is in our best interest.
Pay Ratio
Pay Ratio As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K, we determined that (i) the 2023 total compensation of Douglas I. Ostrover, our Co-Chief Executive Officer, of $18,478,195 was approximately 54 times the total compensation of our median employee in 2023 and (ii) the 2023 total compensation of Marc S. Lipschultz, our Co-Chief Executive Officer, of $18,478,195 was approximately 54 times the total compensation of our median employee in 2023. The total compensation of the median employee in 2023 was $339,247. We identified the median employee using the base salary, bonus and value of equity awards granted in fiscal year 2023 for all individuals, excluding our Co-Chief Executive Officers, who were employed by us on December 31, 2023. After identifying the median employee, we calculated annual total compensation for such employee using the same methodology we used for determining the Co-Chief Executive Officer’s compensation shown in the “2023 Summary Compensation Table.”
Pay Versus Performance
Pay Versus Performance As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(v) of Regulation S-K, we are providing the following information about the relationship between executive compensation actually paid (as defined by SEC rules) and certain financial performance of Blue Owl. We do not use any financial performance measures to link compensation actually paid to our NEOs to the Company’s performance. Accordingly, pursuant to SEC rules, we have not included a “Company-Selected Measure” or a tabular list of performance measures. For more information about our executive compensation program, please refer to the “Compensation Discussion and Analysis” above.
Pay Versus Performance
| Year | Summary Compensation Table Total for | | Compensation Actually Paid for | | Average Summary Compensation Table Total for Non-PEO NEOs ($)(3) | Average Compensation Actually Paid to Non-PEO NEOs ($)(2) | Value of Initial Fixed $100 Investment Based on: | | Net Income (Loss) ($ in Thousands) (6) | | | Mr. Ostrover (Co-PEO) ($)(1) | Mr. Lipschultz (Co-PEO) ($)(1) | Mr. Ostrover (Co-PEO) ($)(2) | Mr. Lipschultz (Co-PEO) ($)(2) | | | Total Stockholder Return ($)(4) | Peer Group Total Stockholder Return ($)(4)(5) | | | 2023 | 18,478,195 | 18,478,195 | 18,478,195 | 18,478,195 | 13,064,035 | 16,356,681 | 144 | 135 | 220,776 | | 2022 | 10,135,385 | N/A | 10,135,385 | N/A | 12,200,608 | 9,501,705 | 98 | 110 | (40,235) | | 2021 | 11,637,178 | N/A | 11,637,178 | N/A | 291,966,801 | 347,800,318 | 132 | 141 | (1,802,266) |
Pay Versus Performance
(1)In 2023, our principal executive officers (“PEOs”) were Messrs. Ostrover and Lipschultz. During 2023, Mr. Lipschultz was appointed as Co-Chief Executive Officer. In 2022 and 2021, our PEO was Mr. Ostrover. The dollar amounts represent the total compensation reported in the “Total” column of the “2023 Summary Compensation Table” for each applicable year. (2)The dollar amounts reported represent the amount of “compensation actually paid” to the PEOs and the average amount of “compensation actually paid” to the Non-PEO NEOs, as computed in accordance with Item 402(v) of Regulation S-K. See footnote (3) for the Non-PEO NEOs included for purposes of calculating the average amounts in each applicable year. The dollar amounts do not reflect the actual amount or average actual amount of compensation earned by or paid to the PEO or the Non-PEO NEOs during the applicable year. The adjustments in the table below were made to total compensation for each year to determine the compensation actually paid:
Pay Versus Performance
| Adjustments to Summary Compensation Table Totals to Determine Compensation Actually Paid | 2023 | | | | | Mr. Ostrover (Co-PEO) ($) | Mr. Lipschultz (Co-PEO) ($) | Average for Non-PEO NEOs ($) | | Total compensation as reported in the summary compensation table | 18,478,195 | 18,478,195 | 13,064,035 | | Deduction for fair value of awards granted during the covered year | (17,304,596) | (17,304,596) | (8,993,420) | | Fair value of awards granted in covered year that remain outstanding and unvested (value at end of year) | — | — | 803,056 | | Fair value as of vesting date for awards that were granted and vested during the year | 17,304,596 | 17,304,596 | 8,275,476 | | Change in fair value from end of prior year to vesting date for awards granted in prior years that vested during covered year | — | — | 207,370 | | Change in fair value from end of prior year to end of covered year for awards granted in prior years that were outstanding and unvested at end of covered year | — | — | 2,819,593 | | Dividends or other earnings paid on stock or options awards in the covered year prior to the vesting date that are not otherwise included in the total compensation for the covered year | — | — | 180,571 | | Compensation actually paid | 18,478,195 | 18,478,195 | 16,356,681 |
Pay Versus Performance
(3)During 2023, our non-PEO NEOs consisted of Messrs. Kirshenbaum, Packer, Rees and Ward. During 2022, our non-PEO NEOs consisted of Messrs. Kirshenbaum, Lipschultz, Packer and Ward. During 2021, our non-PEO NEOs consisted of Messrs. Kirshenbaum, Rees, Ward and Zahr. The dollar amounts represent the average of the total compensation reported for non-PEO NEOs as a group (excluding our PEO for such year) in the “Total” column of the “2023 Summary Compensation Table” for each applicable year. (4)Total Stockholder Return and Peer Group Stockholder Return assumes $100 invested at December 31, 2020. (5)The peer group referenced for purposes of the Total Stockholder Return is the Dow Jones U.S. Asset Managers Index. (6)Represents the amount of consolidated and combined net income (loss) reflected in our audited financial statements for each applicable fiscal year.
Pay Versus Performance Comparative Disclosure
Pay Versus Performance Comparative Disclosure As previously discussed, we do not use any financial performance measures to link compensation actually paid to our NEOs to the Company’s performance. In accordance with Item 402(v) of Regulation S-K, the Company is providing the following descriptions of the relationships between the information presented in the table above. Compensation Actually Paid and Total Stockholder Returns We do not use total stockholder return as a performance measure in our overall executive compensation program, and, as a result, there is not a direct correlation between the amount of “compensation actually paid” to the PEOs and the average amount of “compensation actually paid” to the non-PEO NEOs as set forth in the table. As demonstrated in the table above, “compensation actually paid” to our PEOs and non-PEO NEOs directionally moved consistent with total stockholder returns for the Company and the peer group in 2023 compared to 2022 and 2022 compared to 2021. Compensation Actually Paid and Net Income (Loss) We do not use our GAAP consolidated net income (loss) as a performance measure in our overall executive compensation program, and, as a result, there is not a direct correlation between the amount of “compensation actually paid” to the PEOs and the average amount of “compensation actually paid” to the non-PEO NEOs as set forth in the table. As demonstrated in the table above, “compensation actually paid” to our PEOs and non-PEO NEOs directionally moved consistent with GAAP consolidated net income (loss) in 2023 compared to 2022. For 2022 compared to 2021, these amounts directionally moved in the opposite direction due to the accounting impacts of the Business Combination.
COMPENSATION OF OUR DIRECTORS
COMPENSATION OF OUR DIRECTORS Each director who is not an employee of any entity related to Blue Owl (“independent directors”) is entitled to an annual cash retainer of $150,000 per year for service as a member of the Board, as well as an annual equity grant of RSUs that, during the fiscal year ended December 31, 2023, was equal to $100,000 (based on a volume-weighted average share price leading up to the grant date, which amount will differ from the grant date fair value of such awards under ASC 718 presented in the table below), which fully vest in the year following the date of grant, subject to the Board member’s continued service on our Board. As of April 23, 2024, our Board increased the annual equity grant of RSUs to equal $200,000. Members of the audit committee (other than its chair) are entitled to receive an additional cash retainer of $25,000 per year for committee service, and the chair of the audit committee is entitled to receive an additional cash retainer of $50,000 for his or her committee service. It is expected that directors affiliated with Neuberger will waive their right to any compensation payable pursuant to this program. We also reimburse independent directors for reasonable out-of-pocket expenses incurred in connection with the performance of their duties as directors, including travel expenses in connection with their attendance in-person at Board and committee meetings. Directors who are employees of or provide services to (other than as a director) any entity related to Blue Owl Capital Inc. did not receive any compensation for their services as directors. The Board periodically reviews the compensation of the independent directors in order to ensure the appropriateness of the compensation program.
2023 Director Compensation Table
2023 Director Compensation Table The following table contains information concerning the compensation paid in 2023 to non-employee directors and employee directors who were not NEOs. Messrs. Ostrover’s, Lipschultz’s, Packer’s, Rees’s and Ward’s compensation is shown in the table entitled “2023 Summary Compensation Table” and the related tables that follow.
2023 Director Compensation Table
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1)(2) | Total ($) | | Claudia A. Holz | 200,000 | 90,961 | 290,961 | | Andrew S. Komaroff (3) | — | — | — | | Stacy Polley | 175,000 | 90,961 | 265,961 | | Dana Weeks | 175,000 | 90,961 | 265,961 | | Marc Zahr (4) | — | — | — |
2023 Director Compensation Table
(1)On May 11, 2023, Mmes. Holz, Polley and Weeks each received equity grants of 9,485 RSUs pursuant to the Blue Owl, Inc. 2021 Equity Incentive Plan, each of which vests, with certain limited exceptions, on May 11, 2024. Such grants relate to the $100,000 annual equity grant described above; however, amounts in this column represent the grant date fair value of such award computed in accordance with ASC 718. See Note 8 to our Financial Statements. (2)As of December 31, 2023, the aggregate number of unvested stock awards held by each of our non-employee directors was as follows: Ms. Polley: 9,485; Ms. Holz: 9,485; Ms. Weeks: 9,485. (3)No compensation is paid to Mr. Komaroff for his services as a director. (4)Mr. Zahr is an executive officer and no additional compensation is paid to him for his services as a director. In 2023, Mr. Zahr received (i) a base salary of $500,000 and (ii) stock awards with a grant date fair value of $11,263,524 (computed in accordance with ASC 718) related to 1,006,421 Incentive Units that were fully vested upon the date of grant but subject to a lock-up period of one year from the date of grant.