Billionaire Och Sues Former Firm Sculptor Over Escalating CEO Pay
The billionaire Daniel Och on Wednesday sued Sculptor Capital Management Inc, accusing the asset manager he helped found of letting its chief executive officer wield his power over its board to extract "ever-escalating" pay despite subpar performance.
In a complaint filed in Delaware Chancery Court, Och said James Levin was paid $145.8 million in 2021, more than most other CEOs including Apple's Tim Cook, Goldman Sachs' David Solomon and JPMorgan Chase's Jamie Dimon.
Och said Sculptor's annual revenue of $626 million "cannot possibly justify" making his protege the country's 14th highest-paid CEO, while the firm's stock price lags many peers and its funds suffer from "less than mediocre" performance.
According to the complaint by Och and four of Sculptor's other "original and largest shareholders," Levin's pay was 17.7 times the median of Sculptor's peers, as measured by proxy advisory firm Institutional Shareholder Services.
The lawsuit seeks books and records concerning Levin's pay, to assess whether there were breaches of fiduciary duty related to mismanagement and waste, and whether Sculptor's board was truly independent.
According to an April regulatory filing, Levin and Och are among Sculptor's largest shareholders, and controlled a respective 20.2% and 14.4% of its voting power.
Sculptor said Levin deserved pay that is "more competitive" with that of privately held alternative asset managers.
Sculptor and an outside spokesman were not immediately available for comment after market hours.
The lawsuit was reported earlier by the Financial Times. Och is worth $3.9 billion, according to Forbes magazine.
Once known as Och-Ziff Capital Management, Sculptor is one of only a handful of publicly traded hedge fund companies, overseeing about $36.8 billion of assets as of July 1.
Its stock price has fallen 56% this year, leaving it with a market value of about $552 million, according to Refinitiv.
Levin, who is known as Jimmy, joined Sculptor in 2006, and became CEO last year. He is also the New York-based firm's chief investment officer.
One Sculptor director, Morgan Rutman, resigned early this year in protest over Levin's pay.
Sculptor changed its name in 2019, three years after Och-Ziff reached a $412 million settlement of U.S. probes into alleged bribery to win business in five African countries.
The case is Och et al v Sculptor Capital Management Inc, Delaware Chancery Court, No. 2022-0748.
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