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KKR Legal Chief Sorkin Nearly Triples Pay to $20.6 Million

March 3, 2022, 10:30 AM

KKR & Co.‘s longtime legal chief David Sorkin saw his pay package balloon to more than $20.6 million in 2021 as the investment firm reported a banner year.

His total compensation nearly tripled from the $7.2 million he was paid during 2020, according to a 10-K filed Feb. 28 by KKR.

The package included a $300,000 base salary, $4.5 million in cash payments of carried interest, and a nearly $5.5 million bonus, according to the filing. Sorkin received stock awards valued at more than $10.2 million.

Unlike the cash-focused compensation that law firm partners receive, Sorkin has long been one of the higher paid U.S. law department leaders, thanks to a mix of stock options and awards and other benefits.

KKR disclosed his pay in the same month it reported a 158% increase in distributable earnings during the fourth quarter. KKR and publicly traded rivals reported strong years with private equity exits in the U.S. reaching $850 billion, Bloomberg News reported, citing Pitchbook data.

KKR didn’t respond to a request for comment about Sorkin’s pay.

Advised Co-Founders

Sorkin, a member of KKR’s executive committee, is a former corporate partner at Simpson Thacher & Bartlett. KKR hired him in 2007 to be its first general counsel.

During his time in private practice, Sorkin advised KKR’s co-founders Henry Kravis and George Roberts on deals that made their careers, including the landmark $31 billion leveraged buyout and takeover battle for RJR Nabisco Inc. in 1988 chronicled in the best-selling book “Barbarians at the Gate.”

Kravis and Roberts, his cousin, announced last October a leadership change at KKR that saw them both become co-chairmen of the firm. Joseph Bae and Scott Nuttall took over as co-CEOs for KKR.

Bae and Nuttall were given incentive compensation packages that could see each own more than $1 billion in KKR stock, according to Bloomberg News.

Stock Award

KKR’s 10-K shows that under the firm’s equity incentive plan, Sorkin’s stock award is comprised of 300,000 restricted holdings units he received last year, with another 1 million in restricted holdings units given to Bae valued at $34.1 million.

The total market value of Sorkin-owned KKR shares that have not yet vested is $22.4 million, according to the firm’s 10-K. Securities filings show that Sorkin sold off almost $6.6 million in KKR stock last year.

KKR said it assessed Sorkin’s contributions based on “his leadership and oversight of our global legal, compliance, enterprise risk, and internal audit functions and his role with respect to the strategic initiatives undertaken by the firm,” which despite the coronavirus pandemic “experienced strong financial performance in 2021.”

Sorkin didn’t receive a stock award in either 2020 or 2019, according to statements by the New York-based private equity firm, which raised record amounts of cash last year and has bet big on the technology sector.

Sorkin’s KKR compensation was first revealed in 2010 when he played a key role on the firm’s initial public offering that year. Simpson Thacher, Sorkin’s former firm, served as securities counsel to KKR with about a half-dozen other legal advisers working for related parties on KKR’s market debut.

Blackstone, TPG

Other investment firms have also recently unveiled what their law department leaders earned during 2021.

Bloomberg Law reported earlier this week on Blackstone Inc.’s chief legal officer receiving a $17.8 million pay package last year, one in which Blackstone also paid nearly $70 million to Kirkland & Ellis.

TPG Inc., which a few years ago chose to stay private, unlike buyout industry rivals KKR and Apollo Global Management Inc., finally went public in January.

Securities filings related to that listing show that TPG general counsel Bradford Berenson was paid nearly $4.1 million last year. The bulk of Berenson’s pay was in cash in the form of a $500,000 base salary and $3 million bonus.

Berenson, a former Sidley Austin partner, joined TPG in 2017.

TPG Capital, the firm’s private equity arm, hired a new legal chief last year in Deirdre Harding, a former associate general counsel at the Goldman Sachs Group Inc.

Harding replaced Adam Fliss, who is now the top lawyer for Patient Square Capital LP, a health care investment firm founded by former KKR executive James Momtazee.

To contact the reporter on this story: Brian Baxter in New York at bbaxter@bloomberglaw.com

To contact the editors responsible for this story: Chris Opfer at copfer@bloomberglaw.com; John Hughes at jhughes@bloombergindustry.com