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The coronavirus pandemic has hit Wall Street hard. Banks, hedge funds and private equity firms are going through an unprecedented shutdown. As the biggest companies on Wall Street scramble to pump money into the economy and run their huge asset portfolios in chaos, they are also spending a lot of money on relief efforts.
KKR & Co, co-founded by billionaires Henry Kravis and George Roberts, created a $ 50 million fund to support frontline workers and ease the financial hardship created by the pandemic. The fund will be used to help first aid and health workers, as well as through various financial aid actions aimed at workers and small businesses in the communities in which they invest. In a letter, the co-founders of KKR, Kravis and Roberts, and the firm’s co-chairs, Joseph Bae et Scott Nuttall, also told investors that they would forgo any end-of-year bonus and their remaining salary in 2020. Other private equity firms have also started to set up relief funds and other forms of assistance.
Start of the week, Blackstone Group has pledged $ 10 million to fund COVID-19 First Responders of New York State. At the same time, $ 5 million was donated to organizations such as City Harvest, World Central Kitchen et Coalition for the Homeless. These organizations orchestrate the delivery of food to healthcare workers and first responders, and support vulnerable communities in New York City. Advent Boston-based International has announced the creation of a $ 25 million relief fund. A long list of companies in his healthcare and materials portfolio are also working individually to address the challenges posed by the pandemic. Meanwhile, the Vista private equity firms Equity Partners and Thoma Bravo, who dominate the software industry, have let some companies in their portfolios offer free services to key players in the fight against software. COVID-19, in addition to other forms of philanthropy.
In addition to the money set aside for relief, KKR said its leaders will forgo compensation in wages and bonuses. While Kravis, Roberts, Bae and Nuttall each earn $ 300,000 a year in salary, their incentive compensation in the form of bonuses, stock awards and deferred incentives can be huge. Last year, the four earned a total of $ 150 million, according to the documents filed.
“The capital of the relief fund of KKR will be funded by significant contributions from company executives, in addition to direct support from KKR », Declared Kravis, Roberts, Bae and Nuttall. “As part of this important initiative, we believe it is appropriate that the four of us forgo a salary as well as annual bonuses in 2020.”
It is uncertain whether lost premiums include deferred interest. In 2019, Kravis and Roberts gave their bonuses to the most important employees of KKR, while Bae and Nuttall won $ 8.3 million each.
In the turmoil of the coronavirus, some of the companies in the portfolio of KKR are also in the process of drastically reducing their activities. Bloomberg News last week reported that KKR-backed Envision Healthcare was delaying the payment of certain 2019 incentive payments to its doctors, in a move to save money amid the sudden halt to most elective health care.
« Over the past 44 years, KKR has gone through many financial crises, local disasters and global challenges. However, the coronavirus pandemic is different, both in the magnitude and depth of its impact on the global economy, local communities and our personal lives, ”said leaders of KKR in their letter. “The pandemic is wreaking havoc in every country, every industry, every household and virtually every person. “
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