although the gp's take is strictly formulated, it appears that their compensation is not. compensation is deducted before profit drops to the bottom line. what prevents management from looting the company via their compensation? what are their incentives?
That is an excellent question and inspiration for the title. My first thought is that this will be like UROY - obnoxious management take but assets too good not to own a slice .. dyodd
although the gp's take is strictly formulated, it appears that their compensation is not. compensation is deducted before profit drops to the bottom line. what prevents management from looting the company via their compensation? what are their incentives?
That is an excellent question and inspiration for the title. My first thought is that this will be like UROY - obnoxious management take but assets too good not to own a slice .. dyodd
do you know whether management owns much stock, or is taking compensation as stock or stock options?
They don't own much compared to institutional capital, mainly cash comp from what I read.
A different take - Over 20 years:
NPV of fee revenue (1% of $34B growing at 10% annually, discounted at 10%): $6.8 billion
NPV of distributable earnings (30% margin on fee revenue, discounted at 10%): $2.04 billion, more than today's entire MC.
Note: This is for the fee generation arm of the business alone.
An investor with this mindset is likely getting an interest in $34 Billion of infrastructure assets at no extra cost..