Sculptor Capital Management as of the start of the month managed about $37.9 billion, according to an earlier company filing.
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A director resigned from the board of Sculptor Capital Management, alleging governance failures including “staggering” compensation awarded to the largest publicly traded U.S. hedge-fund firm’s CEO.
The allegations and resignation, detailed in a letter to the board Sculptor disclosed Thursday, have echoes of a past fight between firm founder Daniel S. Och and his onetime protégé, Chief Executive James Levin. Mr. Levin became CEO of the firm, formerly known as Och-Ziff Capital Management, SCU -2.53% after a pitched succession battle in 2018 that led Mr. Och to step back.
The director who resigned in late January, Morgan Rutman, was nominated to the board by Mr. Och and joined in 2019. Mr. Rutman, also the chief executive of Mr. Och’s family office, cited as examples of governance failures the board’s decision to award Mr. Levin 2021 pay that a consultant for the board’s compensation committee estimated could approach $200 million and dilute public shareholders to a rare degree.
Sculptor in its Thursday filing said the letter was “filled with significant factual inaccuracies, material omissions and baseless assertions that present a misleading view of board governance.”
The company also said the pay was “in the best interests of the Company and its shareholders.”
Mr. Rutman alleged the board didn’t do adequate work to determine whether Mr. Levin’s pay was merited or whether it would “reward mediocrity.” He also said Mr. Levin’s direct report, Wayne Cohen, also a board member, was allowed to vote on the compensation package over Mr. Rutman’s objections, reaching the five votes needed to approve the agreement.
“I must resign now because of the persistent failures of the board to grapple with the issues that led to that result and which make my continued service untenable,” Mr. Rutman wrote.
Sculptor as of Feb. 1 managed about $37.9 billion, according to an earlier company filing.
Write to Juliet Chung at [email protected]
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Appeared in the February 4, 2022, print edition as ‘Sculptor Director Quits, Criticizes Governance.’
