Last year was a profitable one for private equity giant CVC Capital Partners, and its top brass are laughing all the way to the bank. One of Europe’s largest private equity, firms, CVC has revealed that it paid its top partners £250 million (US$509.1 million) in 2006.
Chairman Michael Smith and senior London partner Donald Mackenzie received £50 million (US$101.8 million) each. London partners Jonathan Feuer and Rob Lucas, and co-founder Hardy McLain, are also reportedly among the recipients.
The payout quickly, and predictably, drew fire from Britain’s unions, which have criticized the amount of tax private equity executives pay. And just last week, Alistair Darling, the Chancellor of the Exchequer, proposed radical changes to the capital-gains tax regime, which would make private equity firms liable for 80% more taxes than they already pay on their income.
The same debate, over how much tax private equity and hedge fund firms pay on management fees—also known as carried interest, is raging on this side of the pond.