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Scott Bok, the chair and chief executive of Greenhill & Co, is set to collect as much as $78mn in payouts as a result of the boutique bank’s $550mn sale to Japan’s Mizuho Financial Group.
A securities filing published on Friday night revealed payments owed to Greenhill executives as well as details on how the buyout came together. The deal was signed in May less than seven weeks after an initial April 6 meeting between Bok and the head of Mizuho’s US securities business, Jerry Rizzieri.
Mizuho agreed to pay more than double Greenhill’s stock price at the time. It will maintain the Greenhill name as Bok’s team will become the Japanese firm’s M&A and restructuring advisory division, sitting within the existing Mizuho investment bank.
Bok is set to be chair of the advisory business and, according to his employment agreement, will be guaranteed bonuses of $4mn a year in 2023 and 2024 and $3mn in 2025 along with an annual base salary of $600,000. These payouts are dependent on Bok remaining employed with Mizuho and portions of the bonuses will be deferred.
According to the filing, restricted stock worth $22mn at the $15 per share deal price, previously granted to Bok, will continue to vest on its existing schedule.
Bok is also the largest individual shareholder of Greenhill with a stake of around 15 per cent, which will be cashed out at $43mn in total at closing. He has agreed to vote his shares in favour of the transaction.
Mizuho had first expressed interest in Greenhill in July last year but was rebuffed as its board believed the firm’s standalone prospects were more attractive than selling out.
However by January the downturn in deal activity, along with what Greenhill said in the Friday filing was “intense competition” in the deal advisory marketplace, as well as a $270mn loan coming due next year, led it to consider bids.
Another large financial institution, whose identity was not disclosed, had also expressed interest in Greenhill before quickly dropping out.
Greenhill was founded in 1996 by Robert Greenhill, a famed deals banker at Morgan Stanley in the 1970s and 1980s. Greenhill, now in his late eighties, remains chair emeritus and is the company’s second-largest shareholder after Bok. Bok has been chief executive since 2007 after joining Greenhill in 1997 from Morgan Stanley.
While the firm had been a standout deal adviser though the 2000s, in the last decade its performance stagnated as several high-flying copycat boutique advisers emerged. The firm shared its financial projections with Mizuho, expecting around $300mn of annual deal fees in the next three years.
In 2017, Greenhill borrowed $350mn to buy back part of its stock. Bok occasionally sold shares in the years after Greenhill’s IPO but had more recently been a buyer, most notably purchasing $10mn worth of stock for $17.25 a share as part of the 2017 recapitalisation.
After the US Securities and Exchange Commission approves the proxy filing Greenhill shareholders will vote on the deal, with the acquisition expected to close this year.
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