🧾 What This Document Is

This is a proxy statement (DEF 14A), a formal document sent to shareholders before an annual meeting. Its job is to give shareholders the information they need to vote on key company decisions. Think of it as the official "agenda and briefing packet" for The Carlyle Group's 2026 shareholder meeting.

🏢 What The Company Does

👉 In simple terms, Carlyle is a giant investment firm. It manages money for clients like pension funds and wealthy individuals, investing in companies, real estate, and debt. It makes money by charging fees for managing these investments and by taking a cut of the profits (called "carried interest").

💰 Financial Highlights & Performance

Carlyle reported strong results for 2025, highlighting record financial performance and a 20% total shareholder return for the year. Over a three-year period (2023-2025), the return was an impressive 119%. This performance is a key backdrop for the compensation and governance proposals in this document.

🚀 Key Proposals for Your Vote

Shareholders are being asked to vote on four main items. The Board recommends voting FOR on all of them.

1. Elect 13 Directors: Vote to appoint the proposed board members for one-year terms.
2. Ratify the Auditor: Re-appoint Ernst & Young LLP as the independent accounting firm for 2026. The total fees paid to EY in 2025 were $78.1 million.
3. Approve a New Equity Plan: This is a major item. Shareholders are asked to approve an updated incentive plan that adds 19 million new shares for employee awards (bringing the total to 77.8 million shares) and extends its life to 2036.
4. "Say-on-Pay" Vote: A non-binding vote to approve the compensation of the top executives.

📦 The New Equity Plan (Item 3) – Why It Matters

The company wants to increase its "pool" of shares used to reward employees. Why?

• Align Interests: Giving executives and employees stock is meant to make them think like owners, tying their success to the stock price.
• Retain Talent: In a competitive industry, equity is a key tool to keep top performers.
• Manage Dilution: While adding shares can dilute existing shareholders, Carlyle notes it is actively managing this with a new $2.0 billion share repurchase program to buy back stock.

👉 The Bottom Line: This proposal is about fueling the company's "pay-for-performance" culture with more equity ammunition, while trying to balance the impact on current shareholders.

👥 Leadership & Governance

• CEO: Harvey M. Schwartz (age 62), who joined in 2023.
• New Co-Presidents: Mark Jenkins, Jeff Nedelman, and John C. Redett were appointed Co-Presidents effective January 1, 2026.
• New CFO: Justin V. Plouffe became CFO in 2026.
• Board Engagement: The company highlights active dialogue with owners, contacting shareholders representing 64% of outstanding shares and meeting with those holding 55%.

💸 Executive Compensation (Item 4)

The "Say-on-Pay" vote lets shareholders voice their opinion on executive pay. The document details a compensation strategy heavily focused on at-risk, performance-based pay.

• Philosophy: A very large portion of executive pay is variable (not guaranteed) and delivered in stock (RSUs and PSUs) that vests over years.
• CEO Pay Structure: Mr. Schwartz's major sign-on awards are tied directly to long-term stock price goals. For example, one award requires 110% stock price appreciation over five years for full payout.
• Shareholder Feedback: The company says it actively solicits investor views on pay and has made changes in response, like the focus on stock price appreciation awards.

⚖️ Big Picture – Strengths & Risks

• 👍 Strengths:
  • Strong recent financial and stock performance.
  • Compensation is heavily aligned with shareholder interests through equity.
  • Proactive and transparent shareholder engagement.
• ⚠️ Risks & Considerations:
  • The new equity plan increases potential share dilution.
  • Complex compensation structures can be hard to evaluate.
  • Performance is tied to volatile markets and economic conditions.

🧠 The Analogy

Managing Carlyle is like coaching a championship sports team. The proxy statement is the off-season plan: you're re-signing your star coaches (electing directors), hiring new assistant coaches (executive appointments), and designing a new bonus structure (the equity plan) to keep the entire team focused on winning the next title. You're also asking the team's owners if they approve of the star players' massive contracts (say-on-pay).

🧩 Final Takeaway

This proxy centers on renewing and refueling Carlyle's performance engine. The core message is: "We had a great year, our leadership is in place, and we need your approval for the tools—especially the expanded equity plan—to keep our team aligned and motivated for the long run."