An unusual deal gave Virginia Gov. Glenn Youngkin $8.5 million in stock. He paid $0 in tax on it.

cnbc.com:

In this article

In January 2020, Glenn Youngkin, now the Republican governor of Virginia, got some welcome news. A complex corporate transaction had gone through at the Carlyle Group, the powerful private equity company that Youngkin led as co-chief executive. Under the deal, approved by the Carlyle board and code-named «Project Phoenix,» he began receiving $8.5 million worth of Carlyle stock, tax-free, according to court documents. 

The Project Phoenix payout came on top of $54 million in compensation Youngkin had received from Carlyle during the previous two years, regulatory records show. Youngkin retired from Carlyle on Sept. 30, 2020; he won the governor's election in November 2021. 

Youngkin was not alone in receiving the 2020 windfall, according to the court documents. Eight other wealthy Carlyle officials received over $200 million worth of company shares in the deal, tax-free and paid for by the company. David M. Rubenstein, Carlyle's billionaire founder and co-chairman, received $70.5 million worth.  

Now, that transaction is under attack by a Carlyle shareholder in Delaware Chancery Court. The suit, filed last week by the city of Pittsburgh Comprehensive Municipal Pension Trust Fund, says the $344 million deal harmed Carlyle's stockholders, who received nothing in return when they funded the payday.  

Meanwhile, the Carlyle insiders who received the payouts escaped a tax bill that would have exceeded $1 billion, according to the complaint, which accuses Rubenstein, Youngkin and other Carlyle officials of lining their own pockets at the expense of people like police officers and firefighters.  

«The kind of impunity that Carlyle's control group acted with is shocking and unacceptable,» lawyers for the