Multiple people with knowledge of the matter said that Carlyle Group's ousted chief executive asked for a pay package worth up to $300 million over five years and resigned after its co-founders refused to even discuss the deal.

Ahead of planned talks with the board over a new five year contract, Lee crafted the deal during negotiations with his consultants and Carlyle. The performance of the private equity group's stock was used to calculate the share-based pay package.

The people said that the group's board would not engage in talks on the proposal and would not respond to Lee's detailed submission. After this, the firm decided to find a new leader.

One of the world's best-known private equity groups has been hit by Lee's departure. Since the news broke, Carlyle's share price has fallen by more than a billion dollars.

On Friday, Carlyle sent out invitations to a dinner that Lee was going to host in New York in the fall.

Lee and Glenn Youngkin were appointed as co-chief executives of Carlyle in order to show that a younger generation was in charge. When Youngkin stepped down in 2020, Lee took the reins. His departure leaves Carlyle's succession plans in a mess.

His pay proposal was designed to bring his remuneration closer in line with peers at KKR and Apollo Global, but it would still have been lagging behind its larger rivals.

The majority of his package was comprised of performance-driven stock awards. His annual salary was $275,000 and he received a cash bonus of $5.5 million.

One of the people with knowledge of the details said that Carlyle's market value would have had to double in order for Lee to earn $300 million.

What has become a new standard for the largest publicly traded private equity firms was modeled on Lee's new compensation request.

The fact that Carlyle was smaller than some of its competitors was accounted for. In a best-case scenario, the KKR co-chief executives will be paid more than $1 billion in stock in the next five years.

There are multiyear stock awards that can be worth hundreds of millions of dollars if the share price goes up.

If Carlyle's shares fell, Lee's proposed contract would be worthless, since it would have paid him hundreds of millions of dollars. It was necessary for Carlyle's share price to stay high during Lee's contract.

As Lee's existing agreement was due to expire at the end of the year, Lee's lawyers and consultants were working with Carlyle's head of human resources to come up with a new deal.

The people familiar with the details said that Lee saw the lack of progress as a sign that Carlyle's septuagenarian founders wanted a new leader.

The board of directors of Carlyle met on Sunday and decided to let Lee go at the end of the year. Soon after, Lee resigned. The group is looking for a new leader.

A person declined to speak. Carlyle didn't say anything.