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Compensation (Tables) | 3 Months Ended
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Mar. 31, 2021
Share-based Payment Arrangement [Abstract] |
Schedule of compensation cost for share-based payment arrangements | Newmark incurred compensation expense related to Class A common stock, limited partnership units and RSUs held by Newmark employees as follows (in thousands):
| Three Months Ended March 31,
| 2021 |  | 2020 |  |
Issuance of common stock and exchangeability expenses | $ | 1,218 |  |  | $ | 8,119 |  |  |
Allocations of net income to limited partnership units and FPUs (1) | 10,633 |  |  | 549 |  |  |
Limited partnership units amortization | (600) |  |  | 1,895 |  |  |
RSU amortization | 2,997 |  |  | 2,351 |  |  |
Equity-based compensation and allocations of net income to limited partnership units and FPUs | $ | 14,248 |  |  | $ | 12,914 |  |  |
(1)Certain limited partnership units receive quarterly allocations of net income and are generally contingent upon services being provided by the unit holders, including the Preferred Distribution. Compensation expense related to the issuance of Newmark or BGC Class A common stock and grants of exchangeability on Newmark Holdings and BGC Holdings limited partnership units to Newmark employees is as follows (in thousands):
| Three Months Ended March 31, |  |
| 2021 |  | 2020 |  |  |  |  |  |
Issuance of common stock and exchangeability expenses | $ | 6,611 |  |  | $ | 2,474 |  |  |  |  |  |  |
Newmark recognized compensation expense related to these limited partnership units that were not redeemed as follows (in thousands):
| Three Months Ended March 31,
| 2021 |  | 2020 |  |
Limited partnership units amortization | $ | (600) |  |  | $ | 1,895 |  |  |
Compensation expense related to these limited partnership units held by Newmark employees was as follows (in thousands):
| Three Months Ended March 31, |  |
| 2021 |  | 2020 |  |  |  |  |  |
Issuance of common stock and exchangeability expenses | $ | (5,394) |  |  | $ | 5,645 |  |  |  |  |  |  |
Compensation expense related to Newmark and BGC RSUs are as follows (in thousands):
| Three Months Ended March 31,
| 2021 |  | 2020 |  |
RSU amortization | $ | 2,997 |  |  | $ | 2,351 |  |  |
Schedule of activity associated with limited partnership units | A summary of the activity associated with limited partnership units held by Newmark employees is as follows:
| Newmark Units |  | BGC Units
Balance, January 1, 2020 | 60,800,852 |  | (1) | 56,053,701 |
Issued | 12,569,298 |  |  | 1,071,612 |
Redeemed/exchanged units | (6,660,984) |  |  | (2,657,901) |
Forfeited units/other | (82,981) |  |  | (45,410) |
Balance, December 31, 2020 | 66,626,185 |  |  | 54,422,002 |
Issued | 1,115,181 |  |  | 159,057 |
Redeemed/exchanged units | (3,450,288) |  |  | (1,989,419) |
Forfeited units/other | (158,167) |  |  | (848,335) |
March 31, 2021 | 64,132,911 |  |  | 51,743,305 |
Total exchangeable units outstanding(2): |  |  |
December 31, 2020 | 9,906,763 |  |  | 24,863,107 |
March 31, 2021 | 9,464,391 |  |  | 23,387,428 |
(1)Includes the pre-IPO Newmark employees share-equivalent limited partnership units in BGC Holdings. (2)The Limited Partnership table above also includes partnership units issued for consideration for acquisitions. As of March 31, 2021, there were 4.8 million partnership units in Newmark Holdings outstanding, of which 1.6 million units were exchangeable, and 8.4 million partnership units in BGC Holdings outstanding, of which 3.7 million were exchangeable. As of December 31, 2020, there were 5.3 million partnership units in Newmark Holdings outstanding, of which 2.0 million units were exchangeable, and 9.1 million partnership units in BGC Holdings outstanding, of which 4.5 million were exchangeable. The Limited Partnership Units table above includes both regular and Preferred Units. The Preferred Units are not entitled to participate in partnership distributions other than with respect to the Preferred Distribution (see Note 2 — “Limited Partnership Interests in BGC Holdings and Newmark Holdings” for further information on Preferred Units). Subsequent to the Spin-Off, there are remaining partners who hold limited partnership interests in Newmark Holdings who are BGC employees, and there are remaining partners who hold limited partnership interests in BGC Holdings who are Newmark employees. These limited partnership interests represent interests that were held prior to the Newmark IPO or were distributed in connection with the Separation. Following the Newmark IPO, employees of Newmark and BGC received limited partnership interests in Newmark Holdings and BGC Holdings, respectively. As a result of the Spin-Off, as the existing limited partnership interests in Newmark Holdings held by BGC employees and the existing limited partnership interests in BGC Holdings held by Newmark employees are exchanged/redeemed, the related capital can be contributed to and from Cantor, respectively. The compensation expenses under GAAP related to the limited partnership interests are based on the company where the partner is employed. Therefore, compensation expenses related to the limited partnership interests of both Newmark and BGC but held by a Newmark employee are recognized by Newmark. However, the Newmark Holdings limited partnership interests held by BGC employees are included in the Newmark share count and the BGC Holdings limited partnership interests held by Newmark employees are included in the BGC share count. A summary of the BGC Holdings and Newmark Holdings limited partnership units held by Newmark employees is as follows:
| Newmark Units |  | BGC Units
Regular units | 59,897,905 |  |  | 50,291,393 |
Preferred Units | 4,235,006 |  |  | 1,451,912 |
Balance, March 31, 2021 | 64,132,911 |  |  | 51,743,305 |
Schedule of units redeemed | A summary of units held by Newmark employees redeemed in connection with the issuance of Newmark or BGC Class A common stock (at the current exchange ratio) or granted exchangeability for Newmark or BGC Class A common stock is as follows:
| Three Months Ended March 31, |  |
| 2021 |  | 2020 |  |  |  |  |  |
BGC Units | 46,605 |  |  | 149,280 |  |  |  |  |  |  |
Newmark Units | 639,939 |  |  | 142,441 |  |  |  |  |  |  |
Total | 686,544 |  |  | 291,721 |  |  |  |  |  |  |
Schedule of limited partnership units with a post-termination payout | Limited partnership units with a post-termination payout held by Newmark employees are as follows (dollars in thousands):
| March 31, 2021 |  | December 31, 2020
Notional Value(1) | $ | 255,356 |  |  | $ | 257,771 |
Estimated fair value of the post-termination payout(2) | $ | 67,839 |  |  | $ | 68,682 |
Outstanding limited partnership units in BGC Holdings | 4,754,973 |  |  | 4,873,040 |
Outstanding limited partnership units in BGC Holdings - unvested | 734,957 |  |  | 873,822 |
Outstanding limited partnership units in Newmark Holdings | 20,375,058 |  |  | 20,184,716 |
Outstanding limited partnership units in Newmark Holdings - unvested | 9,994,672 |  |  | 9,778,078 |
(1)Beginning January 1, 2018, Newmark began granting stand-alone limited partnership units in Newmark Holdings to Newmark employees. (2)Included in “Other long-term liabilities” on the accompanying unaudited condensed consolidated balance sheets. Liability balance also includes $6.8 million of post-termination units issued as consideration for acquisition.
Schedule of grant of conversion rights |
| March 31, 2021 |  | December 31, 2020
Notional Value | $ | 209,528 |  |  | $ | 218,520 |
Estimated fair value of limited partnership units (1) | $ | 192,539 |  |  | $ | 208,029 |
(1)Included in “Other long-term liabilities” on the accompanying unaudited condensed consolidated balance sheets.
Schedule of activity associated with restricted stock units | A summary of the activity associated with Newmark and BGC RSUs held by Newmark employees is as follows (fair value amount in thousands):
| Newmark RSUs(1) |  | BGC RSUs(2)
| Restricted Stock Units | Weighted- Average Grant Date Fair Value Per Share | Fair Value Amount | Weighted- Average Remaining Contractual Term (Years) |  | Restricted Stock Units | Weighted- Average Grant Date Fair Value Per Share | Fair Value Amount | Weighted- Average Remaining Contractual Term (Years)
Balance, January 1, 2020 | 4,683,571 |  | $ | 7.55 |  | $ | 35,361 |  | 5.69 |  | 46,807 |  | $ | 9.97 |  | $ | 467 |  | 0.25
Granted | 7,337,460 |  | 7.96 |  | 58,415 |  |  |  | 7,912 |  | 3.69 |  | 29 |  |
Settled units (delivered shares) | (1,151,507) |  | 8.29 |  | (9,549) |  |  |  | (45,544) |  | 9.95 |  | (453) |  |
Forfeited units | (222,727) |  | 7.78 |  | (1,733) |  |  |  | (1,162) |  | 10.64 |  | (12) |  |
Balance, December 31, 2020 | 10,646,797 |  | $ | 7.75 |  | $ | 82,494 |  | 5.69 |  | 8,013 |  | $ | 3.80 |  | $ | 31 |  | 2.17
Granted | 728,254 |  | 5.72 |  | 4,163 |  |  |  | — |  | — |  | — |  |
Settled units (delivered shares) | (1,217,149) |  | 8.04 |  | (9,785) |  |  |  | (2,638) |  | 3.69 |  | (10) |  |
Forfeited units | (124,966) |  | 5.27 |  | (658) |  |  |  | — |  | — |  | — |  |
Balance, March 31, 2021 | 10,032,936 |  | $ | 7.60 |  | $ | 76,214 |  | 5.72 |  | 5,375 |  | $ | 3.85 |  | $ | 21 |  | 1.91
(1)Beginning January 1, 2018, Newmark began granting stand-alone Newmark RSUs to Newmark employees with the awards vesting ratably over the two- to eight-year vesting period into shares of Newmark Class A common stock. (2) RSUs granted to these individuals generally vest over a two to four year period.

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