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Employee Benefit Plans | 12 Months Ended
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Dec. 31, 2022
Retirement Benefits [Abstract] |
Employee Benefit Plans | Employee Benefit Plans Stock Incentive Plans 2012 Equity Incentive Plan and 2017 Equity Incentive Plan Our 2012 Equity Incentive Plan (the 2012 Plan) and 2017 Equity Incentive Plan (the 2017 Plan) were adopted by our board of directors and approved by our stockholders on May 8, 2012 and May 19, 2017, respectively. Both the 2012 Plan and 2017 Plan authorized the grant of stock-based awards to our employees, directors and independent contractors. Our 2012 Plan was terminated in May 2017 in connection with the adoption of our 2017 Plan. Our 2017 Plan was terminated in May 2019 in connection with the adoption of our 2019 Equity Incentive Plan (the 2019 Plan), which is described below. At termination of the 2012 Plan, no unissued shares from the 2012 Plan were allocated to the 2017 Plan for potential future issuance. At termination of the 2017 Plan, no unissued shares from the 2017 Plan were allocated to the 2019 Plan for potential future issuance. Since our 2012 Plan and 2017 Plan have been terminated, no new awards may be granted under them. As of December 31, 2022, assuming the maximum number of shares under our performance-based awards will later be issued, 25,290 outstanding restricted stock unit (RSU) awards to acquire shares of our Class A common stock granted under the 2012 Plan remain outstanding according to their terms, and we will continue to issue shares to the extent required under the terms of such outstanding awards. Shares underlying awards that expire, terminate or lapse under the 2012 Plan will not become available for grant under the 2017 Plan or the 2019 Plan. As of December 31, 2022, 2,604,344 RSU awards to acquire shares of our Class A common stock granted under the 2017 Plan remain outstanding according to their terms, and we will continue to issue shares to the extent required under the terms of such outstanding awards (noting that any shares granted above target will get deducted from the 2019 Plan reserve as noted below). Shares underlying awards outstanding under the 2017 Plan at termination that are subsequently canceled, forfeited or terminated without issuance to the holder thereof will be available for grant under the 2019 Plan. 2019 Equity Incentive Plan Our 2019 Plan was adopted by our board of directors on March 1, 2019 and approved by our stockholders on May 17, 2019. The 2019 Plan authorizes the grant of stock-based awards to employees, directors and independent contractors. Unless terminated earlier, the 2019 Plan will terminate on March 1, 2029. A total of 9,900,000 shares of our Class A common stock are reserved for issuance under the 2019 Plan, less 189,499 shares granted under the 2017 Plan between March 1, 2019, the date our board of directors approved the plan, and May 17, 2019, the date our stockholders approved the 2019 Plan. Additionally, as mentioned above, shares underlying awards outstanding under the 2017 Plan at termination that are subsequently canceled, forfeited or terminated without issuance to the holder thereof will be available for reissuance under the 2019 Plan. On May 27, 2022, an additional 7,700,000 shares of our Class A common stock was reserved for issuance under the 2019 Plan. As of December 31, 2022, 808,723 shares were cancelled and 795,624 shares were withheld for payment of taxes under the 2017 Plan and added to the authorized pool for the 2019 Plan, bringing the total authorized amount under the 2019 Plan to 19,014,848 shares of our Class A common stock. Shares underlying expired, canceled, forfeited or terminated awards under the 2019 Plan (other than awards granted in substitution of an award previously granted), plus those utilized to pay tax withholding obligations with respect to an award (other than an option or stock appreciation right) will be available for reissuance. Awards granted under the 2019 Plan are subject to a minimum vesting condition of one year. As of December 31, 2022, assuming the maximum number of shares under our performance-based awards will later be issued (which includes shares that could be issued over target related to performance awards issued and outstanding under the 2017 Plan), 10,087,368 shares remained available for future grants under this plan. The number of shares issued or reserved pursuant to the 2012 Plan, 2017 Plan and 2019 Plan are subject to adjustment on account of a stock split of our outstanding shares, stock dividend, dividend payable in a form other than shares in an amount that has a material effect on the price of the shares, consolidation, combination or reclassification of the shares, recapitalization, spin-off, or other similar occurrences. Non-Vested Stock Awards We have issued non-vested stock awards, including RSUs and restricted shares, in our Class A common stock to certain of our employees, independent contractors and members of our board of directors. The following is a summary of the awards granted during the years ended December 31, 2022, 2021 and 2020. •During the year ended December 31, 2022, we granted RSUs that are performance vesting in nature, with 1,223,849 reflecting the maximum number of RSUs that may be issued if all of the performance targets are satisfied at their highest levels, and 1,154,113 RSUs that are time vesting in nature. •During the year ended December 31, 2021, we granted RSUs that are performance vesting in nature, with 734,352 reflecting the maximum number of RSUs that may be issued if all of the performance targets are satisfied at their highest levels, and 969,299 RSUs that are time vesting in nature. •During the year ended December 31, 2020, we granted RSUs that are performance vesting in nature, with 910,346 reflecting the maximum number of RSUs that may be issued if all of the performance targets are satisfied at their highest levels, and 1,150,761 RSUs that are time vesting in nature. Our annual performance-vesting awards generally vest in full three years from the grant date, based on our achievement against various adjusted income per share performance targets. Our time-vesting awards generally vest 25% per year over four years from the grant date. In December 2017, we made a special grant of RSUs under our 2017 Plan (2017 Special RSU grant) to certain of our employees, with 3,288,618 reflecting the maximum number of RSUs that may be issued if all of the performance targets are satisfied at their highest levels, and 939,605 RSUs that are time vesting in nature. During 2021, we granted additional RSUs, under our 2019 Plan, to certain of our employees, with 146,080 reflecting the maximum number of RSUs that may be issued if all of the performance targets are satisfied at their highest levels. There were no time vesting RSUs associated with the 2021 grants. No such grants under the 2017 Plan were made during 2022 and 2020. As a condition to this 2017 Special RSU grant, each participant has agreed to execute a Restrictive Covenants Agreement. Each 2017 Special RSU grant (except the ones granted during 2021, which are all performance based) consisted of: (i)Total Shareholder Return (TSR) Performance RSUs with respect to 33.3% of the total number of target RSUs subject to the grant. The actual number of TSR Performance RSUs that will vest is determined by measuring our cumulative TSR against the cumulative TSR of each of the other companies comprising the S&P 500 on the Grant Date (the Comparison Group) over a six year measurement period commencing on the Grant Date and ending on December 1, 2023. For purposes of measuring TSR, the initial value of our common stock was the average closing price of such common stock for the 60 trading days immediately preceding the Grant Date and the final value of our common stock will be the average closing price of such common stock for the 60 trading days immediately preceding December 1, 2023. (ii)Time Vesting RSUs with respect to 33.3% of the total number of target RSUs subject to the grant. (iii)EPS Performance RSUs with respect to 33.3% of the total number of target RSUs subject to the grant. The actual number of EPS Performance RSUs that will vest is determined by measuring our cumulative adjusted income per share growth against the cumulative EPS growth, as reported under GAAP (GAAP EPS), of each of the other members of the Comparison Group over a six year measurement period commencing on January 1, 2018 and ending on December 31, 2023. The Time Vesting and TSR Performance RSUs subject to the 2017 Special RSU grants vest on December 1, 2023, while the EPS Performance RSUs subject to the 2017 Special RSU grants vest on December 31, 2023. In February 2022, we made a special grant of RSUs under our 2019 Plan (2022 Special RSU grant) to our CEO, with 88,715 reflecting the maximum number of RSUs that may be issued if all of the performance targets are satisfied at their highest levels, and 25,347 RSUs that are time vesting in nature. As a condition to this 2022 Special RSU grant, the CEO has agreed to execute a Restrictive Covenants Agreement. This 2022 Special RSU grant consisted of: (i)Total Shareholder Return (TSR) Performance RSUs with respect to 33.3% of the total number of target RSUs subject to the grant. The actual number of TSR Performance RSUs that will vest is determined by measuring our cumulative TSR against the cumulative TSR of each of the other companies comprising the S&P 500 on the Grant Date (the Comparison Group) over a five year measurement period commencing on January 1, 2022 and ending on December 31, 2026. For purposes of measuring TSR, the initial value of our common stock was the average closing price of such common stock for the 60 trading days immediately preceding January 1, 2022, and the final value of our common stock will be the average closing price of such common stock for the 60 trading days immediately preceding December 31, 2026. (ii)Time Based RSUs with respect to 33.3% of the total number of target RSUs subject to the grant, vesting on February 25, 2027. (iii)EPS Performance RSUs with respect to 33.3% of the total number of target RSUs subject to the grant. The actual number of EPS Performance RSUs that will vest is determined by measuring our cumulative adjusted income per share growth against the cumulative EPS growth, as reported under GAAP (GAAP EPS), of each of the other members of the Comparison Group over a five year measurement period commencing on January 1, 2022 and ending on December 31, 2026. These RSUs vest on December 31, 2026. We estimated the fair value of the TSR Performance RSUs referred to above on the dates of the grants using a Monte Carlo simulation with the following assumptions:
|  |  | Year Ended December 31 (1),
|  |  | 2022 (2) |  | 2021 (2)
Volatility of common stock |  |  | 35.55 | % |  | 42.71% - 45.80%
Expected dividend yield |  |  | 0.00 | % |  | 0.00 | %
Risk-free interest rate |  |  | 1.84 | % |  | 0.25% - 0.28%
_______________ (1)There were no grants during 2020. (2)One grant was awarded in February 2022. 2021 grants were made during different dates therefore a range of inputs is presented. In November 2021, we made a special grant of RSUs under our 2019 Plan (Segment RSU Grant) to certain of our employees in Advisory Services and GWS segments, with 1,297,345 reflecting the maximum number of RSUs that may be issued if all of the performance targets are satisfied at their highest levels, and 370,670 RSUs that are time vesting in nature. In 2022, we made additional grants under this plan, with 333,501 reflecting the maximum number of RSUs that may be issued if all of the performance targets are satisfied at the highest levels, and 95,286 RSUs that are time vesting in nature. As a condition to this Segment RSU Grant, each participant has agreed to execute a Restrictive Covenants Agreement. Each Segment RSU Grant consisted of: (i)Time Vesting RSUs with respect to 33.3% of the total number of target RSUs subject to the grant, which cliff vests on November 10, 2026. (ii)Segment Performance RSUs with respect to 33.3% of the total number of target RSUs subject to the grant. The actual number of Segment Performance RSUs that will vest is determined by measuring growth in certain segment specific metrics such as client operating profit, segment operating profit and major markets over a five year measurement period commencing on January 1, 2022 and ending on December 31, 2026. (iii)EPS Performance RSUs with respect to 33.3% of the total number of target RSUs subject to the grant. The actual number of EPS Performance RSUs that will vest is determined by measuring our cumulative adjusted earnings per share growth against the cumulative EPS growth, as reported under GAAP, to a comparative group comprised of each of the other companies comprising the S&P 500 on the grant date over a five year measurement period commencing on January 1, 2022 and ending on December 31, 2026. A summary of the status of our non-vested stock awards is presented in the table below:
| Shares/Units |  | Weighted Average Market Value Per Share
Balance at December 31, 2019 | 7,709,699 |  |  | $ | 43.89 |
Granted | 1,605,934 |  |  | 56.45 |
Performance award achievement adjustments | 560,563 |  |  | 39.89 |
Vested | (2,780,377) |  |  | 39.81 |
Forfeited | (412,407) |  |  | 48.27 |
Balance at December 31, 2020 | 6,683,412 |  |  | 47.99 |
Granted | 2,531,959 |  |  | 92.16 |
Performance award achievement adjustments | (189,930) |  |  | 49.76 |
Vested | (1,883,652) |  |  | 46.34 |
Forfeited | (292,998) |  |  | 55.80 |
Balance at December 31, 2021 | 6,848,791 |  |  | 64.10 |
Granted | 1,796,196 |  |  | 95.01 |
Performance award achievement adjustments | 409,851 |  |  | 77.99 |
Vested | (1,372,123) |  |  | 57.74 |
Forfeited | (269,636) |  |  | 79.33 |
Balance at December 31, 2022 | 7,413,079 |  |  | 73.67 |
Total compensation expense related to non-vested stock awards was $160.3 million, $184.9 million and $60.4 million for the years ended December 31, 2022, 2021 and 2020, respectively. At December 31, 2022, total unrecognized estimated compensation cost related to non-vested stock awards was approximately $235.1 million, which is expected to be recognized over a weighted average period of approximately 2.9 years. Bonuses We have bonus programs covering select employees, including senior management. Awards are based on the position and performance of the employee and the achievement of pre-established financial, operating and strategic objectives. The amounts charged to expense for bonuses were $843.1 million, $871.7 million and $557.6 million for the years ended December 31, 2022, 2021 and 2020, respectively. 401(k) Plan Our CBRE 401(k) Plan (401(k) Plan) is a defined contribution savings plan that allows participant deferrals under Section 401(k) of the Internal Revenue Code (IRC). Most of our U.S. employees, other than qualified real estate agents having the status of independent contractors under section 3508 of the IRC of 1986, as amended, and non-plan electing union employees, are eligible to participate in the plan. The 401(k) Plan provides for participant contributions as well as a company match. A participant is allowed to contribute to the 401(k) Plan from 1% to 75% of his or her compensation, subject to limits imposed by applicable law. Effective October 1, 2021, all active participants vest in company match contributions at 33% per year for each plan year they are employed. For 2021 and 2020, we contributed a 67% match on the first 6% of annual compensation for participants with an annual base salary of less than $100,000 and we contributed a 50% match on the first 6% of annual compensation for participants with an annual base salary of $100,000 or more, or who are commissioned employees (up to $150,000 of compensation). Effective January 1, 2022, we contribute 67% on the first 6% of eligible compensation contributed to the plan (up to $150,000 of eligible pay) for all employees regardless of base compensation or commissioned status. In connection with the 401(k) Plan, we charged to expense $91.1 million, $72.4 million and $83.5 million for the years ended December 31, 2022, 2021 and 2020, respectively. Participants are entitled to invest up to 25% of their 401(k) account balance in shares of our common stock. As of December 31, 2022, approximately 1.1 million shares of our common stock were held as investments by participants in our 401(k) Plan. Pension Plans We have two primary non-U.S. contributory defined benefit pension plans (major plans), both based in the U.K. Our subsidiaries maintain these plans to provide retirement benefits to existing and former employees participating in these plans. With respect to these plans, our historical policy has been to contribute annually to the plans, an amount to fund pension liabilities as actuarially determined and as required by applicable laws and regulations. Our contributions to these plans are invested by the plan trustee and, if these investments do not perform well in the future, we may be required to provide additional contributions to cover any pension underfunding. Effective July 1, 2007, we reached agreements with the active members of these plans to freeze future pension plan benefits. In return, the active members became eligible to enroll in a defined contribution plan. For these plans, as of December 31, 2022 and 2021, the fair values of pension plan assets were $221.1 million and $411.1 million, respectively, and the fair values of projected benefit obligations were $247.1 million and $437.5 million, respectively. As a result, these plans were underfunded by approximately $26.0 million and $26.4 million at December 31, 2022 and 2021, respectively. Items not yet recognized as a component of net periodic pension cost (benefit) for the major plans were $127.7 million and $119.9 million as of December 31, 2022 and 2021, respectively, and were included in accumulated other comprehensive loss in the accompanying consolidated balance sheets. During 2022, on the major plans, there were gains on plan obligations of $159.3 million as a result of changes in actuarial assumptions which was partially offset by $19.1 million in losses due to plan experience. During 2021, there were gains on plan obligations of $22.1 million as a result of changes in actuarial assumptions. As of December 31, 2022, for all plans where total projected benefit obligations exceed plan assets, projected benefit obligations and the fair value of plan assets were $339.9 million and $270.3 million as of December 31, 2022, respectively, and $524.3 million and $438.2 million as of December 31, 2021, respectively. As of December 31, 2022, for all plans where total accumulated benefit obligations exceed plan assets, accumulated benefit obligations and the fair value of plan assets were $329.5 million and $270.3 million as of December 31, 2022, respectively, and $510.6 million and $438.2 million as of December 31, 2021, respectively. Net periodic pension benefit for all plans was $3.4 million and $8.9 million for the years ended December 31, 2022 and 2021, respectively, and not material for the year ended December 31, 2020. The following table provides amounts recognized related to all of our defined benefit pension plans within the following captions on our consolidated balance sheets (dollars in thousands):
| December 31,
| 2022 |  | 2021
Other assets, net | $ | 56,192 |  |  | $ | 73,990 |
Other current liabilities | — |  |  | 19,788 |
Other liabilities | 79,513 |  |  | 69,478 |
The following table presents estimated future benefit payments over the next ten years, as of December 31, 2022. We will fund these obligations from the assets held by these plans. If the assets these plans hold are not sufficient to fund these payments, the company will fund the remaining obligations (dollars in thousands):
| 2023 |  | 2024 |  | 2025 |  | 2026 |  | 2027 |  | 2028-2032
Estimated future benefit payments for defined benefit plans | $ | 42,695 |  |  | $ | 42,054 |  |  | $ | 43,537 |  |  | $ | 44,193 |  |  | $ | 44,511 |  |  | $ | 255,444 |

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