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Share-Based and Other Deferred Compensation | 12 Months Ended
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Dec. 31, 2019
Share-based Payment Arrangement [Abstract] |
Share-Based and Other Deferred Compensation | Share-Based and Other Deferred Compensation LP Units Equities business – In conjunction with the acquisition of the operating businesses of ISI in 2014, the Company issued Evercore LP units and interests which have been treated as compensation, including 710 vested Class E LP Units and an allocation of the value, attributed to post-combination service, of 710 Class E LP Units that vested ratably on October 31, 2015, 2016 and 2017 and became exchangeable into Class A Shares upon vesting, subject to certain liquidated damages and continued employment provisions. Compensation expense related to Class E LP Units was $17,962 for the year ended December 31, 2017. The Class E LP Units were fully expensed at December 31, 2017. The Company also issued 538 vested and 540 unvested Class G LP Interests, which vested ratably and became exchangeable into Class A Shares of the Company in February 2016, 2017 and 2018 if certain earnings before interest and taxes, excluding underwriting, ("Management Basis EBIT") margin thresholds within a range of 12% to 16%, were achieved for the calendar year preceding the date the interests become exchangeable. In the event of death, disability or termination of employment without cause, unvested Class G LP Interests could be canceled or vest based on determination of expected performance, based on a decision by Management. As of December 31, 2017, all of the Class G LP Interests either converted into Class E LP Units or were forfeited pursuant to their performance terms. In addition, in conjunction with the acquisition of ISI, the Company also issued 2,044 vested and 2,051 unvested Class H LP Interests, which would have vested ratably on February 15, 2018, 2019 and 2020. Subject to continued employment, the Company's vested Class H LP Interests would have become exchangeable in February 2018, 2019 and 2020, if certain average Management Basis EBIT and Management Basis EBIT margin thresholds, within ranges of $8,000 to $48,000 and 7% to 17%, respectively, were achieved for the three calendar years preceding the date the interests become exchangeable. In the event of death, disability or termination of employment without cause, unvested Class H LP Interests could be canceled or vest based on determination of expected performance, based on a decision by Management. In July 2017, the Company exchanged all of the previously outstanding 4,148 Class H LP Interests for 1,012 vested (963 of which were subject to certain liquidated damages and continued employment provisions) and 938 unvested Class J LP Units. These units convert into an equal amount of Class E LP Units, and become exchangeable into Class A Shares of the Company, ratably on February 15, 2018, 2019 and 2020. These Class J LP Units have the same vesting and delivery schedule, acceleration and forfeiture triggers, and distribution rights as the Class H LP Interests. In connection with this exchange, one share of Class B common stock has been issued to each holder of Class J LP Units, which entitles each holder to one vote on all matters submitted generally to holders of Class A and Class B common stock for each Class E LP Unit and Class J LP Unit held. As the number of Class J LP Units exchanged was within the number of Class H LP Interests that the Company determined were probable of being exchanged on the date of modification, the Company is expensing the previously unrecognized grant date fair value of the Class H LP Interests ratably over the remaining vesting period of the Class J LP Units. Compensation expense related to the Class J LP Units was $18,101, $15,054 and $6,020 for the years ended December 31, 2019, 2018 and 2017, respectively. On February 15, 2020, 223 Class J LP Units vested and were converted to an equal amount of Class E LP Units. Following the conversion, no Class J LP Units are issued and outstanding. Based on Evercore ISI's results for the year ended December 31, 2017, as well as the Company's revised outlook for the Evercore ISI business, the Company determined that the achievement of the remaining performance thresholds for certain of the Class G LP Interests was no longer probable at December 31, 2017. Prior to the exchange into Class J LP Units in 2017, the Company had determined that the achievement of the remaining performance thresholds for certain of the Class H LP Interests was probable at June 30, 2017, but at a lower assumed performance level than previously determined. These determinations resulted in previously recognized expense of $26,224 for certain of the Class G and H LP Interests being reversed during the first quarter of 2017. The determination assumed a Management Basis EBIT margin of 11.7% and an annual Management Basis EBIT of $26,904 being achieved in 2017 and a Management Basis EBIT margin of 14.0% and an annual Management Basis EBIT of $34,357 being achieved in 2018 and 2019 for Evercore ISI, which would have resulted in 2,005 Class H LP Interests vesting and becoming exchangeable into Class E LP Units. Accordingly, $12,897 of expense was reversed for the year ended December 31, 2017 for the Class G and H LP Interests. During the first quarter of 2017, the Company amended the terms of 19 Class E LP Units, 14 Class G LP Interests and 162 Class H LP Interests for an exiting employee. The amendment resulted in expense, included within compensation expense related to the Class E LP Units and Class G and H LP Interests above, of $3,532 for the year ended December 31, 2017, reflecting the reversal of all previous expense related to these awards and the subsequent amortization of the awards at the amended grant date fair value of $14,891. These awards were amortized ratably through June 30, 2017. The following table summarizes activity related to the LP Units for the Company's equities business during the year ended December 31, 2019:
| Class J LP Units
| Number of Units |  | Grant Date Weighted Average Fair Value
Unvested Balance at January 1, 2019 | 1,265 |  |  | $ | 24,181 |
Granted | 2 |  |  | 176 |
Modified | 76 |  |  | 4,407 |
Forfeited | (2 | ) |  | (13 | )
Vested | (1,118 | ) |  | (24,440 | )
Unvested Balance at December 31, 2019 | 223 |  |  | $ | 4,311 |
Othe r Performance-based Awards – In November 2016, the Company issued 400 Class I-P Units in conjunction with the appointment of the Executive Chairman. These Class I-P Units convert into a specified number of Class I LP Units, which are exchangeable on a one-for-one basis to Class A Shares, contingent on the achievement of certain market and service conditions, subject to vesting upon specified termination events (including retirement, upon satisfying certain eligibility criteria, on or following January 15, 2022, subject to a one year prior written notice requirement) or a change in control. These Class I-P Units are segregated into two groups of 200 units each, with share price threshold vesting conditions which are required to exceed a certain level for 20 consecutive trading days (which were met as of March 31, 2017). The Company determined the fair value of the award to be $24,412 and is expensing the award ratably over the implied service period, which ends on March 1, 2022. As the award contains market-based conditions, the entire expense will be recognized if the award does not vest for any reason other than the service conditions. Compensation expense related to this award was $4,619 for each of the years ended December 31, 2019, 2018 and 2017. In November 2017, the Company issued 64 Class K-P Units to an employee of the Company. These Class K-P Units convert into a specified number of Class K LP Units (which are exchangeable on a one-for-one basis to Class A Shares), contingent upon the achievement of certain defined benchmark results and continued service through December 31, 2021. An additional 16 Class K-P Units may be issued contingent upon the achievement of certain defined benchmark results (which were probable of achievement as of December 31, 2019) and continued service through December 31, 2021. The Company determined the value of the award probable to vest as of December 31, 2019 to be $6,250 and records expense for these units over the service period. In June 2019, the Company issued 220 Class K-P Units to an employee of the Company. These Class K-P Units convert into a number of Class K LP Units (which are exchangeable on a one-for-one basis to Class A Shares), contingent and based upon the achievement of certain defined benchmark results and continued service through February 4, 2023 for the first tranche, which consists of 120 Class K-P Units convertible into a number of Class K LP Units, and February 4, 2028 for the second tranche, which consists of 100 Class K-P Units convertible into a number of Class K LP Units. The Company determined the value of the award probable to vest as of December 31, 2019 to be $14,386 and records expense for these units over the service period. Compensation expense related to the Class K-P Units was $3,690, $1,200 and $197 for the years ended December 31, 2019, 2018 and 2017, respectively, As of December 31, 2019, the total compensation cost not yet recognized related to the Class J LP Units, Class I-P Units and Class K-P Units, including awards which are subject to performance conditions, was $25,958. The weighted-average period over which this compensation cost is expected to be recognized is 14 months. Stock Incentive Plan In 2006 the Company's stockholders and board of directors adopted the Evercore Inc. 2006 Stock Incentive Plan. The total number of Class A Shares which could be issued under this plan was 20,000. During the second quarter of 2013, the Company's stockholders approved the Amended and Restated 2006 Evercore Inc. Stock Incentive Plan. The amended and restated plan, among other things, authorized an additional 5,000 shares of the Company's Class A Shares. During 2016, the Company's stockholders approved the Amended and Restated 2016 Evercore Inc. Stock Incentive Plan (the "2016 Plan"). The 2016 Plan, among other things, authorizes an additional 10,000 shares of the Company's Class A Shares. The 2016 Plan permits the Company to grant to key employees, directors and consultants incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock, RSUs and other awards based on the Company's Class A Shares. The Company intends to use newly-issued Class A Shares to satisfy any awards under the 2016 Plan and its predecessor plan. Class A Shares underlying any award granted under the 2016 Plan that expire, terminate or are canceled or satisfied for any reason without being settled in stock again become available for awards under the plans. The total shares available to be granted in the future under the 2016 Plan was 2,872 and 5,349 as of December 31, 2019 and 2018, respectively. The Company also grants, at its discretion, dividend equivalents, in the form of unvested RSU awards, or deferred cash dividends, concurrently with the payment of dividends to the holders of Class A Shares, on all unvested RSU grants awarded in conjunction with annual bonuses, as well as new hire awards. The dividend equivalents have the same vesting and delivery terms as the underlying RSU award. The Company estimates forfeitures in the aggregate compensation cost to be amortized over the requisite service period of its awards. The Company periodically monitors its estimated forfeiture rate and adjusts its assumptions to the actual occurrence of forfeited awards. A change in estimated forfeitures is recognized through a cumulative adjustment in the period of the change. The Company had 82 RSUs which were fully vested but not delivered as of December 31, 2019. Equity Grants 2019 Equity Grants. During 2019, pursuant to the 2016 Plan, the Company granted employees 2,598 RSUs that are Service-based Awards. Service-based Awards granted during 2019 had grant date fair values of $72.11 to $96.22 per share, with an average value of $91.04 per share. During 2019, 2,473 Service-based Awards vested and 121 Service-based Awards were forfeited. Compensation expense related to Service-based Awards, including RSUs granted to the Executive Chairman in November 2016, was $208,786 for the year ended December 31, 2019. The following table summarizes activity related to Service-based Awards during the year ended December 31, 2019:
| Service-based Awards
| Number of Shares |  | Grant Date Weighted Average Fair Value
Unvested Balance at January 1, 2019 | 6,410 |  |  | $ | 468,905 |
Granted | 2,598 |  |  | 236,529 |
Modified | — |  |  | — |
Forfeited | (121 | ) |  | (10,376 | )
Vested | (2,473 | ) |  | (167,602 | )
Unvested Balance at December 31, 2019 | 6,414 |  |  | $ | 527,456 |
As of December 31, 2019, the total compensation cost related to unvested Service-based Awards not yet recognized was $266,086. The ultimate amount of such expense is dependent upon the actual number of Service-based Awards that vest. The Company periodically assesses the forfeiture rates used for such estimates. A change in estimated forfeiture rates would cause the aggregate amount of compensation expense recognized in future periods to differ from the estimated unrecognized compensation expense described herein. The weighted-average period over which this compensation cost is expected to be recognized is 23 months. 2018 Equity Grants. During 2018, pursuant to the 2016 Plan, the Company granted employees 1,968 RSUs that are Service-based Awards. Service-based Awards granted during 2018 had grant date fair values of $81.84 to $114.80 per share, with an average value of $95.01 per share. During 2018, 2,523 Service-based Awards vested and 70 Service-based Awards were forfeited. Compensation expense related to Service-based Awards, including RSUs granted to the Executive Chairman in November 2016, was $171,354 for the year ended December 31, 2018. 2017 Equity Grants. During 2017, pursuant to the 2016 Plan, the Company granted employees 2,813 RSUs that are Service-based Awards. Service-based Awards granted during 2017 had grant date fair values of $69.10 to $85.68 per share, with an average value of $78.32 per share. During 2017, 2,512 Service-based Awards vested and 154 Service-based Awards were forfeited. Compensation expense related to Service-based Awards, including RSUs granted to the Executive Chairman in November 2016, was $156,353 for the year ended December 31, 2017. Deferred Cash The Company's deferred cash compensation program provides participants the ability to elect to receive a portion of their deferred compensation in cash, which is indexed to notional investment portfolios selected by the participant and vests ratably over four years and requires payment upon vesting. The Company granted $93,366, $82,592 and $3,750 of deferred cash awards pursuant to the deferred cash compensation program during the years ended December 31, 2019, 2018 and 2017, respectively. In November 2016, the Company granted a restricted cash award in conjunction with the appointment of the Executive Chairman with a target payment amount of $35,000, of which $11,000 vested on March 1, 2019 and $6,000 is scheduled to vest on each of the first four anniversaries of March 1, 2019, provided that the Executive Chairman continues to remain employed through each such vesting date, subject to vesting upon specified termination events (including retirement, upon satisfying certain eligibility criteria, on or following May 1, 2019, subject to a six month prior written notice requirement) or a change in control. The Company had the discretion to increase (by an amount up to $35,000) or decrease (by an amount up to $8,750) the total amount payable under this award. In 2017, the Company granted deferred cash awards of $29,500 to certain employees. These awards vest in five equal installments over the period ending June 30, 2022, subject to continued employment. The Company records expense for these awards ratably over the vesting period. Compensation expense related to deferred cash awards was $93,201, $58,430 and $24,677 for the years ended December 31, 2019, 2018 and 2017, respectively. As of December 31, 2019, the total compensation cost related to deferred cash awards not yet recognized was $127,242. The weighted-average period over which this compensation cost is expected to be recognized is 25 months. 2020 Equity and Deferred Cash Grants During the first quarter of 2020, as part of the 2019 bonus awards, the Company granted to certain employees approximately 1,900 unvested RSUs pursuant to the 2016 Plan with a grant date fair value of $81.53 per share. These awards will generally vest over four years. In addition, during the first quarter of 2020, the Company granted approximately $179,000 of deferred cash to certain employees which is pursuant to the deferred cash compensation program. These awards will generally vest over four years. Long-term Incentive Plan The Company's Long-term Incentive Plan provides for incentive compensation awards to Advisory Senior Managing Directors, excluding executive officers of the Company, who exceed defined benchmark results over four-year performance periods beginning January 1, 2013 (the "2013 Long-term Incentive Plan") and January 1, 2017 (the "2017 Long-term Incentive Plan"). The 2013 Long-term Incentive Plan was paid in cash in installments in 2017, 2018 and the first quarter of 2019. The 2017 Long-term Incentive Plan, which aggregates $97,353 of long-term liabilities on the Consolidated Statement of Financial Condition as of December 31, 2019, is due to be paid, in cash or Class A Shares, at the Company's discretion, in three equal installments in the first quarter of 2021, 2022 and 2023, subject to employment at the time of payment. These awards are subject to retirement eligibility requirements after the performance criteria has been achieved. The Company periodically assesses the probability of the benchmarks being achieved and expenses the probable payout over the requisite service period of the award. The compensation expense related to these awards was $31,931, $42,745 and $31,923 for the years ended December 31, 2019, 2018 and 2017, respectively. In conjunction with this plan, the Company distributed cash payments of $19,516, $4,532 and $34,157 during the years ended December 31, 2019, 2018 and 2017, respectively. As of December 31, 2019, based on the Company's current assessment of the probability of the level of benchmarks being achieved, the total remaining expense to be accrued for the 2017 Long-term Incentive Plan over the future vesting period ending March 15, 2023 is $60,441. Employee Loans Receivable Periodically, the Company provides new and existing employees with cash payments in the form of loans and/or other cash awards which are subject to ratable vesting terms with service requirements ranging from one to five years and in certain circumstances, subject to the achievement of performance requirements. Generally, the terms of these awards include a requirement of either full or partial repayment of these awards based on the terms of their employment agreements with the Company. In circumstances where the employee meets the Company's minimum credit standards, the Company amortizes these awards to compensation expense over the relevant service period, which is generally the period they are subject to forfeiture. Compensation expense related to these awards was $20,421, $17,971 and $20,969 for the years ended December 31, 2019, 2018 and 2017, respectively. The remaining unamortized amount of these awards was $34,073 as of December 31, 2019. Other The total income tax benefit related to share-based compensation arrangements recognized in the Company's Consolidated Statements of Operations for the years ended December 31, 2019, 2018 and 2017 was $49,251, $39,958 and $53,402, respectively. The benefit for 2017 does not reflect the impact of the Tax Cuts and Jobs Act, which was enacted on December 22, 2017. See Note 22 for further information. Separation and Transition Benefits The Company granted separation benefits to certain employees, resulting in expense included in Employee Compensation and Benefits within the Investment Banking segment of approximately $8,145 for the year ended December 31, 2019. This is comprised of expense related to cash separation benefits of $6,178 and expense related to the acceleration of the amortization of share-based payments of $1,967. In conjunction with these arrangements, the Company distributed cash payments of $6,035 for the year ended December 31, 2019. The Company granted separation benefits to certain employees, resulting in expense included in Employee Compensation and Benefits of approximately $9,420 and $6,655 for the years ended December 31, 2018 and 2017, respectively. In conjunction with these arrangements, the Company distributed cash payments of $8,565 and $2,914 for the years ended December 31, 2018 and 2017, respectively. In the first quarter of 2020, the Company completed a review of its operations focused on markets, sectors and people which delivered lower levels of productivity in an effort to attain greater flexibility of operations and better position itself for future growth. This review, which began in the fourth quarter of 2019, will generate reductions of approximately 6% of the Company's headcount. In conjunction with the employment reductions, the Company is expected to incur costs (including costs related to the acceleration of deferred compensation) of approximately $38,000. The Company's estimates are based on a number of assumptions. Actual results may differ materially and additional charges not currently expected may be incurred in connection with, or as a result of, these employment reductions. In conjunction with this review, the Company granted separation and transition benefits to certain employees, resulting in expense included in Special Charges primarily within the Investment Banking segment of $2,850 for the year ended December 31, 2019. This is comprised of expense related to separation benefits and accelerated deferred cash compensation (together, "Termination Costs") of $1,578 and expense related to the acceleration of the amortization of share-based payments of $1,272. In conjunction with these arrangements, the Company distributed cash payments of $377 for the year ended December 31, 2019. The following table presents the change in the Company's Termination Costs liability for the year ended December 31, 2019:
Balance at January 1, 2019 | $ | 505 |
Termination Costs Incurred | 7,756 |
Cash Benefits Paid | (6,412 | )
Non-Cash Charges | (698 | )
Balance at December 31, 2019 | $ | 1,151 |
The Company also granted separation and transition benefits to certain employees, resulting in expense included in Special Charges of $2,024 and $3,930 for the years ended December 31, 2018 and 2017, respectively. See Note 6 for further information.

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