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Share-Based and Other Deferred Compensation | 9 Months Ended
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Sep. 30, 2020
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 International Strategy & Investment ("ISI") in 2014, the Company issued Evercore LP units and interests which have been treated as compensation. In July 2017, the Company exchanged all of the previously outstanding 4,148 Class H limited partnership interests of Evercore LP ("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 converted into an equal amount of Class E LP Units, and became exchangeable into Class A Shares of the Company, ratably on February 15, 2018, 2019 and 2020. These Class J LP Units had 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 expensed 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 $1,067 for the nine months ended September 30, 2020, and $4,527 and $12,276 for the three and nine months ended September 30, 2019, 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 remain issued and outstanding. Othe r Performance-based Awards – In November 2016, the Company issued 400 Class I-P Units in conjunction with the appointment of the current Co-Chief Executive Officer (then 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 $1,164 and $3,468 for the three and nine months ended September 30, 2020, respectively, and $1,164 and $3,455 for the three and nine months ended September 30, 2019, respectively. 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 September 30, 2020) and continued service through December 31, 2021. The Company determined the value of the award probable to vest as of September 30, 2020 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 September 30, 2020 to be $21,692 and records expense for these units over the service period. Compensation expense related to the Class K-P Units was $3,066 and $5,392 for the three and nine months ended September 30, 2020, respectively, and $1,277 and $1,911 for the three and nine months ended September 30, 2019, respectively. Stock Incentive Plan During the second quarter of 2020, the Company's stockholders approved the Amended and Restated 2016 Evercore Inc. Stock Incentive Plan (the "Amended 2016 Plan"), which amended the prior Amended and Restated 2016 Evercore Inc. Stock Incentive Plan. The Amended 2016 Plan, among other things, authorizes an additional 6,000 shares of the Company's Class A Shares. The Amended 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 Amended 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 Amended 2016 Plan was 7,030 as of September 30, 2020. 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. Equity Grants During the nine months ended September 30, 2020, pursuant to the above Stock Incentive Plans, the Company granted employees 1,946 RSUs that are Service-based Awards. Service-based Awards granted during the nine months ended September 30, 2020 had grant date fair values of $44.21 to $81.53 per share, with an average value of $80.94 per share, for an aggregate fair value of $157,467, and generally vest ratably over four years. During the nine months ended September 30, 2020, 2,529 Service-based Awards vested and 103 Service-based Awards were forfeited. Compensation expense related to Service-based Awards was $46,880 and $147,352 for the three and nine months ended September 30, 2020, respectively, and $50,152 and $162,296 for the three and nine months ended September 30, 2019, respectively. 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 $179,705 and $1,460 of deferred cash awards pursuant to the deferred cash compensation program during the first and third quarters of 2020, respectively. As of September 30, 2020, the total compensation cost related to the deferred cash compensation program not yet recognized was $197,164. The weighted-average period over which this compensation cost is expected to be recognized is 31 months. In November 2016, the Company granted a restricted cash award in conjunction with the appointment of a current Co-Chief Executive Officer (then Executive Chairman) with a target payment amount of $35,000, of which $11,000 vested on March 1, 2019, $6,000 vested on March 1, 2020, and $6,000 is scheduled to vest on each of the next three anniversaries of March 1, 2020, provided that the current Co-Chief Executive Officer 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 $30,164 and $95,178 for the three and nine months ended September 30, 2020, respectively, and $20,688 and $73,456 for the three and nine months ended September 30, 2019, respectively. 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 2019. The 2017 Long-term Incentive Plan, which aggregate $34,215 of current liabilities and $68,431 of long-term liabilities on the Unaudited Condensed Consolidated Statement of Financial Condition as of September 30, 2020, 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. During the first quarter of 2020, in assessing the potential impact of the COVID-19 pandemic on the Company's full year 2020 results, management decreased its expectation for the probable payout of this plan, which resulted in a reversal of $6,810 of expense during the first quarter of 2020. This analysis included a review of both historical and projected performance for those eligible under the plan. As markets continued to stabilize during the third quarter of 2020 and Advisory activity increased, management determined it would be appropriate to increase its expectation for the probable payout of the plan. The Company recorded $9,160 and $5,339 of expense for the three and nine months ended September 30, 2020, respectively, and $8,302 and $24,928 of expense for the three and nine months ended September 30, 2019, respectively. The Company distributed cash payments of $19,516 for the nine months ended September 30, 2019 related to the 2013 Long-term Incentive Plan. As of September 30, 2020, 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 $30,627. 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 $8,101 and $16,516 for the three and nine months ended September 30, 2020, respectively, and $6,631 and $15,976 for the three and nine months ended September 30, 2019, respectively. The remaining unamortized amount of these awards was $34,852 as of September 30, 2020. Separation and Transition Benefits During the first quarter of 2020, the Company substantially completed a review of operations focused on markets, sectors and people which have 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 8% of the Company's headcount. In conjunction with the employment reductions, the Company expects to incur expense related to separation benefits and stay arrangements of approximately $27,877 and the acceleration of deferred compensation previously granted to affected employees of approximately $15,123 (which includes approximately $11,911 related to 172 RSUs). These charges are expected to be incurred in 2019 and 2020, primarily within the Investment Banking segment. The Company's estimates of charges are based on a number of assumptions. Actual results may differ materially if actual activity deviates from these assumptions. For the three and nine months ended September 30, 2020, the separation benefits, stay arrangements and accelerated deferred cash compensation (together, the "Termination Costs") resulted in expense of $4,151 and $26,967, respectively, and the acceleration of the amortization of share-based payments resulted in expense of $3,102 and $10,437, respectively, each recorded in Special Charges, Including Business Realignment Costs, primarily within the Investment Banking segment, on the Company’s Unaudited Condensed Consolidated Statements of Operations. In addition, in conjunction with the Company's review of its operations, the Termination Costs resulted in expense of $1,578 and the acceleration of the amortization of share-based payments resulted in expense of $1,272, each recorded in Special Charges, Including Business Realignment Costs, primarily within the Investment Banking segment, on the Company’s Consolidated Statements of Operations for the year ended December 31, 2019. The Company granted separation and transition benefits to certain employees, resulting in expense included in Employee Compensation and Benefits, primarily within the Investment Banking segment, of $2,762 and $7,575 for the three and nine months ended September 30, 2019, respectively. This is comprised of expense related to the Termination Costs of $2,071 and $5,664, respectively, and expense related to the acceleration of the amortization of share-based payments of $691 and $1,911, for the three and nine months ended September 30, 2019, respectively. The following table presents the change in the Company's Termination Costs liability for the nine months ended September 30, 2020:
| For the Nine Months Ended
| September 30, 2020
Balance at January 1, 2020 | $ | 1,151 |
Termination Costs Incurred | 26,967 |
Cash Benefits Paid | (18,589 | )
Non-Cash Charges | (624 | )
Balance at September 30, 2020 | $ | 8,905 |

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