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Compensation Plans | 12 Months Ended
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Dec. 31, 2025
Share-Based Payment Arrangement [Abstract] |
Compensation Plans | COMPENSATION PLANS Stock-Based Compensation Plans The Company has three outstanding stock-based compensation plans: the Amended and Restated 2003 Annual and Long-Term Incentive Plan (the "Incentive Plan"), the 2022 Employment Inducement Award Plan (the "2022 Inducement Plan") and the 2024 Employment Inducement Award Plan (the "2024 Inducement Plan"). The Company's equity awards are recognized on the consolidated statements of operations at grant date fair value over the service period of the award, less forfeitures. The following table provides a summary of the Company's outstanding equity awards (in shares or units, as applicable) as of December 31, 2025:
Restricted stock |
Restricted stock related to compensation plans: |
Annual grants | 395,782 |
Sign-on grants | 93,064 |
Inducement grants | 9,234 |
2022 Inducement Plan grants | 63,305 |
2024 Inducement Plan grants | 34,746 |
Total restricted stock related to compensation plans | 596,131 |
Restricted stock related to acquisitions (1) | 266,505 |
Total restricted stock | 862,636 |
Restricted stock units | 113,685 |
Stock options | 105,767 |
(1)Includes restricted stock with service conditions issued in conjunction with certain acquisitions. Incentive Plan The Incentive Plan permits the grant of equity awards, including restricted stock, restricted stock units and non-qualified stock options, to the Company's employees and directors for up to 10.9 million shares of common stock (1.8 million shares remained available for future issuance under the Incentive Plan as of December 31, 2025). The Company believes that such awards help align the interests of employees and directors with those of shareholders and serve as an employee retention tool. The Incentive Plan provides for accelerated vesting of awards if there is a severance event, a change in control of the Company (as defined in the Incentive Plan), in the event of a participant's death, and at the discretion of the compensation committee of the Company's board of directors. Restricted Stock Awards Restricted stock grants are valued at the market price of the Company's common stock on the date of grant and are amortized over the requisite service period. The Company grants shares of restricted stock to employees as part of year-end compensation ("Annual Grants") and upon initial hiring or as a retention award ("Sign-on Grants" or "Inducement Grants"). The Company's Annual Grants are made each year in February. Annual Grants vest ratably over three or four years in equal installments. Substantially all Annual Grants provide for continued vesting after termination of employment, so long as the employee does not violate certain post-termination restrictions set forth in the award agreement or any agreements entered into upon termination. The Company determined the service inception date precedes the grant date for these Annual Grants, and that the post-termination restrictions do not meet the criteria for an in-substance service condition, as defined by ASC 718. Accordingly, restricted stock granted as part of these Annual Grants is expensed in the one-year period in which those awards are deemed to be earned, which is generally the calendar year preceding the February grant date. For example, the Company recognized compensation expense during fiscal year 2025 for its February 2026 Annual Grant. If an equity award related to these Annual Grants is forfeited as a result of violating the post-termination restrictions, the lower of the fair value of the award at grant date or the fair value of the award at the date of forfeiture is recorded within the consolidated statements of operations as a reversal of compensation expense. Sign-on Grants are used as a recruiting tool for new employees and are issued to current employees as a retention tool. These awards have both cliff and ratable vesting terms, and the employees must fulfill service requirements in exchange for rights to the awards. Compensation expense is amortized on a straight-line basis from the grant date over the requisite service period, generally three to five years. Employees forfeit unvested shares upon termination of employment and a reversal of compensation expense is recorded. Inducement Grants are issued as a retention tool in conjunction with certain acquisitions. These restricted shares are subject to graded or ratable vesting terms, and employees must fulfill service requirements in exchange for the rights to the restricted shares. Compensation expense is amortized on a straight-line basis over the requisite service period, generally three to four years. Employees forfeit unvested shares upon termination of employment and a reversal of compensation expense is recorded. During 2022, the Company granted $9.3 million (65,125 shares) in restricted stock under the Incentive Plan in conjunction with its acquisitions of Cornerstone Macro Research LP, including its subsidiary, Cornerstone Macro LLC (collectively, "Cornerstone Macro") and Stamford Partners LLP. Annually, the Company grants stock to its non-employee directors. The stock-based compensation paid to non-employee directors is fully expensed on the grant date and included within outside services expense on the consolidated statements of operations. Restricted Stock Units The Company grants restricted stock units to its leadership team ("Leadership Grants"). Restricted stock units will vest and convert to shares of common stock at the end of each 36-month performance period only if the Company satisfies predetermined performance and/or market conditions over the performance period. The performance condition requires the Company to achieve certain average adjusted return on equity targets, as defined in the terms of the award agreements. The market condition requires the Company to achieve a certain total shareholder return ("TSR") relative to members of a predetermined peer group. Under the terms of these awards, the number of units that will actually vest and convert to shares will be based on the extent to which the Company achieves the specified targets during each performance period. The maximum payout leverage by grant year is as follows:
|  | Maximum Payout Leverage
Grant Year |  | Performance Condition |  | Market Condition |  | Total
2025 |  | 75% |  | 75% |  | 150%
2024 |  | 75% |  | 75% |  | 150%
2023 |  | 100% |  | 100% |  | 200%
2022 |  | 75% |  | 75% |  | 150%
2021 |  | 75% |  | 75% |  | 150%
The fair value of the performance condition portion of the award was based on the closing price of the Company's common stock on the grant date. If the Company determines that it is probable that the performance condition will be achieved, compensation expense is amortized on a straight-line basis over the 36-month performance period. The Company reevaluates achievement of the performance condition by grant year each reporting period with changes in estimated outcomes accounted for using a cumulative effect adjustment to compensation expense. Compensation expense will be recognized only if the performance condition is met. Employees forfeit unvested restricted stock units upon termination of employment with a corresponding reversal of compensation expense. As of December 31, 2025, the expected payout leverage for the performance condition portion of the award by grant year is as follows:
|  | Expected Payout
Grant Year |  | Leverage
2025 |  | 75%
2024 |  | 75%
2023 |  | 63%
The market condition must be met for the market condition portion of the award to vest. Compensation expense will be recognized regardless if the market condition is satisfied, and is amortized on a straight-line basis over the 36-month requisite service period (or earlier if age and service conditions are met, as described below). Employees forfeit unvested restricted stock units upon termination of employment with a corresponding reversal of compensation expense. The fair value of the market condition portion of the award was determined on the grant date using a Monte Carlo simulation with the following assumptions:
|  |  |  | Risk-Free |  | Expected Stock
Grant Year |  | Vesting Year |  | Interest Rate |  | Price Volatility
2025 |  | 2028 |  | 4.32% |  | 34.0%
2024 |  | 2027 |  | 4.38% |  | 34.3%
2023 |  | 2026 |  | 4.35% |  | 47.5%
2022 |  | 2025 |  | 1.80% |  | 43.8%
2021 |  | 2024 |  | 0.23% |  | 43.2%
2020 |  | 2023 |  | 1.40% |  | 27.3%
Because the vesting of the market condition portion of the award depends on the Company's TSR relative to a peer group, the valuation modeled the performance of the peer group as well as the correlation between the Company and the peer group. The expected stock price volatility assumptions were determined using historical volatility, as correlation coefficients can only be developed through historical volatility. The risk-free interest rates were determined based on three-year U.S. Treasury bond yields. The compensation committee of the Company's board of directors included defined retirement provisions in its Leadership Grants. Certain grantees meeting defined age and service requirements will be fully vested in the awards as long as performance and post-termination obligations are met throughout the performance period. These retirement-eligible grants are expensed in the period in which those awards are deemed to be earned, which is the calendar year preceding the February grant date. Stock Options On February 15, 2023 and February 15, 2018, the Company granted options to certain executive officers. These options are expensed on a straight-line basis over the required service period of five years, based on the estimated fair value of the award on the respective date of grant. The exercise price per share is equal to the closing price on the respective date of grant plus ten percent. These options are subject to graded vesting, beginning on the third anniversary of the respective grant date, so long as the employee remains continuously employed by the Company. The maximum term of these stock options is ten years. The fair value of these stock option awards was estimated on the respective date of grant using the Black-Scholes option-pricing model with the following assumptions:
| February 2023 |  | February 2018
| Grant |  | Grant
Risk-free interest rate | 3.94 | % |  | 2.82 | %
Dividend yield | 3.21 | % |  | 3.22 | %
Expected stock price volatility | 38.50 | % |  | 37.20 | %
Expected life of options (in years) | 7.0 |  | 7.0
Fair value of options granted (per share) | $ | 46.71 |  |  | $ | 24.49 |
The risk-free interest rate assumption was based on the U.S. Treasury bond yield with a maturity equal to the expected life of the options. The dividend yield assumption was based on the assumed dividend payout over the expected life of the options. The expected stock price volatility assumption was determined using historical volatility, as correlation coefficients can only be developed through historical volatility. The expected life of options assumption was determined using the simplified method due to the Company's limited exercise information. The simplified method calculates the expected term as the midpoint of the vesting term and the original contractual term of the options. Inducement Plans Inducement plan awards are amortized as compensation expense on a straight-line basis over the requisite service period. Employees forfeit unvested shares upon termination of employment and a reversal of compensation expense is recorded. The Company established the 2024 Inducement Plan in conjunction with its acquisition of Aviditi Advisors. On August 23, 2024, the Company granted $11.8 million (42,980 shares) in restricted stock. These restricted shares have both ratable and graded vesting terms with vesting periods of three or five years. The Company established the 2022 Inducement Plan in conjunction with its acquisition of DBO Partners Holding LLC, including its subsidiary, DBO Partners LLC (collectively, "DBO Partners"). On October 7, 2022, the Company granted $17.4 million (161,030 shares) in restricted stock. These restricted shares are generally subject to ratable vesting over a five-year vesting period. The Company established the 2020 Employment Inducement Award Plan (the "2020 Inducement Plan") in conjunction with its acquisition of SOP Holdings, LLC and its subsidiaries, including Sandler O'Neill & Partners, L.P. On January 3, 2020, the Company granted $96.9 million (1,217,423 shares) in restricted stock. These restricted shares had both cliff and graded vesting terms with vesting periods of 18 months, three years or five years (with a weighted average service period of 3.7 years). On April 3, 2020, the Company granted $5.5 million (114,000 shares) in restricted stock under the 2020 Inducement Plan in conjunction with its acquisition of The Valence Group ("Valence"). These restricted shares were subject to graded vesting through April 3, 2025. On December 31, 2020, the Company granted $2.9 million (29,194 shares) in restricted stock under the 2020 Inducement Plan in conjunction with its acquisition of TRS Advisors LLC ("TRS"). These restricted shares were subject to ratable vesting through December 31, 2023. The Company terminated the 2020 Inducement Plan in April 2025. The Company established the 2019 Employment Inducement Award Plan (the "2019 Inducement Plan") in conjunction with its acquisition of Weeden & Co. L.P. ("Weeden & Co."). On August 2, 2019, the Company granted $7.3 million (97,752 shares) in restricted stock. These restricted shares were subject to graded vesting through August 2, 2023. The Company terminated the 2019 Inducement Plan in August 2023. Stock-Based Compensation Activity The following table summarizes the Company's stock-based compensation activity:
|  |  | Year Ended December 31,
(Amounts in millions) |  |  |  |  | 2025 |  | 2024 |  | 2023
Stock-based compensation expense |  |  |  |  | $ | 121.8 |  |  | $ | 101.9 |  |  | $ | 92.3 |
Forfeitures |  |  |  |  | 1.8 |  |  | 2.6 |  |  | 1.9 |
Tax benefit related to stock-based compensation expense |  |  |  |  | 23.5 |  |  | 16.4 |  |  | 17.9 |
The following table summarizes the changes in the Company's unvested restricted stock:
| Unvested |  | Weighted Average
| Restricted Stock |  | Grant Date
| (in Shares) |  | Fair Value
December 31, 2022 | 4,219,826 |  |  | $ | 92.43 |
Granted | 336,093 |  |  | 153.89 |
Vested | (1,932,950) |  |  | 85.62 |
Canceled | (29,047) |  |  | 144.34 |
December 31, 2023 | 2,593,922 |  |  | $ | 104.89 |
Granted | 311,014 |  |  | 217.55 |
Vested | (1,128,342) |  |  | 99.15 |
Canceled | (36,466) |  |  | 139.97 |
December 31, 2024 | 1,740,128 |  |  | $ | 128.01 |
Granted | 194,572 |  |  | 310.86 |
Vested | (1,059,929) |  |  | 109.51 |
Canceled | (12,135) |  |  | 213.25 |
December 31, 2025 | 862,636 |  |  | $ | 190.79 |
The fair value of restricted stock that vested during the years ended December 31, 2025, 2024 and 2023 was $116.1 million, $111.9 million and $165.5 million, respectively. The following table summarizes the changes in the Company's unvested restricted stock units:
| Unvested |  | Weighted Average
| Restricted |  | Grant Date
| Stock Units |  | Fair Value
December 31, 2022 | 188,328 |  |  | $ | 115.16 |
Granted | 48,931 |  |  | 177.75 |
Vested | (56,066) |  |  | 86.01 |
Canceled | — |  |  | — |
December 31, 2023 | 181,193 |  |  | $ | 141.08 |
Granted | 33,694 |  |  | 199.39 |
Vested | (62,569) |  |  | 103.69 |
Canceled | — |  |  | — |
December 31, 2024 | 152,318 |  |  | $ | 169.34 |
Granted | 31,060 |  |  | 298.65 |
Vested | (69,693) |  |  | 148.90 |
Canceled | — |  |  | — |
December 31, 2025 | 113,685 |  |  | $ | 217.19 |
As of December 31, 2025, there was $55.4 million of total unrecognized compensation cost related to restricted stock and restricted stock units expected to be recognized over a weighted average period of 2.6 years. The following table summarizes the changes in the Company's outstanding stock options:
|  |  |  |  | Weighted Average |  |
|  |  | Weighted |  | Remaining |  |
| Options |  | Average |  | Contractual Term |  | Aggregate
| Outstanding |  | Exercise Price |  | (in Years) |  | Intrinsic Value
December 31, 2022 | 81,667 |  |  | $ | 99.00 |  |  | 5.1 |  | $ | 2,547,194 |
Granted | 75,000 |  |  | 170.76 |  |  |  |  |
Exercised | — |  |  | — |  |  |  |  |
Canceled | — |  |  | — |  |  |  |  |
Expired | — |  |  | — |  |  |  |  |
December 31, 2023 | 156,667 |  |  | $ | 133.35 |  |  | 6.5 |  | $ | 6,504,325 |
Granted | — |  |  | — |  |  |  |  |
Exercised | (8,000) |  |  | 99.00 |  |  |  |  | 1,334,949 |
Canceled | — |  |  | — |  |  |  |  |
Expired | — |  |  | — |  |  |  |  |
December 31, 2024 | 148,667 |  |  | $ | 135.20 |  |  | 5.7 |  | $ | 24,492,634 |
Granted | — |  |  | — |  |  |  |  |
Exercised | (42,900) |  |  | 99.00 |  |  |  |  | 9,341,557 |
Canceled | — |  |  | — |  |  |  |  |
Expired | — |  |  | — |  |  |  |  |
December 31, 2025 | 105,767 |  |  | $ | 149.89 |  |  | 5.7 |  | $ | 20,077,175 |
Options exercisable at: |  |  |  |  |  |  |
December 31, 2023 | 81,667 |  |  | $ | 99.00 |  |  | 4.1 |  | $ | 6,196,075 |
December 31, 2024 | 73,667 |  |  | $ | 99.00 |  |  | 3.1 |  | $ | 14,803,384 |
December 31, 2025 | 30,767 |  |  | $ | 99.00 |  |  | 2.1 |  | $ | 7,405,925 |
As of December 31, 2025, there was $1.5 million of unrecognized compensation cost related to stock options expected to be recognized over a weighted average period of 2.1 years. There was no tax benefit recorded as a result of stock option exercises for the years ended December 31, 2025 and 2024. The Company has a policy of issuing shares out of treasury (to the extent available) to satisfy share option exercises and restricted stock vesting. The Company expects to withhold approximately 0.1 million shares from employee equity awards vesting in 2026, related to employee individual income tax withholding obligations on restricted stock vesting. For accounting purposes, withholding shares to cover employees' tax obligations is deemed to be a repurchase of shares by the Company. Deferred Compensation Plans The Company maintains various deferred compensation arrangements for employees as described below. Mutual Fund Restricted Share Investment Plan The Mutual Fund Restricted Share ("MFRS") Investment Plan is a fully funded deferred compensation plan which allows eligible employees to receive a portion of their incentive compensation or retention awards in restricted mutual fund shares of investment funds. Compensation expense for MFRS awards is recognized over the period in which the award is deemed to be earned, as discussed below. Forfeitures of MFRS awards are recorded as a reduction of compensation and benefits expense within the consolidated statements of operations. The Company recorded compensation expense of $153.1 million, $82.3 million and $75.4 million for the years ended December 31, 2025, 2024 and 2023, respectively, related to MFRS awards, less forfeitures. Forfeitures were $4.6 million, $4.4 million and $1.3 million for the years ended December 31, 2025, 2024 and 2023, respectively. The Company grants MFRS awards to qualifying employees in February of each year ("Annual MFRS Awards"). Annual MFRS Awards represent a portion of these employees' compensation for performance in the preceding year, similar to the Company's Annual Grants. Annual MFRS Awards vest ratably over three or four years in equal installments. Annual MFRS Awards provide for continued vesting after termination of employment so long as the employee does not violate certain post-termination restrictions set forth in the award agreement or any agreement entered into upon termination. Annual MFRS Awards are owned by employee recipients (subject to the aforementioned vesting restrictions) and as such are not included on the consolidated statements of financial condition. The Company also grants MFRS awards for retention purposes ("Retention MFRS Awards"). As employees must fulfill service requirements in exchange for rights to these awards, compensation expense is amortized on a straight-line basis over the requisite service period. Retention MFRS Awards have both ratable and graded vesting terms with vesting periods of three to five years. The Company purchased selected mutual funds to economically hedge its obligation related to the Retention MFRS Awards. These amounts are included in investments on the consolidated statements of financial condition. The related compensation liability is included in accrued compensation on the consolidated statements of financial condition. Changes in the fair value of the investments made by the Company are reported in investment income/(loss) and changes in the corresponding compensation liability are reflected as compensation and benefits expense on the consolidated statements of operations. Nonqualified Deferred Compensation Plan The nonqualified deferred compensation plan is an unfunded plan which allows certain highly compensated employees, at their election, to defer a portion of their compensation. This plan was closed to future deferral elections by participants for performance periods beginning after December 31, 2017. The amounts deferred under this plan are held in a grantor trust. The Company invests, as a principal, in investments to economically hedge its obligation under the nonqualified deferred compensation plan. The investments in the grantor trust consist of mutual funds which are categorized as Level I in the fair value hierarchy. These investments totaled $19.3 million and $22.0 million as of December 31, 2025 and 2024, respectively, and are included in investments on the consolidated statements of financial condition. A corresponding deferred compensation liability is included in accrued compensation on the consolidated statements of financial condition. The compensation deferred by the employees was expensed in the period earned. Changes in the fair value of the investments made by the Company are reported in investment income/(loss) and changes in the corresponding deferred compensation liability are reflected as compensation and benefits expense on the consolidated statements of operations. Acquisition-Related Compensation Arrangements In conjunction with the 2025 acquisition of G Squared and the 2024 acquisition of Aviditi Advisors, additional cash may be earned if certain net revenue targets are achieved. See Note 4 for additional information. In conjunction with the 2022 acquisition of DBO Partners, additional cash of up to $25.0 million was available to be earned (the "DBO Earnout") if a net revenue target was achieved during the performance period from January 1, 2023 to December 31, 2024. As of December 31, 2024, the DBO Earnout was not earned and therefore the Company had no accrual recorded related to this additional cash payment. For the year ended December 31, 2023, the Company recorded a $1.7 million reversal of other operating expenses related to the additional cash payment with no service requirements. In conjunction with the 2022 acquisition of Cornerstone Macro, additional cash of up to $27.8 million was available to be earned based on achieving a net revenue target during the performance period from July 1, 2022 to December 31, 2023. Of the total amount, up to $6.0 million was available to be earned by Cornerstone Macro's equity owners with no service requirements. The Company paid the maximum amount of $6.0 million related to this additional cash payment in 2024. The remaining amount may be earned by the equity owners, whom are now employees of the Company, and certain employees in exchange for service requirements. The Company expects $5.2 million will be earned related to these additional cash payments, of which $2.6 million was paid in the second quarter of 2025. The Company expects the remaining $2.6 million will be paid by June 30, 2026 and has accrued $1.8 million related to this additional cash payment. Amounts estimated to be payable will be recorded as compensation expense on the consolidated statements of operations over the requisite service period. The Company recorded $1.0 million and $1.9 million in compensation expense related to these additional cash payments for the years ended December 31, 2025 and 2024, respectively and was immaterial for the year ended December 31, 2023. In conjunction with the 2020 acquisition of TRS, additional cash was available to be earned by certain employees if a revenue threshold was exceeded during the three-year post-acquisition period (the "TRS Earnout"). The Company paid the maximum amount of $7.0 million related to the TRS Earnout in 2024. Amounts payable were recorded as compensation expense on the consolidated statements of operations over the requisite service period. The Company recorded $0.5 million and $2.2 million in compensation expense related to the TRS Earnout for the years ended December 31, 2024 and 2023, respectively. In conjunction with the 2020 acquisition of Valence, additional cash was available to be earned by certain employees if a revenue threshold was exceeded during the three-year post-acquisition period (the "Valence Earnout"). The Company paid $10.0 million related to the Valence Earnout in 2023. Amounts payable were recorded as compensation expense on the consolidated statements of operations over the requisite service period. The Company recorded $2.2 million in compensation expense related to the Valence Earnout for the year ended December 31, 2023. In conjunction with the 2019 acquisition of Weeden & Co., the Company granted $10.1 million in restricted cash for retention purposes. Compensation expense was amortized on a straight-line basis over the requisite service period. The restricted cash award was subject to graded vesting, beginning on the third anniversary of the grant date through August 2, 2023. The final payment was made in 2023.

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