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Incentive Plans | 12 Months Ended
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Dec. 31, 2023
Share-Based Payment Arrangement [Abstract] |
Incentive Plans | INCENTIVE PLANS Share-Based Incentive Plan Awards A description of the Company’s 2018 Plan and 2008 Incentive Compensation Plan (the “2008 Plan”) and activity with respect thereto during the years ended December 31, 2023, 2022 and 2021 is presented below. Shares Available Under the 2018 Plan and 2008 Plan Total shares available for issuance under incentive compensation plans are primarily from the 2018 Plan, which became effective on April 24, 2018. The aggregate number of shares authorized for issuance under the 2018 Plan is 50,000,000. Such shares may be issued pursuant to the grant or exercise of stock options, stock appreciation rights, restricted stock units (“RSUs”), performance-based restricted stock units (“PRSUs”), restricted stock awards (“RSAs”), profits interest participation rights (“PIPRs”), and other share-based awards, as further discussed below. The 2008 Plan authorized the issuance of shares of common stock pursuant to the grant or exercise of stock options, stock appreciation rights, RSUs, PRSUs and other share-based awards. The 2008 Plan was terminated on April 24, 2018, although outstanding deferred stock unit (“DSU”) awards granted under the 2008 Plan before its termination continue to be subject to its terms. Expense The following reflects the expense recorded with respect to share-based incentive plans within “compensation and benefits” expense (with respect to RSUs, PRSUs, RSAs and PIPRs) and “professional services” expense (with respect to DSUs) within the Company’s accompanying consolidated statements of operations:
| Year Ended December 31,
| 2023 |  | 2022 |  | 2021
Share-based incentive awards: |  |  |  |  |
RSUs | $ | 165,435 |  |  | $ | 125,664 |  |  | $ | 124,895 |
PRSUs | 2,488 |  |  | 2,011 |  |  | 6,136 |
RSAs | 25,073 |  |  | 23,923 |  |  | 17,765 |
PIPRs | 55,712 |  |  | 86,810 |  |  | 83,046 |
DSUs | 1,862 |  |  | 2,233 |  |  | 2,116 |
Total | $ | 250,570 |  |  | $ | 240,641 |  |  | $ | 233,958 |
Compensation and benefits expense relating to share-based awards with service and/or performance conditions is reversed if the awards are forfeited due to these conditions not being met. Compensation and benefits expense relating to share-based awards with market-based conditions is not reversed if these awards are forfeited based solely on failing to meet such market-based conditions. The Company periodically assesses forfeiture rates, including as a result of any applicable performance conditions. A change in estimated forfeiture rates or performance results in a cumulative adjustment to compensation and benefits expense and also would cause the aggregate amount of compensation expense recognized in future periods to differ from the estimated unrecognized compensation expense described below. The Company’s share-based incentive plans and awards are described below. RSUs, PRSUs and DSUs RSUs generally require future service as a condition for vesting (unless the recipient is then eligible for retirement under the Company’s retirement policy) and convert into shares of common stock on a one-for-one basis after the stipulated vesting periods. The grant date fair value of the RSUs, net of an estimated forfeiture rate, is expensed over the requisite service periods (generally, one-third after two years and the remaining two-thirds after the third year), and is adjusted for actual forfeitures over such period. RSUs generally include a dividend participation right that provides that, during the applicable vesting period, each RSU is attributed additional RSUs equivalent to any dividends paid on common stock during such period. During the year ended December 31, 2023, dividend participation rights required the issuance of 711,673 RSUs and the associated charge to “retained earnings” (with corresponding credits to “additional paid-in-capital”) was $21,638. In connection with RSUs that settled during the year ended December 31, 2023, the Company satisfied its minimum statutory tax withholding requirements in lieu of delivering 1,213,264 shares of common stock during the year. Accordingly, 2,158,820 shares of common stock, respectively, held by the Company were delivered during the year ended December 31, 2023. PRSUs are RSUs that are subject to performance-based and service-based vesting conditions, and beginning with awards granted in February 2021, a market-based condition. The number of shares of common stock that a recipient receives upon vesting of a PRSU is calculated by reference to certain performance-based and market-based metrics that relate to Lazard Ltd’s performance over a three-year period. The target number of shares of common stock subject to each PRSU is one; however, based on the achievement of both the performance-based and market-based conditions, the number of shares of common stock that may be received will range from zero to 2.4 times the target number. PRSUs vest on a single date approximately three years following the date of the grant, provided the applicable service and performance conditions are satisfied. PRSUs include dividend participation rights that are subject to the same vesting restrictions (including performance conditions) as the underlying PRSUs to which they relate and are settled in cash at the same rate that dividends are paid on common stock. Compensation expense recognized for PRSU awards is determined by multiplying the number of shares of common stock underlying such awards that, based on the Company’s estimate, are considered probable of vesting, by the grant date fair value. Non-executive members of the Board of Directors (“Non-Executive Directors”) receive a portion of their compensation for service on the Board of Directors and its committees in the form of DSUs and can elect to receive the cash-portion of their compensation in DSUs in lieu of cash. Total DSUs granted to Non-Executive Directors during the year ended December 31, 2023 were 62,654. DSUs are convertible into shares of common stock on a one-for-one basis at the time of cessation of service to the Board of Directors. DSUs include a cash dividend participation right equivalent to dividends paid on common stock. DSU awards are expensed at their fair value on their date of grant. The following is a summary of activity relating to RSUs, PRSUs and DSUs for the year ended December 31, 2023:
| RSUs |  | PRSUs |  | DSUs
| Units |  | Weighted Average Grant Date Fair Value |  | Units |  | Weighted Average Grant Date Fair Value |  | Units |  | Weighted Average Grant Date Fair Value
Balance, January 1, 2023 | 9,022,917 |  | $ | 37.97 |  |  | 94,690 |  | $ | 39.27 |  |  | 400,820 |  | $ | 37.66 |
Granted (including 711,673 RSUs relating to dividend participation) | 5,700,485 |  | $ | 36.49 |  |  | – |  | $ | – |  |  | 62,654 |  | $ | 29.71 |
Forfeited | (282,967) |  | $ | 35.37 |  |  | – |  | $ | – |  |  | - |  | $ | – |
Settled | (3,372,084) |  | $ | 41.65 |  |  | – |  | $ | – |  |  | (134,744) |  | $ | 36.21 |
PRSUs performance units earned (a) |  |  |  |  | 30,775 |  | $ | 46.63 |  |  |  |  |
Balance, December 31, 2023 | 11,068,351 |  | $ | 36.15 |  |  | 125,465 |  | $ | 41.07 |  |  | 328,730 |  | $ | 36.74 |
_____________________ (a)Represents PRSUs earned during the fiscal year under the performance conditions of previously-granted PRSU awards in excess of the target payout levels of such awards. The weighted-average grant date fair value of RSUs granted in 2023, 2022 and 2021 was $36.49, $33.73 and $43.38, respectively. The weighted-average grant date fair value of PRSUs granted in 2022 and 2021 was $35.44 and $46.63, respectively. The weighted-average grant date fair value of DSUs granted in 2023, 2022 and 2021 was $29.71, $35.78 and $46.75, respectively. As of December 31, 2023, the total estimated unrecognized compensation expense of RSUs and PRSUs was $122,498 and $1,185, respectively. The Company expects to expense such amounts over weighted-average periods of approximately 0.9 and 0.4 years, respectively, subsequent to December 31, 2023. RSAs The following is a summary of activity related to RSAs associated with compensation arrangements during the year ended December 31, 2023:
| RSAs |  | Weighted Average Grant Date Fair Value
Balance, January 1, 2023 | 1,266,424 |  | $ | 36.99 |
Granted (including 94,985 relating to dividend participation) | 670,064 |  | $ | 37.60 |
Forfeited | (15,897) |  | $ | 39.14 |
Settled | (684,645) |  | $ | 39.13 |
Balance, December 31, 2023 | 1,235,946 |  | $ | 36.10 |
The weighted-average grant date fair value of RSAs granted in 2023, 2022 and 2021 was $37.60, $33.37 and $43.80, respectively. In connection with RSAs that settled during the year ended December 31, 2023, the Company satisfied its minimum statutory tax withholding requirements in lieu of delivering 279,385 shares of common stock during the year. Accordingly, 405,260 shares of common stock held by the Company were delivered during the year ended December 31, 2023. RSAs generally include a dividend participation right that provides that during the applicable vesting period each RSA is attributed additional RSAs equivalent to any dividends paid on common stock during such period. During the year ended December 31, 2023, dividend participation rights required the issuance of 94,985 RSAs and the associated charge to “retained earnings” (with corresponding credits to “additional paid-in-capital”) was $2,977. At December 31, 2023, estimated unrecognized RSAs expense was $15,967, with such expense to be recognized over a weighted average period of approximately 0.8 years subsequent to December 31, 2023. Profits Interest Participation Rights Profits interest participation rights (“PIPRs”) are equity incentive awards that, subject to certain vesting and other conditions described below, may be exchanged for shares of common stock pursuant to the 2018 Plan. They are a class of membership interests in Lazard Group that are intended to qualify as “profits interests” for U.S. federal income tax purposes and are recorded as noncontrolling interests within stockholders’ equity in the Company’s consolidated statements of financial condition until they are exchanged into common stock, at which time there is a reclassification to additional paid-in-capital. PIPRs,with the exception of Stock Price PIPRs (“SP-PIPRs”), as explained below, generally provide for vesting approximately three years following the grant date, so long as applicable vesting and other conditions have been satisfied. Like outstanding RSUs and similar awards, PIPRs are subject to continued employment and other conditions and restrictions and are forfeited if those conditions and restrictions are not fulfilled. A recipient generally realizes value from PIPRs only to the extent that applicable vesting and other conditions are satisfied, and an amount of economic appreciation in the assets of Lazard Group occurs as necessary to satisfy certain partnership tax rules (referred to as the “Minimum Value Condition”), otherwise the PIPRs will be forfeited. Upon satisfaction of such conditions, PIPRs that are in parity with the value of common stock will be exchanged on a one-for-one basis for shares of common stock. If forfeited based solely on failing to meet the Minimum Value Condition, or, if applicable, common stock price milestones as described below, the associated compensation expense would not be reversed. All PIPR awards are subject to service-based vesting conditions. In addition to PIPR awards with only service-based vesting conditions (“Ordinary PIPRs”) granted to certain of our executive officers and a limited number of employees, the Company has granted the following types of PIPRs to certain of our executive officers, that are subject to additional vesting and market-based conditions: •Performance PIPRs (“P-PIPRs”), which are subject to service-based and performance-based vesting conditions, and beginning in February 2021, incremental market-based conditions. •SP-PIPRs, which are subject to service-based vesting conditions and common stock price milestones and are eligible to vest in three tranches. The number of shares of common stock that a recipient will receive upon the exchange of a P-PIPR award is calculated by reference to applicable performance-based vesting conditions and, beginning with P-PIPRs granted in 2021, incremental market-based conditions and only result in value to the recipient to the extent the vesting and other conditions are satisfied. The target number of shares of common stock subject to each P-PIPR is one. Based on the achievement of performance conditions, as determined and approved by the Compensation Committee, the number of shares of common stock that may be received in connection with the P-PIPR awards granted prior to February 2021 will range from zero to two times the target number. For the P-PIPR awards granted beginning in February 2021, subject to both performance-based and incremental market-based conditions, the number of shares that may be received will range from zero to 2.4 times the target number. Unless applicable vesting and other conditions are satisfied during the three-year performance period, and the Minimum Value Condition is satisfied within five years following the grant date, all P-PIPRs will be forfeited. SP-PIPRs are eligible to vest in three tranches (each, a “Tranche”) based on the achievement of service conditions and Tranche-specific common stock price milestones measured as of a specified anniversary of the date of grant, as described below. Their aggregate fair value at the grant date, which based on the estimated probability of achieving the common stock price milestones is approximately $33,900, is expensed over the requisite service periods. SP-PIPRs will vest: •20% if, during the three years following the date of grant, the Company’s common stock price has appreciated 25% above the average trailing 30 consecutive day stock price preceding the date of grant (the “Grant Date Stock Price”); •40% if, during the five years following the date of grant, the Company’s common stock price has appreciated 50% above the Grant Date Stock Price; •40% if, during the seven years following the date of grant, the Company’s common stock price has appreciated 100% above the Grant Date Stock Price. Each Tranche is subject to the executive’s continued employment through the applicable anniversary of the date of grant and requires that the applicable common stock price milestone is sustained for any 30 consecutive day period prior to the anniversary of the date of grant of the applicable Tranche (the “Expiration Date”). If the service conditions and common stock price milestones, as described above, are not achieved as of the Expiration Date, all SP-PIPRs in such Tranche will be forfeited. The following is a summary of activity relating to all PIPRs during the year ended December 31, 2023:
| Ordinary PIPRs (a) |  | P-PIPRs |  | SP-PIPRs
| Units |  | Weighted Average Grant Date Fair Value |  | Units |  | Weighted Average Grant Date Fair Value |  | Units |  | Weighted Average Grant Date Fair Value
Balance, January 1, 2023 | 1,684,404 |  | $ | 39.96 |  |  | 2,447,224 |  | $ | 40.29 |  |  | – |  | $ | – |
Granted | 1,521,458 |  | $ | 34.50 |  |  | – |  | $ | – |  |  | 2,250,000 |  | $ | 15.06 |
Forfeited | (16,695) |  | $ | 43.23 |  |  | – |  | $ | – |  |  | – |  | $ | – |
Settled | (548,398) |  | $ | 42.89 |  |  | (973,222) |  | $ | 41.76 |  |  | – |  | $ | – |
Performance units earned (b) |  |  |  |  | 484,827 |  | $ | 46.63 |  |  |  |  |
Balance, December 31, 2023 | 2,640,769 |  | $ | 36.19 |  |  | 1,958,829 |  | $ | 41.12 |  |  | 2,250,000 |  | $ | 15.06 |
_____________________ (a)Includes PIPR awards with only service-based vesting conditions. (b)Represents P-PIPRs earned during the fiscal year under the performance conditions of previously-granted P-PIPR awards in excess of the target payout levels of such awards. Fair values shown above represent the weighted average as of grant date. The weighted-average grant date fair value of ordinary PIPRs and SP-PIPRs granted in 2023 was $34.50 and $15.06, respectively. The weighted-average grant date fair value of ordinary PIPRs and P-PIPRs granted in 2022 was $32.95 and $35.44, respectively. The weighted-average grant date fair value of ordinary PIPRs and P-PIPRs granted in 2021 was $43.23 and $46.63, respectively. Compensation expense recognized for ordinary PIPRs and P-PIPRs is determined by multiplying the number of shares of common stock underlying such awards that, based on the Company’s estimate, are considered probable of vesting, by the grant date fair value. Compensation expense recognized for SP-PIPRs is determined by multiplying the number of shares of common stock underlying such awards by the grant date fair value. As of December 31, 2023, the total estimated unrecognized compensation expense of all profits interest participation rights was $57,954 and the Company expects to expense such amount over a weighted-average period of approximately 1.8 years subsequent to December 31, 2023. LFI and Other Similar Deferred Compensation Arrangements In connection with LFI and other similar deferred compensation arrangements, granted to eligible employees, which generally require future service as a condition for vesting, the Company records a prepaid compensation asset and a corresponding compensation liability on the grant date based upon the fair value of the award. The prepaid asset is amortized on a straight-line basis over the applicable requisite service periods (which are generally similar to the comparable periods for RSUs) and is charged to “compensation and benefits” expense within the Company’s consolidated statements of operations. LFI and similar deferred compensation arrangements that do not require future service are expensed immediately. The related compensation liability is accounted for at fair value as a derivative liability, which contemplates the impact of estimated forfeitures, and is adjusted for changes in fair value primarily related to changes in value of the underlying investments. The following is a summary of activity relating to LFI and other similar deferred compensation arrangements during the year ended December 31, 2023:
| Prepaid Compensation Asset |  | Compensation Liability
Balance, January 1, 2023 | $ | 112,124 |  |  | $ | 326,282 |
Granted | 159,981 |  |  | 159,981 |
Settled | – |  |  | (171,738) |
Amortization and the impact of forfeitures | (156,254) |  |  | 8,103 |
Change in fair value of underlying investments | – |  |  | 41,463 |
Other | 121 |  |  | 1,329 |
Balance, December 31, 2023 | $ | 115,972 |  |  | $ | 365,420 |
The amortization of the prepaid compensation asset will generally be recognized over a weighted average period of approximately 0.8 years subsequent to December 31, 2023. The following is a summary of the impact of LFI and other similar deferred compensation arrangements on “compensation and benefits” expense within the accompanying consolidated statements of operations for the years ended December 31, 2023, 2022 and 2021:
| Year Ended December 31,
| 2023 |  | 2022 |  | 2021
Amortization and the impact of forfeitures | $ | 164,357 |  |  | $ | 154,878 |  |  | $ | 151,604 |
Change in the fair value of underlying investments | 41,463 |  |  | (44,261) |  |  | 35,494 |
Total | $ | 205,820 |  |  | $ | 110,617 |  |  | $ | 187,098 |
Incentive Awards Granted in the First Quarter of 2024 In the first quarter of 2024, the Company granted approximately $374,000 of deferred share-based incentive compensation awards to eligible employees as part of the 2023 year-end compensation process. These grants included: RSUs; PIPRs; and LFI and other similar deferred compensation arrangements. The Company also granted approximately $95,000 of cash retention awards that are subject to a required three-year service period subsequent to payment by the Company. If the service requirement is not met, the award is subject to clawback. The cash retention awards will be amortized over the requisite service period beginning on the grant date.

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