XML 34 R23.htm IDEA: XBRL DOCUMENT
v3.24.2

INCENTIVE PLANS | 6 Months Ended
--- | ---
Jun. 30, 2024
Share-Based Payment Arrangement [Abstract] |
INCENTIVE PLANS | INCENTIVE PLANS Share-Based Incentive Plan Awards Total shares available for issuance under incentive compensation plans are primarily from the 2018 Plan, which became effective on April 24, 2018 and was amended on May 9, 2024 to increase the aggregate number of shares authorized for issuance by 20,000,000 shares. The aggregate number of shares authorized for issuance under the 2018 Plan is 70,000,000. Such shares may be issued pursuant to the grant or exercise of stock options; stock appreciation rights; restricted stock units, restricted stock awards, and deferred stock units (collectively “RSUs”); performance-based restricted stock units (“PRSUs”); profits interest participation rights (“PIPRs”); and other share-based awards. Expense The following reflects the expense with respect to share-based incentive plans, which is primarily recorded within “compensation and benefits” expense in the Company’s accompanying condensed consolidated statements of operations for the three month and six month periods ended June 30, 2024 and 2023:
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2024 |  | 2023 |  | 2024 |  | 2023
Share-based incentive awards: |  |  |  |  |  |  |
RSUs | $ | 67,419 |  |  | $ | 61,972 |  |  | $ | 128,539 |  |  | $ | 112,655 |
PRSUs | 314 |  |  | 562 |  |  | 719 |  |  | 1,351 |
PIPRs | 21,614 |  |  | 18,200 |  |  | 30,287 |  |  | 37,262 |
Total | $ | 89,347 |  |  | $ | 80,734 |  |  | $ | 159,545 |  |  | $ | 151,268 |
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 and PRSUs RSUs generally require future service as a condition for vesting (unless the recipient is then eligible for retirement under the Company’s retirement policy or is a non-executive member of the Board of Directors) 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 during the applicable vesting period, which is payable in additional units. During the six month period ended June 30, 2024, dividend participation rights required the issuance of an aggregate 443,272 units of RSUs and the associated aggregate charge to “retained earnings” (with a corresponding credit to “additional paid-in-capital”) was $16,263. In connection with RSUs and PRSUs that settled during the six month period ended June 30, 2024, the Company satisfied its minimum statutory tax withholding requirements in lieu of delivering 1,561,290 and 29,690 shares, respectively, of common stock during such six month period. Accordingly, 2,169,708 and 33,479 shares, respectively, of common stock held by the Company were delivered during the six month period ended June 30, 2024. PRSUs are a type of RSU that is incrementally subject to performance-based and service-based vesting conditions and 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, Inc.’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. The following is a summary of activity relating to RSUs and PRSUs during the six month period ended June 30, 2024:
| RSUs |  | PRSUs
| Units |  | Weighted Average Grant Date Fair Value |  | Units |  | Weighted Average Grant Date Fair Value
Balance, January 1, 2024 | 12,633,027 |  | $ | 36.16 |  |  | 125,465 |  | $ | 41.07 |
Granted (including 443,272 RSUs relating to dividend participation) | 8,351,633 |  | $ | 38.70 |  |  | – |  | $ | – |
Forfeited | (718,942) |  | $ | 36.22 |  |  | – |  | $ | – |
Settled | (3,730,998) |  | $ | 38.64 |  |  | (63,169) |  | $ | 46.63 |
Balance, June 30, 2024 | 16,534,720 |  | $ | 36.88 |  |  | 62,296 |  | $ | 35.44 |
The weighted-average grant date fair value of RSUs granted in the six month period ended June 30, 2023 was $36.78. As of June 30, 2024, the total estimated unrecognized compensation expense related to RSUs and PRSUs was $292,538 and $390, respectively. The Company expects to expense such amounts over weighted-average periods of approximately 1.0 and 0.2 years, respectively, subsequent to June 30, 2024. 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 condensed 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. 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 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 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 common stock price has appreciated 50% above the Grant Date Stock Price; •40% if, during the seven years following the date of grant, the 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 six month period ended June 30, 2024:
| 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, 2024 | 2,640,769 |  | $ | 36.19 |  |  | 1,958,829 |  | $ | 41.12 |  |  | 2,250,000 |  | $ | 15.06 |
Granted | 1,368,964 |  | $ | 38.26 |  |  | – |  | $ | – |  |  | – |  | $ | – |
Forfeited | (61,878) |  | $ | 35.85 |  |  | – |  | $ | – |  |  | – |  | $ | – |
Settled | (601,433) |  | $ | 43.23 |  |  | (995,169) |  | $ | 46.63 |  |  | – |  | $ | – |
Balance, June 30, 2024 | 3,346,422 |  | $ | 35.78 |  |  | 963,660 |  | $ | 35.44 |  |  | 2,250,000 |  | $ | 15.06 |
__________________________ (a)Includes PIPR awards with only service-based vesting conditions. Fair values shown above represent the weighted average as of grant date. The weighted-average grant date fair value of ordinary PIPRs granted in the six month periods ended June 30, 2023 was $35.94. 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 June 30, 2024, the total estimated unrecognized compensation expense of all profits interest participation rights was $76,635 and the Company expects to expense such amount over a weighted-average period of approximately 1.4 years subsequent to June 30, 2024. 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 condensed 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 six month period ended June 30, 2024:
| Prepaid Compensation Asset |  | Compensation Liability
Balance, January 1, 2024 | $ | 115,972 |  |  | $ | 365,420 |
Granted | 40,227 |  |  | 40,227 |
Settled | – |  |  | (137,682) |
Amortization and the impact of forfeitures | (62,348) |  |  | (4,243) |
Change in fair value of underlying investments | – |  |  | 8,172 |
Other | (77) |  |  | (1,677) |
Balance, June 30, 2024 | $ | 93,774 |  |  | $ | 270,217 |
The amortization of the prepaid compensation asset will generally be recognized over a weighted average period of approximately 0.8 years subsequent to June 30, 2024. The following is a summary of the impact of LFI and other similar deferred compensation arrangements on “compensation and benefits” expense within the accompanying condensed consolidated statements of operations for the three month and six month periods ended June 30, 2024 and 2023:
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2024 |  | 2023 |  | 2024 |  | 2023
Amortization and the impact of forfeitures | $ | 22,406 |  |  | $ | 57,558 |  |  | $ | 58,105 |  |  | $ | 92,086 |
Change in the fair value of underlying investments | (1,201) |  |  | 9,675 |  |  | 8,172 |  |  | 26,128 |
Total | $ | 21,205 |  |  | $ | 67,233 |  |  | $ | 66,277 |  |  | $ | 118,214 |
Cash Retention Awards In the first half of 2024, the Company granted and paid approximately $94,000 of cash retention awards that are subject to repayment in full in connection with a termination of employment for cause or resignation without good reason on or prior to the three-year service period. In connection with these awards, the Company recorded a prepaid compensation asset on the grant date based upon the amount paid. The prepaid compensation asset is amortized over the requisite service period beginning on the grant date and is charged to “compensation and benefits” expense in the condensed consolidated statements of operations. Amortization expense for the six months ended June 30, 2024 was approximately $32,000. The remaining prepaid compensation asset was approximately $61,000 as of June 30, 2024.

X
- Definition The entire disclosure for share-based payment arrangement. + References Reference 1: http://www.xbrl.org/2003/role/exampleRef -Topic 718 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a)(1) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480429/718-10-50-2 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 718 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/718/tableOfContent Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 718 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480429/718-10-50-2 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 718 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (h)(2) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480429/718-10-50-2 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 718 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (h)(2)(i) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480429/718-10-50-2 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 718 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (l) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480429/718-10-50-2 + Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsSharebasedPaymentsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration