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Compensation | 3 Months Ended
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Mar. 31, 2018
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] |
Compensation |
22. | Compensation
The Company’s Compensation Committee may grant various equity-based and partnership awards, including restricted stock units, restricted stock, stock options, limited partnership units and exchange rights for shares of the Company’s Class A common stock upon exchange of limited partnership units. On June 22, 2016, at the Annual Meeting of Stockholders of the Company, the stockholders approved the Seventh Amended and Restated Long Term Incentive Plan (the “Equity Plan”) to increase from 350 million to 400 million the aggregate number of shares of Class A common stock of the Company that may be delivered or cash-settled pursuant to awards granted during the life of the Equity Plan. As of March 31, 2018, the limit on the aggregate number of BGC shares authorized to be delivered allowed for the grant of future awards relating to 184.7 million BGC shares. Upon vesting of RSUs, issuance of restricted stock, exercise of employee stock options and exchange of limited partnership units, the Company generally issues new shares of the Company’s Class A common stock. On June 6, 2017, at the Annual Meeting of Stockholders of the Company, the Company’s stockholders approved the Company’s Second Amended and Restated Incentive Bonus Compensation Plan (the “Incentive Plan”) to approve the material terms of the performance goals under the Incentive Plan for compliance with Section 162(m) of the Internal Revenue Code of 1986, as amended, including an amendment to those performance goals in order to broaden the stock price performance goal to include dividends and/or total stockholder return. In addition, as a result of the Newmark IPO, effective as of December 13, 2017, the Board of Directors of Newmark adopted the Newmark Long Term Incentive Plan, which was approved by Newmark’s sole stockholder, BGC, on December 13, 2017. The Newmark Long Term Incentive Plan authorized the use of 50.0 million aggregate number of shares of Class A Newmark common stock that may be delivered or cash-settled pursuant to awards granted during the life of the Plan. As of March 31, 2018, the limit on the aggregate number of Newmark shares authorized to be delivered allowed for the grant of future awards relating to 50.0 million Newmark shares. Limited Partnership Units A summary of the activity associated with limited partnership units is as follows:
|  | Number of Units |
Balance at December 31, 2017 |  |  | 123,631,195 |
Granted |  |  | 11,343,446 |
Redeemed/exchanged units |  |  | (5,629,072 | )
Forfeited units |  |  | (38,689 | )
Balance at March 31, 2018 |  |  | 129,306,880 |
As of March 31, 2018 and December 31, 2017, the Company had 129.3 million and 123.6 million BGC Holdings limited partnership units outstanding, respectively. In addition, there were 59.8 and 56.2 million limited partnership units in Newmark Holdings outstanding as of March 31, 2018 and December 31, 2017, respectively. The 3.6 million increase in limited partnership units in Newmark Holdings for the three months ended March 31, 2018, is the result of 6.1 million, (2.5 million), and (17.6 thousand) limited partnership units in Newmark Holdings granted, redeemed/exchanged, and forfeited, respectively. As a result of the Newmark IPO and the related Separation and Distribution Agreement, BGC Holdings limited partnership units can only be exchanged into BGC Class A common stock with a number of Newmark Holdings limited partnership units equal to a BGC Holdings limited partnership unit multiplied by the distribution ratio and divided by the exchange ratio. Certain standalone BGC Holdings limited partnership units that do not have corresponding Newmark Holdings limited partnership units, may only become exchangeable into Class A common stock once the Newmark spin-off has occurred (see Note 2—“Limited Partnership Interests in BGC Holdings and Newmark Holdings” for further details on the Separation and Distribution Agreement). During the three months ended March 31, 2018, the Company granted exchangeability on 4.7 million and 2.1 million limited partnership units in BGC Holdings and Newmark Holdings, respectively, and during the three months ended March 31, 2017, the Company granted exchangeability on 5.4 million limited partnership units in BGC Holdings. For the three months ended March 31, 2018 and 2017, the Company incurred non-cash compensation expense of $56.2 million and $53.8 million, respectively, related to the exchangeability granted in each period. This expense is included within “Allocations of net income and grant of exchangeability to limited partnership units and FPUs” in the Company’s unaudited condensed consolidated statements of operations. As of March 31, 2018 and December 31, 2017, the number of share-equivalent limited partnership units exchangeable into shares of BGC Class A common stock at the discretion of the unit holder was 22.9 million and 20.0 million, respectively. The number of share-equivalent limited partnership units exchangeable into shares of BGC Class A common stock as of March 31, 2018 represent 22.9 million and 10.8 million limited partnership units in BGC Holdings and Newmark Holdings, respectively, exchangeable together into 22.9 million shares of BGC Class A common stock. Due to the change in the distribution ratio during Q1 2018 there are 0.9 million standalone BGC Holdings exchangeable limited partnership units as of March 31, 2018. The number of share-equivalent limited partnership units exchangeable into shares of BGC Class A common stock as of December 31, 2017 represented 20.0 million and 9.1 million of limited partnership units in BGC Holdings and Newmark Holdings, respectively, exchangeable together into 20.0 million shares of BGC Class A common stock. As of March 31, 2018, the notional value of the limited partnership units with a post-termination pay-out amount held by executives and non-executive employees, awarded in lieu of cash compensation for salaries, commissions and/or discretionary or guaranteed bonuses, was approximately $148.7 million. The number of outstanding limited partnership units with a post-termination pay-out represent 14.5 million limited partnership units in BGC Holdings and 6.6 million limited partnership units in Newmark Holdings, of which approximately 6.7 million units in BGC Holdings and 3.0 million units in Newmark Holdings were unvested. As of March 31, 2018, the aggregate estimated fair value of these limited partnership units was approximately $35.1 million. In addition, beginning January 1, 2018, the Company began granting standalone limited partnership units in Newmark Holdings to Newmark employees. As of March 31, 2018, the notional value of the limited partnership units with a post-termination pay-out amount held by executives and non-executive employees, awarded in lieu of cash compensation for salaries, commissions and/or discretionary or guaranteed bonuses, was approximately $21.6 million. The number of outstanding limited partnership units with a post-termination pay-out represent 1.5 million limited partnership units in Newmark Holdings, of which approximately 1.1 million units in Newmark Holdings were unvested. As of March 31, 2018, the aggregate estimated fair value of these limited partnership units was approximately $2.1 million. As of December 31, 2017, the notional value of the limited partnership units with a post-termination pay-out amount held by executives and non-executive employees, awarded in lieu of cash compensation for salaries, commissions and/or discretionary or guaranteed bonuses, was approximately $242.1 million. The number of outstanding limited partnership units with a post-termination pay-out as of December 31, 2017 was approximately 24.1 million, of which approximately 13.3 million were unvested. As of December 31, 2017, the number of outstanding limited partnership units with a post-termination pay-out represent 24.1 million and 11.0 million of limited partnership units in BGC Holdings and Newmark Holdings, respectively, of which approximately 13.3 million and 6.0 million units in BGC Holdings and Newmark Holdings, respectively, were unvested. As of December 31, 2017, the aggregate estimated fair value of these limited partnership units was approximately $45.7 million. The liability for limited partnership units with a post-termination payout is included in “Accrued compensation” on the Company’s unaudited condensed consolidated statements of financial condition. Certain of the limited partnership units with a post-termination pay-out have been granted in connection with the Company’s acquisitions. As of March 31, 2018 and December 31, 2017, the aggregate estimated fair value of these acquisition-related limited partnership units was $16.7 million and $20.6 million, respectively. The liability for such acquisition-related limited partnership units is included in “Accounts payable, accrued and other liabilities” on the Company’s unaudited condensed consolidated statements of financial condition. Compensation expense related to limited partnership units with a post-termination pay-out amount or a stated vesting schedule is recognized over the stated service period. These units generally vest between three and five years from the date of grant. The Company recognized compensation expense (benefit) related to these limited partnership units of ($8.7) million and $6.4 million for the three months ended March 31, 2018 and 2017, respectively. These are included in “Compensation and employee benefits” in the Company’s unaudited condensed consolidated statements of operations. Certain limited partnership units generally receive quarterly allocations of net income, which are cash distributed on a quarterly basis and generally contingent upon services being provided by the unit holders. The allocation of income to limited partnership units and FPUs was $9.0 million and $9.4 million for the three months ended March 31, 2018 and 2017, respectively. This expense is included within “Allocations of net income and grant of exchangeability to limited partnership units and FPUs” in the Company’s unaudited condensed consolidated statements of operations. Restricted Stock Units A summary of the activity associated with RSUs is as follows:
|  | Restricted Stock Units |  |  | Weighted- Average Grant Date Fair Value |  |  | Weighted- Average Remaining Contractual Term (Years) |
Balance at December 31, 2017 |  |  | 1,409,747 |  |  | $ | 8.76 |  |  |  | 1.68 |
Granted |  |  | 51,976 |  |  |  | 12.10 |  |  |  |  |
Delivered units |  |  | (413,051 | ) |  |  | 8.44 |  |  |  |  |
Forfeited units |  |  | (29,572 | ) |  |  | 9.65 |  |  |  |  |
Balance at March 31, 2018 |  |  | 1,019,100 |  |  | $ | 9.03 |  |  |  | 1.69 |
The fair value of BGC RSUs awarded to employees and directors is determined on the date of grant based on the market value of BGC Class A common stock (adjusted if appropriate based upon the award’s eligibility to receive dividends), and is recognized, net of the effect of estimated forfeitures, ratably over the vesting period. The Company uses historical data, including historical forfeitures and turnover rates, to estimate expected forfeiture rates for both employee and director BGC RSUs. Each BGC RSU is settled in one share of BGC Class A common stock upon completion of the vesting period. During the three months ended March 31, 2018 and 2017, the Company granted 0.1 million and 0.1 million, respectively, of BGC RSUs with aggregate estimated grant date fair values of approximately $0.6 million and $1.0 million, respectively, to employees and directors. These BGC RSUs were awarded in lieu of cash compensation for salaries, commissions and/or discretionary or guaranteed bonuses. BGC RSUs granted to these individuals generally vest over a two- to four-year period. For BGC RSUs that vested during the three months ended March 31, 2018 and 2017, the Company withheld shares valued at $1.7 million and $2.0 million to pay taxes due at the time of vesting. As of March 31, 2018 and December 31, 2017, the aggregate estimated grant date fair value of outstanding BGC RSUs was approximately $9.2 million and $12.3 million, respectively. Compensation expense related to BGC RSUs was approximately $1.5 million and $1.1 million, respectively, for the three months ended March 31, 2018 and 2017. As of March 31, 2018, there was approximately $9.0 million of total unrecognized compensation expense related to unvested BGC RSUs. Beginning January 1, 2018, the Company began granting Newmark RSUs to Newmark employees. The fair value is determined on the date of grant based on the market value of Newmark Class A common stock in the same fashion as described above, and the awards vest ratably over the 2-3 year vesting period into shares of Newmark Class A common stock. During the three months ended March 31, 2018, the Company granted approximately 40 thousand of Newmark RSUs with aggregate estimated grant date fair values of approximately $0.5 million. As of March 31, 2018, the aggregate estimated grant date fair value of outstanding Newmark RSUs was approximately $0.5 million with a weighted average remaining contractual term of 2.43 years. Restricted Stock The Company has granted restricted shares under its Equity Plan. Such restricted shares are generally saleable by partners in five to ten years. Partners who agree to extend the length of their employment agreements and/or other contractual modifications sought by the Company are expected to be able to sell their restricted shares over a shorter time period. Transferability of the shares of restricted stock is not subject to continued employment or service with the Company or any affiliate or subsidiary of the Company; however, transferability is subject to compliance with BGC Partners’ and its affiliates’ customary noncompete obligations. During the three months ended March 31, 2018 and 2017, no BGC shares were forfeited in connection with this clause. During the three months ended March 31, 2018 and 2017, the Company released the restrictions with respect to approximately 0.5 million and 1.0 million of such BGC shares, respectively. As of March 31, 2018, there were 8.7 million of such restricted BGC shares outstanding. Deferred Compensation The Company maintains a Deferred Cash Award Program for GFI, which provides for the grant of deferred cash incentive compensation to eligible employees. The Company may pay certain bonuses in the form of deferred cash compensation awards, which generally vest over a future service period. In addition, prior to the completion of the tender offer, GFI’s outstanding RSUs were converted into the right to receive an amount in cash equal to $6.10 per unit, with such cash payable on and subject to the terms and conditions of the original vesting schedule of each RSU. The total compensation expense, net of forfeitures, recognized in relation to the deferred cash compensation awards for the three months ended March 31, 2018 and 2017 was $1.3 million and $3.8 million, respectively. As of March 31, 2018, the total liability for the deferred cash compensation awards was $8.2 million, which is included in “Accrued compensation” on the Company’s unaudited condensed consolidated statements of financial condition. Total unrecognized compensation cost related to deferred cash compensation, prior to the consideration of forfeitures, was approximately $5.3 million and is expected to be recognized over a weighted-average period of 1.89 years. The Company also maintains a similar deferred cash award program for Berkeley Point, in which it pays certain bonuses in the form of deferred cash compensation awards, which also generally vest over a future service period. The total compensation expense recognized in relation to Berkeley Point’s deferred cash compensation awards was $1.1 million for the three months ended March 31, 2018 and $0.2 million for the three months ended March 31, 2017. As of March 31, 2018 and December 31, 2017, the total liability for the deferred cash compensation awards was $0.6 million and $0.4 million, respectively, which is included in “Accrued compensation” on the Company’s consolidated statements of financial condition. In December 2017, the Company incurred an expense totaling $40.3 million in relation to deferred BGC and Newmark Class A common stock that the Chief Executive Officer and Chief Financial Officer are authorized to issue, as approved by the Board of Directors. During the three months ended March 31, 2018, the Company issued 1.0 million BGC Class A common stock and 0.3 million Newmark Class A common stock.

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- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -URI http://asc.fasb.org/subtopic&trid=2208855 + Details
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