Total compensation and benefits consists of the following:


	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2022		2021		2022		2021
Salaries, incentive compensation and benefits (1)	$	115,463	$	125,911	$	242,658	$	254,275

Long-term cash incentive compensation expense	1,963		1,921		4,612		3,135
Restricted share-based award compensation expense	9,968		10,181		20,056		20,068
Long-term incentive compensation expense	11,931		12,102		24,668		23,203

Total compensation and benefits	$	127,394	$	138,013	$	267,326	$	277,478

(1) Excluding long-term incentive compensation expense

Cash incentive compensation paid to members of Artisan’s investment teams and members of its distribution teams is generally based on formulas that are tied directly to revenues. The majority of this incentive compensation is earned on a quarterly basis and paid in the quarter following the quarter in which the incentive was earned with the exception of fourth quarter incentives earned which are also paid in the fourth quarter of the year. Cash incentive compensation paid to most other employees is discretionary and subjectively determined based on individual performance and Artisan’s overall results during the applicable year and is generally paid on an annual basis.

Long-term incentive compensation awards consist of both APAM restricted share-based awards and long-term cash awards, which are referred to as franchise capital awards. These awards are described in more detail below.

Artisan has registered 14,000,000 shares of Class A common stock for issuance under the 2013 Omnibus Incentive Compensation Plan (the “Plan”). Pursuant to the Plan, APAM has granted a combination of restricted stock awards, restricted stock units, and performance share units (collectively referred to as “restricted share-based awards” or "awards") of Class A common stock to employees.

Franchise Shares. Like career shares, franchise shares are generally subject to both (i) a pro rata five-year service vesting condition and (ii) a qualifying retirement condition. In addition, franchise shares, which are only granted to investment team members, are subject to a Franchise Protection Clause, which provides that the number of shares that ultimately vest depends on whether certain conditions relating to client cash flows are met. If such conditions are not met, compensation cost will be reversed for any shares that do not vest.

Performance Share Units (PSUs). PSUs are generally subject to (i) a three-year service vesting condition, (ii) certain performance conditions related to the Company's adjusted operating margin and total shareholder return compared to a peer group during a three-year performance period, and (iii) for one-half of the PSUs eligible to vest at the end of the performance period, a qualifying retirement condition. The number of shares of Class A common stock that are ultimately issued in connection with each PSU award will depend upon the outcome of the performance, market and qualified retirement conditions. For the portion of a PSU award with a "performance condition" under ASC 718, expense is recognized over the service period if it is probable that the performance condition will be achieved.

Compensation expense is recognized based on the estimated grant date fair value on a straight-line basis over the requisite service period of the award. The initial requisite service period is generally five years for restricted stock awards and restricted stock units, and three years for performance share units. The fair value of each award is equal to the market price of the Company's common stock on the grant date, except for performance share units with a "market condition" performance metric under ASC 718, which have a grant-date fair value based on a Monte Carlo valuation model.

Unvested restricted share-based awards are subject to forfeiture. Grantees are generally entitled to dividends or dividend equivalents on unvested and vested awards. 2,957,575 shares of Class A common stock were reserved and available for issuance under the Plan as of June 30, 2022.

During the six months ended June 30, 2022, Artisan granted 787,372 restricted stock awards, 1,331 restricted stock units, and 95,940 performance share units of Class A common stock to employees of the Company. Total compensation expense associated with the 2022 grant is expected to be approximately $38.0 million.

The following tables summarize the restricted share-based award activity for the six months ended June 30, 2022:


	Weighted-Average Grant Date Fair Value		Restricted Stock Awards and Restricted Stock Units
Unvested at January 1, 2022	$	38.18	5,245,394
Granted	41.86		788,703
Forfeited	39.29		(8,664)
Vested	34.91		(580,550)
Unvested at June 30, 2022	$	39.06	5,444,883

Based on the quarter-end status of the market and performance conditions, the 231,170 unvested performance share units would ultimately result in the issuance of 309,143 shares of Class A common stock if all other vesting conditions were met.

The unrecognized compensation expense for the unvested restricted stock awards and restricted stock units as of June 30, 2022 was $91.0 million with a weighted average recognition period of 3.6 years remaining. The unrecognized compensation expense for the unvested performance share units as of June 30, 2022 was $8.5 million with a weighted average recognition period of 2.8 years remaining.

During the six months ended June 30, 2022, the Company withheld a total of 185,243 restricted shares and paid a total of $7.4 million as a result of net share settlements to satisfy employee tax withholding obligations. These net share settlements had the effect of shares repurchased and retired by the Company, as they reduced the number of shares outstanding.

During the six months ended June 30, 2022, Artisan granted $48.6 million of franchise capital awards to investment team members in lieu of certain additional restricted share-based awards. The franchise capital awards are subject to the same long-term vesting and forfeiture provisions as restricted share-based awards. Prior to vesting, franchise capital awards are generally allocated to one or more of the investment strategies managed by the award recipient's investment team. During the vesting period, the value of the awards will increase or decrease based on the investment returns of the strategies in which the awards are invested. Compensation expense, including the appreciation or depreciation related to investment returns, is recognized on a straight-line basis over the required service period, which is generally five years. Because the awards will be paid out in cash upon vesting, the fair value of unvested awards is recorded as a liability based on the percentage of the service requirement that has been completed.

The company hedges its economic exposure to the change in value of these awards due to market movements by investing the cash reserved for the awards in the underlying investments. The franchise capital award liability and the underlying investment holdings are marked to market each quarter. The change in value of the award liability is recognized as a compensation expense on a straight-line basis over the required service period. The change in value of the underlying investment holdings is recognized in non-operating income (expense) in the period of change. While there is a timing difference between the recognition of the compensation expense and the offsetting investment gain or loss, the compensation expense and investment income will net to zero at the end of the multi-year vesting period for all awards that ultimately vest.


		For the Three Months Ended June 30,				For the Six Months Ended June 30,
Statement of Operations Section	Statement of Operations Line Item	2022		2021		2022		2021
Operating expenses	Compensation and benefits	$	(1,941)	$	213	$	(2,648)	$	210
Non-operating income (expense)	Other net investment gain (loss)	(12,244)		(2,578)		(15,205)		(2,473)