Total compensation and benefits consists of the following:


	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2023		2022		2023		2022
Salaries, incentive compensation and benefits (1)	$	116,326	$	115,463	$	231,876	$	242,658

Long-term cash incentive compensation expense	6,360		1,963		13,344		4,612
Restricted share-based award compensation expense	7,747		9,968		16,725		20,056
Long-term incentive compensation expense	14,107		11,931		30,069		24,668

Total compensation and benefits	$	130,433	$	127,394	$	261,945	$	267,326

(1) Excluding long-term incentive compensation expense

Cash incentive compensation paid to members of Artisan’s investment teams and members of its distribution team 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 it was earned with the exception of fourth quarter incentive compensation which is earned and paid in the fourth quarter of the year. Cash incentive compensation paid to most other employees is 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.

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 related to unvested shares will be reversed .

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 PSUs. The fair value of each award is equal to the market price of the Company's common stock on the grant date, except for PSUs 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. 6,400,000 shares of Class A common stock were reserved and available for issuance under the Artisan Partners Asset Management Inc. 2023 Omnibus Incentive Compensation Plan (the "Plan") as of June 30, 2023, which includes 3,945,902 shares registered in the three months ended June 30, 2023.

The following tables summarize the restricted share-based award activity for the six months ended June 30, 2023:


	Weighted-Average Grant Date Fair Value		Restricted Stock Awards and Restricted Stock Units
Unvested at January 1, 2023	$	39.09	5,396,343
Granted	34.99		517,386
Forfeited	43.40		(17,916)
Vested	37.55		(542,487)
Unvested at June 30, 2023	$	38.84	5,353,326


	Weighted-Average Grant Date Fair Value		Performance Share Units
Unvested at January 1, 2023	$	58.13	231,170
Granted	—		—
Forfeited	—		—
Vested (1)	34.97		(15,000)
Unvested at June 30, 2023	$	54.89	216,170
(1) During the six months ended June 30, 2023, the 60,000 PSUs granted in 2020 met the requisite three-year performance conditions, resulting in the potential vesting of 150% of the PSUs, or 90,000 shares of Class A common stock. 45,000 shares of Class A common stock were promptly delivered at that time, while the remaining 45,000 PSUs remain subject to the qualified retirement vesting condition.

Based on the quarter-end status of the market and performance conditions, the 216,170 unvested PSUs would ultimately result in the issuance of 216,173 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, 2023 was $75.1 million with a weighted average recognition period of 3.4 years remaining. The unrecognized compensation expense for the unvested PSUs as of June 30, 2023 was $4.9 million with a weighted average recognition period of 2.1 years remaining.

During the six months ended June 30, 2023, the Company withheld a total of 187,287 restricted shares and paid a total of $6.8 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, 2023, Artisan granted $39.0 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 to which the awards are allocated. 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 generally 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	2023		2022		2023		2022
Operating expenses (benefit)	Compensation and benefits	$	714	$	(1,941)	$	2,446	$	(2,648)
Non-operating income (expense)	Other net investment gain (loss)	3,563		(12,244)		10,581		(15,205)

The franchise capital award liability was $19.0 million and $14.5 million as of June 30, 2023 and December 31, 2022, respectively, and is included in accrued incentive compensation in the unaudited consolidated statements of financial condition. The unrecognized compensation expense for the unvested franchise capital awards as of June 30, 2023 was $89.6 million with a weighted average recognition period of 4.1 years remaining.