Stockholders' Equity

9 Months Ended

Sep. 30, 2021

Stockholders' Equity [Abstract]

Stockholders' Equity

8. Stockholders’ Equity

Shares outstanding were 27.1 million and 27.5 million on September 30, 2021 and December 31, 2020, respectively.

Voting Rights

The holders of Class A Stock and Class B Stock have identical rights except that (i) holders of Class A Stock are entitled to one vote per share, while holders of Class B Stock are entitled to ten votes per share, on all matters to be voted on by shareholders in general, and (ii) holders of Class A Stock are not eligible to vote on matters relating exclusively to Class B Stock and vice versa.

Authorized shares

On June 5, 2020, shareholders approved the amendment to the Company’s Amended and Restated Certificate of Incorporation to decrease the total number of authorized shares of Class B Stock from 100,000,000 shares to 25,000,000 shares.

Stock Award and Incentive Plan

The Company maintains a stock award and incentive plan approved by the shareholders (the “Plan”), which is designed to provide incentives which will attract and retain individuals key to the success of GBL through direct or indirect ownership of our common stock. A maximum of 7.5 million shares of Class A Stock have been reserved for issuance under the Plan by a committee of GBL’s board of directors (the “Board of Directors”) responsible for administering the Plan (“Compensation Committee”). Benefits under the Plan may be granted in any one or a combination of stock options, stock appreciation rights, restricted stock, restricted stock units, stock awards, phantom stock awards, dividend equivalents, and other stock or cash based awards. Under the Plan, the Compensation Committee may grant RSAs, each of which entitles the grantee to one share of Class A Stock subject to restrictions, phantom RSAs, each of which entitles the grantee to the cash value of one share of Class A Stock subject to restrictions, and either incentive or nonqualified stock options, with a term not to exceed ten years from the grant date and at an exercise price that the Compensation Committee may determine, which were recommended by the Company’s Chairman who did not receive any awards.

On March 5, 2020, 392,700 RSAs were issued at a grant price of $14.31 per RSA. On June 15, 2021, 396,800 phantom RSAs were issued at a grant price of $25.02 per phantom RSA and have similar vesting terms to the RSAs. The phantom RSAs, which will be settled in cash based on the fair value of the shares on the vesting date, were determined to be liability awards and are adjusted for changes in the Company’s stock price at each reporting date.

As of September 30, 2021 and December 31, 2020, there were 909,215 and 1,079,650, respectively, RSAs outstanding with weighted average grant prices per RSA of $18.79 and $19.45, respectively, and 10,000 stock options outstanding with an exercise price of $25.55. As of September 30, 2021, there were 393,300 phantom RSAs outstanding with weighted average grant prices per phantom RSA of $25.02.

For the three months ended September 30, 2021 and 2020, the Company recognized stock-based non-cash RSA compensation expense of $0.9 million and $1.0 million, respectively. For the nine months ended September 30, 2021 and 2020, the Company recognized stock-based non-cash RSA compensation expense of $3.0 million and $3.1 million, respectively. For the three and nine months ended September 30, 2021, the Company recognized stock-based Phantom RSA compensation expense of $0.6 million and $0.7 million, respectively. As of September 30, 2021, the accrued Phantom RSA compensation payable was $0.7 million and was included within compensation payable in the Condensed Consolidated Statements of Financial Condition.

The total compensation costs related to non-vested RSA and Phantom RSA awards to teammates, excluding the CEO who received none, not yet recognized was approximately $8.0 million and $8.4 million, respectively, as of September 30, 2021.

On January 2, 2020, the Deferred Cash Compensation Agreement (“DCCA”) with the CEO covering compensation from 2016 vested in accordance with the terms of the agreement and a cash payment in the amount of $43.7 million was made to the CEO. This payment was reduced by $32.3 million resulting from the DCCA being indexed to the GBL stock price and utilizing the lesser of the VWAP on the vesting date ($18.8812) versus the VWAP over 2016 ($32.8187).

Stock Repurchase Program

In March 1999, the Board of Directors established a stock repurchase program (the “Stock Repurchase Program”) to grant management the authority to repurchase shares of Class A Stock. On March 18, 2020, the Board of Directors authorized an increase to purchase $30 million of its outstanding Class A Stock, which resulted in a modification in the form of the authorization from previously being stated in shares to being stated in dollars. On August 4, 2020, the Board of Directors authorized a share repurchase of 3,000,000 shares of its outstanding Class A Stock, which replaced any outstanding share repurchase authorizations.

For the three months ended September 30, 2021 and 2020, the Company repurchased 92,427 and 133,383 shares, respectively, at an average price per share of $26.65 and $12.26, respectively. For the nine months ended September 30, 2021 and 2020, the Company repurchased 347,389 and 254,180 shares, respectively, at an average price per share of $22.44 and $13.19, respectively. At September 30, 2021, the total shares available under the Stock Repurchase Program to be repurchased in the future were 2,527,270. The Stock Repurchase Program is not subject to an expiration date.

On March 11, 2020, GAMCO commenced an offer to purchase up to $30 million in aggregate purchase price of its Class A Stock, pursuant to which holders of shares were invited to tender some or all of their shares at a price within the range of $15.00 to $17.00 per share, which would have enabled GAMCO to purchase for cash up to 2,000,000 shares of its Class A common stock (such offer, the “Offer”). The Offer which was due to expire on April 8, 2020, was terminated on March 18, 2020 as a result of the suspension of trading and market index conditions of the Offer not having been satisfied. As a result of this termination, no shares were purchased in the Offer and all shares previously tendered and not withdrawn were promptly returned to tendering holders.

Dividends

During the three months ended September 30, 2021 and 2020, the Company declared cash dividends of $0.02 per share to shareholders of Class A Stock and Class B Stock. During the nine months ended September 30, 2021 and 2020, the Company declared cash dividends of $0.06 per share to shareholders of Class A Stock and Class B Stock. During the nine months ended September 30, 2021, the Company declared a special dividend of $2.00 per share to shareholders of Class A Stock and Class B Stock payable in Subordinated Notes.

Shelf Registration

In April 2018, the SEC declared effective the Company’s “shelf” registration statement on Form S-3 giving the Company the flexibility to sell any combination of senior and subordinated debt securities, convertible debt securities, and equity securities (including common and preferred stock) and other securities up to a total amount of $500 million. The shelf expired in April 2021. On July 21, 2021, the Company filed a new “shelf” registration statement on Form S-3 on similar terms, which was declared effective on July 27, 2021.