Compensation

9 Months Ended

Sep. 30, 2012

Compensation [Abstract]

Compensation

17. Compensation

Limited Partnership Units

A summary of the activity associated with limited partnership units is as follows:

	Number of Units
Balance at December 31, 2011		45,814,354
Granted		31,646,404
Redeemed/Exchanged units		(12,052,194	)
Forfeited units		(806,662	)
Balance at September 30, 2012		64,601,902

Certain limited partnership units are granted exchangeability into Class A common stock on a one-for-one basis (subject to adjustment). Upon grant of exchangeability, the limited partnership units are cancelled, and the partner is granted a partnership unit that is exchangeable for shares of the Company’s Class A common stock. At the time exchangeability is granted, the Company recognizes an expense based on the fair value of the award on that date which is included in “Compensation and employee benefits” in the Company’s unaudited condensed consolidated statements of operations. During the three months ended September 30, 2012 and 2011, the Company granted exchangeability on 4.4 million and 7.2 million limited partnership units for which the Company incurred compensation expense, before associated income taxes, of $24.0 million and $50.4 million, respectively. During the nine months ended September 30, 2012 and 2011, the Company granted exchangeability on 14.5 million and 10.9 million limited partnership units for which the Company incurred compensation expense, before associated income taxes, of $88.1 million and $84.4 million, respectively.

The number of unvested limited partnership units as of September 30, 2012 and December 31, 2011 was 5.1 million and 2.6 million, respectively.

As of September 30, 2012 and December 31, 2011, the number of limited partnership units exchangeable into shares of Class A common stock at the discretion of the unit holder was 5.6 million and 1.8 million, respectively.

Compensation expense related to limited partnership units with a post-termination pay-out amount is recognized over the stated service period. These units generally vest between three and five years from the date of the grant. The Company recognized a pre-tax compensation expense of $1.4 million and $3.4 million for the three months ended September 30, 2012 and 2011, respectively, related to limited partnership units that were not redeemed. The Company recognized a pre-tax compensation expense of $2.8 million and $6.7 million for the nine months ended September 30, 2012 and 2011, respectively, related to limited partnership units that were not redeemed. As of September 30, 2012 and December 31, 2011, the notional value of the applicable limited partnership units was $49.9 million and $37.6 million, respectively. As of September 30, 2012 and December 31, 2011, the aggregate estimated fair value of the limited partnership units held by executives and non-executive employees, awarded in lieu of cash compensation for salaries, commissions and/or discretionary or guaranteed bonuses, was $14.3 million and $16.5 million, respectively.

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, 2011		2,721,820		$	5.96		1.76
Granted		1,498,396			5.48
Delivered units		(1,381,639	)		4.93
Forfeited units		(197,218	)		5.64
Balance at September 30, 2012		2,641,359		$	6.25		1.95

The fair value of RSUs awarded to employees and directors is determined on the date of grant based on the market value of 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 RSUs. Each RSU is settled in one share of Class A common stock upon completion of the vesting period.

During the nine months ended September 30, 2012 and 2011, the Company granted 1.5 million and 1.2 million, respectively, of RSUs with aggregate estimated grant date fair values of approximately $8.2 million and $10.3 million, respectively, to employees and directors. These RSUs were awarded in lieu of cash compensation for salaries, commissions and/or discretionary or guaranteed bonuses. RSUs granted to these individuals generally vest over a two to four-year period.

For RSUs that vested during the nine months ended September 30, 2012, the Company withheld shares valued at $2.3 million to pay payroll taxes due at the time of vesting.

As of September 30, 2012 and December 31, 2011, the aggregate estimated grant date fair value of outstanding RSUs was approximately $16.5 million and $16.2 million, respectively.

Compensation expense related to RSUs, before associated income taxes, was approximately $2.1 million and $2.7 million for the three months ended September 30, 2012 and 2011, respectively. Compensation expense related to RSUs, before associated income taxes, was approximately $6.1 million and $6.9 million for the nine months ended September 30, 2012 and 2011, respectively. As of September 30, 2012, there was approximately $13.1 million of total unrecognized compensation expense related to unvested RSUs.

Stock Options

A summary of the activity associated with stock options is as follows:

	Options			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value
Balance at December 31, 2011		8,256,066		$	14.07		2.9	$	—
Forfeited options		(148,197	)		9.18
Balance at September 30, 2012		8,107,869		$	14.16		2.2	$	—
Options exercisable at September 30, 2012		8,107,869		$	14.16		2.2	$	—

The Company did not grant any stock options during the nine months ended September 30, 2012 and 2011. During the nine months ended September 30, 2012, there were no exercises of options. During the nine months ended September 30, 2011, the aggregate intrinsic value of options exercised was $0.1 million, determined as of the date of option exercise. The exercise prices for these options equaled the closing price of the Company’s Class A common stock on the date of grant of each option. Cash received from option exercises during the nine months ended September 30, 2011 was $7.7 million.

The Company did not record any compensation expense related to stock options for the three or nine months ended September 30, 2012 or 2011, as all of these options vested in prior years. As of September 30, 2012, there was no unrecognized compensation expense related to unvested stock options.