18.

Compensation

The Company’s Compensation Committee may grant various equity-based awards, including restricted stock units, restricted stock, stock options and exchange rights for shares of the Company’s Class A common stock upon exchange of limited partnership units and FPUs. A maximum of 200 million shares of the Company’s Class A common stock are authorized to be delivered or cash settled pursuant to awards granted. As of December 31, 2013, the limit on the aggregate number of shares authorized to be delivered allowed for the grant of future awards relating to 61.7 million shares. Upon vesting of RSUs, issuance of restricted stock or exercise of employee stock options, the Company generally issues new shares of the Company’s Class A common stock.

Limited Partnership Units

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


	Number of Units
Balance at December 31, 2010		40,851,365
Granted		21,244,357
Redeemed/exchanged units		(11,165,346	)
Forfeited units		(5,116,022	)

Balance at December 31, 2011		45,814,354
Granted		41,691,703
Redeemed/exchanged units		(17,478,541	)
Forfeited units		(1,547,419	)

Balance at December 31, 2012		68,480,097
Granted		49,577,157
Redeemed/exchanged units		(88,181,354	)
Forfeited units		—

Balance at December 31, 2013		29,875,900

During the years ended December 31, 2013, 2012 and 2011, the Company granted exchangeability on 9.8 million, 24.3 million and 14.2 million limited partnership units for which the Company incurred compensation expense, before associated income taxes, of $57.0 million, $127.1 million and $108.3 million, respectively. See Note 4—“Summary of Significant Accounting Policies” for more information on the Company’s accounting policy with respect to granting exchangeability on limited partnership units. In addition, during the year ended December 31, 2013, the Company redeemed or exchanged approximately 76 million limited partnership units in connection with its Global Partnership Restructuring Program and incurred compensation expense, before associated income taxes, of $304.1 million (see Note 1—“Organization and Basis of Presentation”).

As of December 31, 2013, 2012 and 2011, the number of limited partnership units exchangeable into shares of Class A common stock at the discretion of the unit holder was 1.9 million, 6.4 million and 1.8 million, respectively.

As of December 31, 2013, 2012 and 2011, 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 $35.1 million, $64.5 million and $37.6 million, respectively. As of December 31, 2013 and 2012, the aggregate estimated fair value of these limited partnership units was $5.5 million and $12.3 million, respectively. The number of unvested limited partnership units as of December 31, 2013, 2012 and 2011, was 4.1 million, 6.6 million and 2.6 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 grant. The Company recognized compensation expense, before associated income taxes, related to limited partnership units that were not redeemed of $4.6 million, $6.3 million and $7.8 million for the years ended December 31, 2013, 2012 and 2011, respectively.

The 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 $62.6 million, $13.0 million and $18.4 million for the years ended December 31, 2013, 2012 and 2011, 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, 2010		4,271,429		$	4.13		0.87
Granted		1,368,671			8.02
Delivered units		(2,397,662	)		3.84
Forfeited units		(520,618	)		6.15

Balance at December 31, 2011		2,721,820		$	5.96		1.76
Granted		1,729,894			5.24
Delivered units		(1,625,014	)		5.24
Forfeited units		(217,969	)		5.74

Balance at December 31, 2012		2,608,731		$	5.94		1.83
Granted		1,543,183			3.18
Delivered units		(1,038,937	)		6.09
Forfeited units		(288,375	)		4.56

Balance at December 31, 2013		2,824,602		$	4.51		1.79

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 years ended December 31, 2013, 2012 and 2011, the Company granted 1.5 million, 1.7 million and 1.4 million, respectively, of RSUs with aggregate estimated grant date fair values of approximately $4.9 million, $9.1 million and $11.0 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 years ended December 31, 2013, 2012 and 2011, the Company withheld shares valued at $1.2 million, $2.3 million and $3.6 million, respectively, to pay taxes due at the time of vesting.

As of December 31, 2013 and 2012, the aggregate estimated grant date fair value of outstanding RSUs was approximately $12.7 million and $15.5 million, respectively.

Compensation expense related to RSUs, before associated income taxes, was approximately $5.8 million, $7.8 million and $9.0 million for the years ended December 31, 2013, 2012 and 2011, respectively. As of December 31, 2013, there was approximately $9.7 million of total unrecognized compensation expense related to unvested RSUs.

Restricted Stock

At the end of the second quarter of 2013 pursuant to the Global Partnership Restructuring Program, the Company granted approximately 44 million shares of the Company’s Class A common stock, of which approximately 41 million were restricted shares. 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. Because the restricted stock was not subject to continued employment or service, the grant-date fair value of the restricted stock was expensed on the date of grant.

The restricted shares are generally saleable by partners in five to ten years. Partners who agree to extend the lengths 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. During the year ended December 31, 2013, the Company released the restrictions with respect to approximately 5.9 million of such shares.

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, 2010		10,379,540		$	12.34		3.3	$	6,626,196
Granted		—			—
Exercised options		(2,047,249	)		5.10
Forfeited options		(76,225	)		19.50

Balance at December 31, 2011		8,256,066		$	14.07		2.9	$	—
Granted		—			—
Exercised options		—			—
Forfeited options		(1,805,135	)		13.92

Balance at December 31, 2012		6,450,931		$	14.11		2.4	$	—
Granted		—			—
Exercised options		—			—
Forfeited options		(1,959,693	)		20.23

Balance at December 31, 2013		4,491,238		$	11.60		2.0	$	—

Options exercisable at December 31, 2013		4,491,238		$	11.60		2.0	$	—

The Company did not grant any stock options during the years ended December 31, 2013, 2012 and 2011. There were no options exercised during 2013 or 2012. During the year ended December 31, 2011, the aggregate intrinsic value of options exercised was $7.3 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. There was no cash received from options exercised during 2013 or 2012. Cash received from options exercised during 2011 was $7.7 million.

The Company did not record any compensation expense related to stock options for the years ended December 31, 2013, 2012 or 2011, as all of these options had vested in prior years. As of December 31, 2013, the compensation expense related to stock options was fully recognized.

The following table provides further details relating to the Company’s stock options outstanding at December 31, 2013:


	Options Outstanding						Options Exercisable
Range of Exercise Prices	Number Outstanding		Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Life (Years)		Number Exercisable		Weighted-Average Exercise Price
$6.91—$8.73		298,500	$	8.23		2.5		298,500	$	8.23
$8.74—$15.40		3,684,238		11.06		2.2		3,684,238		11.06
$15.41—$23.10		507,500		17.45		0.3		507,500		17.45
$23.11—$24.14		1,000		24.09		0.1		1,000		24.09

Total		4,491,238	$	11.60		2.0		4,491,238	$	11.60