17.	Compensation

The Company’s Compensation Committee may grant various equity-based and partnership awards, including restricted stock units, restricted stock, stock options, limited partnership units and exchange rights for shares of the Company’s Class A common stock upon exchange of limited partnership units. On June 22, 2016, at the Annual Meeting of Stockholders of the Company, the stockholders approved the Seventh Amended and Restated Long Term Incentive Plan (the “Equity Plan”) to increase from 350 million to 400 million the aggregate number of shares of Class A common stock of the Company that may be delivered or cash-settled pursuant to awards granted during the life of the Equity Plan. As of March 31, 2017, the limit on the aggregate number of shares authorized to be delivered allowed for the grant of future awards relating to 205.8 million shares. Upon vesting of RSUs, issuance of restricted stock, exercise of employee stock options and exchange of limited partnership units, 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, 2016		104,564,656
Granted		11,543,244
Redeemed/exchanged units		(4,347,250	)
Forfeited units		(479,668	)
Balance at March 31, 2017		111,280,982

During the three months ended March 31, 2017 and 2016, the Company granted exchangeability on 5.4 million and 3.2 million limited partnership units for which the Company incurred non-cash compensation expense of $53.8 million and $27.8 million, respectively. This expense is included within “Allocations of net income and grant of exchangeability to limited partnership units and FPUs” in the Company’s unaudited condensed consolidated statements of operations.

As of March 31, 2017 and December 31, 2016, the number of limited partnership units exchangeable into shares of Class A common stock at the discretion of the unit holder was 14.0 million and 13.9 million, respectively.

As of March 31, 2017 and December 31, 2016, 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 approximately $174.4 million and $155.6 million, respectively. As of March 31, 2017 and December 31, 2016, the aggregate estimated fair value of these limited partnership units was approximately $31.7 million and $26.2 million, respectively. The number of outstanding limited partnership units with a post-termination pay-out as of March 31, 2017 and December 31, 2016 was approximately 18.9 million and 17.0 million, respectively, of which approximately 11.8 million and 11.2 million were unvested. The liability for limited partnership units with a post-termination payout is included in “Accrued compensation” on the Company’s unaudited condensed consolidated statements of financial condition.

Certain of the limited partnership units with a post-termination pay-out have been granted in connection with the Company’s acquisitions. As of March 31, 2017 and December 31, 2016, the aggregate estimated fair value of these acquisition-related limited partnership units was $21.6 million and $20.3 million, respectively. The liability for such acquisition-related limited partnership units is included in “Accounts payable, accrued and other liabilities” on the Company’s unaudited condensed consolidated statements of financial condition.

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 related to these limited partnership units of $6.4 million and $2.1 million for the three months ended March 31, 2017 and 2016, respectively. These are included in “Compensation and employee benefits” in the Company’s unaudited condensed consolidated statements of operations.

Certain 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 $9.4 million and $5.1 million for the three months ended March 31, 2017 and 2016, respectively. This expense is included within “Allocations of net income and grant of exchangeability to limited partnership units and FPUs” in the Company’s unaudited condensed consolidated statements of operations.

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, 2016		1,547,402		$	6.86		1.63
Granted		106,765			9.10
Delivered units		(537,547	)		6.63
Forfeited units		(43,101	)		7.47
Balance at March 31, 2017		1,073,519		$	7.18		1.83

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 three months ended March 31, 2017, the Company granted 0.1 million of RSUs with aggregate estimated grant date fair values of approximately $1.0 million 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. During the three months ended March 31, 2016, the Company did not grant any RSUs to employees and directors.

For RSUs that vested during the three months ended March 31, 2017 and 2016, the Company withheld shares valued at $2.0 million and $30 thousand to pay taxes due at the time of vesting.

As of March 31, 2017 and December 31, 2016, the aggregate estimated grant date fair value of outstanding RSUs was approximately $7.7 million and $10.6 million, respectively.

Compensation expense related to RSUs was approximately $1.1 million and $1.6 million, respectively, for the three months ended March 31, 2017 and 2016. As of March 31, 2017, there was approximately $8.5 million of total unrecognized compensation expense related to unvested RSUs.

Restricted Stock

The Company has granted restricted shares under its Equity Plan. Such restricted shares are generally saleable by partners in five to ten years. Partners who agree to extend the length 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. 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. During the three months ended March 31, 2017 no shares were forfeited in connections with this clause. During the three months ended March 31, 2016, approximately 3.7 thousand shares were forfeited in connection with this clause. During the three months ended March 31, 2017 and 2016, the Company released the restrictions with respect to approximately 1.0 million and 1.6 million of such shares, respectively. As of March 31, 2017, there were 10.9 million of such restricted shares outstanding.

Deferred Cash Compensation

As part of the acquisition of GFI, the Company now maintains a Deferred Cash Award Program which was adopted by GFI on February 12, 2013, and provides for the grant of deferred cash incentive compensation to eligible employees. The Company may pay certain bonuses in the form of deferred cash compensation awards, which generally vest over a future service period. In addition, prior to the completion of the tender offer, GFI’s outstanding RSUs were converted into the right to receive an amount in cash equal to $6.10 per unit, with such cash payable on and subject to the terms and conditions of the original vesting schedule of each RSU. The total compensation expense recognized in relation to the deferred cash compensation awards for the three months ended March 31, 2017 and 2016 was $3.8 million and $5.9 million, respectively. As of March 31, 2017, the total liability for the deferred cash compensation awards was $11.7 million, which is included in “Accrued compensation” on the Company’s unaudited condensed consolidated statements of financial condition. Total unrecognized compensation cost related to deferred cash compensation, prior to the consideration of forfeitures, was approximately $13.2 million and is expected to be recognized over a weighted-average period of 1.2 years.

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, 2016		1,007,085	$	10.82		1.0	$	—
Granted		—		—
Exercised options		—		—
Forfeited options		—		—
Balance at March 31, 2017		1,007,085	$	10.82		0.7	$	548,006
Options exercisable at March 31, 2017		1,007,085	$	10.82		0.7	$	548,006

There were no stock options exercised during the three months ended March 31, 2017 and 250 thousand stock options exercised during the three months ended March 31, 2016, respectively. The Company did not grant any stock options during the three months ended March 31, 2017 and 2016.

The Company did not record any compensation expense related to stock options for the three months ended March 31, 2017 or 2016, as all of these options had vested in prior years. As of March 31, 2017, all of the compensation expense related to stock options was fully recognized.