Long-term Incentive Compensation Plans

12 Months Ended

Dec. 31, 2021

We maintain an unfunded, non-qualified incentive compensation program known as the AllianceBernstein Incentive Compensation Award Program (“Incentive Compensation Program”), under which annual awards may be granted to eligible employees. See Note 2, "Summary of Significant Accounting Policies – Long-Term Incentive Compensation Plans" for a discussion of the award provisions.

Under the Incentive Compensation Program, we made awards in 2021, 2020 and 2019 aggregating $184.1 million, $177.4 million and $175.5 million, respectively. The amounts charged to employee compensation and benefits for the years ended December 31, 2021, 2020 and 2019 were $173.4 million, $176.8 million and $177.2 million, respectively.

Effective as of September 30, 2017, we established the AB 2017 Long Term Incentive Plan (“2017 Plan”), which was adopted at a special meeting of AB Holding Unitholders held on September 29, 2017. The following forms of awards may be granted to employees and Eligible Directors under the 2017 Plan: (i) restricted AB Holding Units or phantom restricted AB Holding Units (a “phantom” award is a contractual right to receive AB Holding Units at a later date or upon a specified event); (ii) options to buy AB Holding Units; and (iii) other AB Holding Unit-based awards (including, without limitation, AB Holding Unit appreciation rights and performance awards). The purpose of the 2017 Plan is to promote the interest of AB by: (i) attracting and retaining talented officers, employees and directors, (ii) motivating such officers, employees and directors by means of performance-related incentives to achieve longer-range business and operational goals, (iii) enabling such officers, employees and directors to participate in the long-term growth and financial success of AB, and (iv) aligning the interests of such officers, employees and directors with those of AB Holding Unitholders. The 2017 Plan will expire on September 30, 2027, and no awards under the 2017 Plan will be made after that date. Under the 2017 Plan, the aggregate number of AB Holding Units with respect to which awards may be granted is 60 million, including no more than 30 million newly-issued AB Holding Units.

As of December 31, 2021, no options to buy AB Holding Units had been granted and 28,109,084 AB Holding Units, net of withholding tax requirements, were subject to other AB Holding Unit awards made under the 2017 Plan or the AllianceBernstein 2010 Long Term Incentive Plan, as amended, an equity compensation plan with similar terms that was canceled on September 30, 2017. AB Holding Unit-based awards (including options) in respect of 31,890,916 AB Holding Units were available for grant under the 2017 Plan as of December 31, 2021.

As of December 31, 2020, no options to buy AB Holding Units had been granted and 24,444,406 AB Holding Units, net of withholding tax requirements, were subject to other AB Holding Unit awards made under the 2017 Plan or the AllianceBernstein 2010 Long Term Incentive Plan, as amended, an equity compensation plan with similar terms that was canceled on September 30, 2017. AB Holding Unit-based awards (including options) in respect of 35,555,594 AB Holding Units were available for grant under the 2017 Plan as of December 31, 2020.

Option Awards

We did not grant any options to buy AB Holding Units during 2021, 2020 or 2019. Historically, options granted to employees generally were exercisable at a rate of 20% of the AB Holding Units subject to such options on each of the first five anniversary dates of the date of grant; options granted to Eligible Directors generally were exercisable at a rate of 33.3% of the AB Holding Units subject to such options on each of the first three anniversary dates of the date of grant.

The option-related activity in our equity compensation plans during 2021 is as follows:


	Options to Buy AB Holding Units		Weighted Average Exercise Price Per Option			Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value (in thousands)
Outstanding as of December 31, 2020		148,985		$	23.61		1.2
Granted		—		—
Exercised		(143,211)		23.75
Forfeited		—		—
Expired		—		—
Outstanding as of December 31, 2021		5,774		$	20.12		0.33		$	165.8
Exercisable as of December 31, 2021		5,774		$	20.12		0.33		$	165.8
Vested or expected to vest as of December 31, 2021		5,774		$	20.12		0.33		$	165.8

The total intrinsic value of options exercised during 2021, 2020 and 2019 was $2.2 million, $32,368 and $3.7 million, respectively.

Under the fair value method, compensation expense is measured at the grant date based on the estimated fair value of the options awarded (determined using the Black-Scholes option valuation model) and is recognized over the requisite service period. We recorded no compensation expense related to option grants in 2021, 2020 or 2019 as no options were granted. As of December 31, 2021, there was no compensation expense related to unvested option grants not yet recognized in the consolidated statement of income.

Restricted AB Holding Unit Awards

In 2021, 2020 and 2019, the Board granted restricted AB Holding Unit awards to Eligible Directors. These AB Holding Units give the Eligible Directors, in most instances, all the rights of other AB Holding Unitholders, subject to such restrictions on transfer as the Board may impose.

We award restricted AB Holding Units that vest ratably over three or four years. We fully expensed these awards on each grant date, as there is no service requirement. Grant details related to these awards is as follows:


	2021			2020			2019
Restricted Units Awarded		35,358			50,232			45,420
Weighted Average Grant Date Fair Value		$	44.29		$	23.69		$	29.33
Compensation Expense (in millions)		$	1.6		$	1.2		$	1.3

On April 28, 2017, Seth P. Bernstein was appointed President and Chief Executive Officer ("CEO") pursuant to an employment agreement, effective May 1, 2017. In connection with the commencement of his employment, Mr. Bernstein was granted restricted AB Holding Units with a grant date fair value of $3.5 million (164,706 AB Holding Units based on the $21.25 grant date AB Holding Unit price on May 16, 2017) and a four-year service requirement. Mr. Bernstein's restricted AB Holding Units vested ratably on each of the first four anniversaries of his commencement date and were delivered to Mr. Bernstein on or about May 1, 2021. These AB Holding Units were subject to accelerated vesting clauses in his employment agreement. Compensation expense related to Mr. Bernstein's restricted AB Holding Unit grant was $0.3 million for the year ended December 31, 2021 and $0.9 million for each of the years ended December 31, 2020 and 2019, respectively. Mr. Bernstein's award granted in connection with his appointment as CEO was fully amortized as of December 31, 2021.

Under the Incentive Compensation Program, we awarded 3.5 million restricted AB Holding Units in 2021 (which included 3.3 million restricted AB Holding Units in December for the 2021 year-end awards as well as 0.2 million additional restricted AB Holding Units granted earlier during the year relating to the 2020 year-end awards), with grant date fair values per restricted AB Holding Unit ranging between $32.10 to $50.94.

We awarded 5.3 million restricted AB Holding Units in 2020 (which included 5.0 million restricted AB Holding Units in December for the 2020 year-end awards as well as 0.3 million additional restricted AB Holding Units granted earlier during the year relating to the 2019 year-end awards), with grant date fair values per restricted AB Holding Unit ranging between $28.75 to $32.10.

We awarded 5.8 million restricted AB Holding Units in 2019 (which included 5.4 million restricted AB Holding Units in December for the 2019 year-end awards as well as 0.4 million additional restricted AB Holding Units granted earlier during the year related to the 2018 year-end awards), with grant date fair values per restricted AB Holding Unit ranging between $26.69 to $30.01.

Restricted AB Holding Units awarded under the Incentive Compensation Program in 2020 and years prior generally vested in 25% increments on December 1st of each of the four years immediately following the year in which the award was granted. Awards granted in 2021 and subsequent years generally will vest in 33.3% increments on December 1st of each of the three years immediately following the year in which the award is granted.

We also award restricted AB Holding Units in connection with certain employment and separation agreements, as well as relocation-related performance awards, with vesting schedules ranging between two and five years. Grant details related to these awards is as follows:


	2021			2020			2019
	(in millions excluding share prices)
Restricted Units Awarded		3.4			0.4			1.9
Grant Date Fair Value Range		$29.06 - $53.86			$18.80 - $35.42			$27.32 - $30.85
Compensation Expense		$	40.9		$	32.1		$	36.7

The fair value of the restricted AB Holding Units is amortized over the requisite service period as compensation expense. Changes in unvested restricted AB Holding Units during 2021 are as follows:


	AB Holding Units	Weighted Average Grant Date Fair Value per AB Holding Unit
Unvested as of December 31, 2020	18,864,574		$	28.58
Granted	6,984,456		39.68
Vested	(7,108,465)		27.99
Forfeited	(609,825)		28.99
Unvested as of December 31, 2021	18,130,740		$	33.98

The total grant date fair value of restricted AB Holding Units that vested was $199.0 million, $155.0 million and $201.4 million during 2021, 2020 and 2019, respectively. As of December 31, 2021, the 18,130,740 unvested restricted AB Holding Units consist of 11,548,053 restricted AB Holding Units that do not have a service requirement and have been fully expensed on the grant date and 6,582,687 restricted AB Holding Units that have a service requirement and will be expensed over the required service period. As of December 31, 2021, there was $137.2 million of compensation expense related to unvested restricted AB Holding Unit awards granted and not yet recognized in the consolidated statement of income. We expect to recognize the expense over a weighted average period of 6.2 years.