EQUITY COMPENSATION

3 Months Ended

Mar. 31, 2022

Share-based Payment Arrangement [Abstract]

EQUITY COMPENSATION

13. EQUITY COMPENSATION

Equity Incentive Plan

Equity-based compensation is granted under the Company's 2014 Equity Incentive Plan (as amended, the “Equity Incentive Plan”). The total number of shares available to be issued under the Equity Incentive Plan resets based on a formula defined in the Equity Incentive Plan and may increase on January 1 of each year. On January 1, 2022, the total number of shares available for issuance under the Equity Incentive Plan reset to 49,293,000 shares and as of March 31, 2022, 44,627,032 shares remained available for issuance.

Generally, unvested restricted units are forfeited upon termination of employment in accordance with the Equity Incentive Plan. The Company recognizes forfeitures as a reversal of previously recognized compensation expense in the period the forfeiture occurs.

Equity-based compensation expense, net of forfeitures, recorded by the Company is presented in the following table:

	Three months ended March 31,
	2022		2021
Restricted units	$	53,650	$	44,087
Restricted units with a market condition	—		11,562
Equity-based compensation expense	$	53,650	$	55,649

Restricted Units

Each restricted unit represents an unfunded, unsecured right of the holder to receive a share of the Company's Class A common stock on a specific date. The restricted units generally vest and are settled in shares of Class A common stock either (i) at a rate of one-third per year, beginning on the third anniversary of the grant date, (ii) at a rate of one quarter per year, beginning on the second anniversary of the grant date or the holder's employment commencement date, or (iii) at a rate of one third per year, beginning on the first anniversary of the grant date in each case generally subject to the holder’s continued employment as of the applicable vesting date (subject to accelerated vesting upon certain qualifying terminations of employment or retirement eligibility provisions). Compensation expense associated with restricted units is recognized on a straight-line basis over the requisite service period of the award.

Restricted units are delivered net of the holder's payroll related taxes upon vesting. For the three months ended March 31, 2022, 5.1 million restricted units vested and 2.8 million shares of Class A common stock were delivered to the holders. For the three months ended March 31, 2021, 4.2 million restricted units vested and 2.4 million shares of Class A common stock were delivered to the holders.

The holders of restricted units, other than awards that have not yet been issued as described in the subsequent sections, generally have the right to receive as current compensation an amount in cash equal to (i) the amount of any dividend paid with respect to a share of Class A common stock multiplied by (ii) the number of restricted units held at the time such dividends are declared (“Dividend Equivalent”). During the three months ended March 31, 2022, the Company declared dividends of $0.61 per share to Class A common stockholders at the close of business on March 17, 2022. For the three months ended March 31, 2022, Dividend Equivalents were made to the holders of restricted units in the aggregate amount of $8.0 million, which are presented as dividends within the Condensed Consolidated Statements of Changes in Equity. When units are forfeited, the cumulative amount of Dividend Equivalents previously paid is reclassified to compensation and benefits expense in the Condensed Consolidated Statements of Operations.

During the first quarter of 2022, the Company approved the future grant of restricted units to certain senior executives in each of 2023, 2024 and 2025, subject to the holder’s continued employment and acceleration in certain instances. The vesting period of these awards are at a rate of 25% per year, beginning on the second anniversary of the grant date. Given that these future restricted units have been communicated to the recipient, the Company accounts for these awards as if they have been granted and recognizes the compensation expense on a straight-line basis over the service period. The restricted units that have been approved and communicated but not yet granted are not eligible to receive a Dividend Equivalent until the grant date.

The following table presents unvested restricted units' activity:

	Restricted Units	Weighted Average Grant Date Fair Value Per Unit
Balance - January 1, 2022	18,323,036	$	36.43
Granted	3,789,737	74.77
Vested	(4,996,756)	26.07
Forfeited	(63,769)	50.90
Balance - March 31, 2022	17,052,248	$	47.94

The total compensation expense expected to be recognized in all future periods associated with the restricted units is approximately $680.4 million as of March 31, 2022 and is expected to be recognized over the remaining weighted average period of 4.1 years.

Options

Each option entitles the holders to purchase from the Company, upon exercise thereof, one share of Class A common stock at the stated exercise price. The term of the options is generally ten years, beginning on the grant date.

A summary of options activity during the three months ended March 31, 2022 is presented below:

	Options	Weighted Average Exercise Price		Weighted Average Remaining Life (in years)	Aggregate Intrinsic Value
Balance - January 1, 2022	6,306,282	$	19.00	2.3	$	392,692
Exercised	(176,154)	19.00		—	—
Balance - March 31, 2022	6,130,128	$	19.00	2.1	$	381,478
Exercisable at March 31, 2022	6,130,128	$	19.00	2.1	$	381,478

Net cash proceeds from exercises of stock options were $3.3 million for the three months ended March 31, 2022. The Company realized tax benefits of approximately $1.4 million from those exercises.