Compensation and benefits expense to employees and members is comprised of the following:


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2022		2021		2022		2021
	(in thousands)
Cash Compensation and Other Benefits	$	15,260	$	14,946	$	47,109	$	45,365
Non-Cash Compensation		3,370		3,975		11,133		11,726
Total Compensation and Benefits Expense	$	18,630	$	18,921	$	58,242	$	57,091

All non-cash compensation awards granted have varying vesting schedules and are issued at prices equal to the assessed fair market value at the time of issuance, as discussed below. Details of non-cash compensation awards granted during the nine months ended September 30, 2022 and 2021 are as follows:


	For the Nine Months Ended September 30,
	2022				2021
	Amount		Fair Value1		Amount		Fair Value1
Class B-1 Units2		2,376,376	$	3.49		1,456,753	$	2.41

Represents the weighted average grant date estimated fair value per share, unit, or option.

Represents Class B-1 units issued under the 2007 Equity Incentive Plan (as defined below). These Class B-1 units are entitled to receive dividends for the duration of the holder’s employment, and upon the end of employment are exchanged for shares of Class A common stock in an amount based upon the appreciation in price of the Class A common stock from the date of grant to the date of exchange. Of the units issued during the nine months ended September 30, 2022, 2,317,782 units vest on the fifth anniversary of the grant date and 58,594 units vest ratably over four years. Of the units issued during the nine months ended September 30, 2021, 1,400,305 units vest on the fifth anniversary of the grant date, 38,462 units vest ratably over four years, and 17,986 units vested immediately.

As part of the Company's year-end bonus structure, certain employee members may elect to have all or part of year-end cash compensation paid in the form of cash, or equity issued pursuant to Pzena Investment Management, LLC Amended and Restated 2006 Equity Incentive Plan (“the 2006 Equity Incentive Plan”). For the year ended December 31, 2021, $6.8 million of cash compensation was elected to be paid in the form of equity, which was issued and vested immediately on January 1, 2022. Details of these awards issued on January 1, 2022 are as follows:


	January 1,
	2022
	Amount		Fair Value1
Delayed Exchange Class B Units2		1,084,675	$	6.16
Restricted Shares of Class A Common Stock3		17,057	$	6.16

Represents the weighted average grant date estimated fair value per share or unit as of December 31, 2021.

Represents Class B units issued under the 2006 Equity Incentive Plan. These units vest immediately upon grant, but may not be exchanged pursuant to the Amended and Restated Operating Agreement of the operating company until the seventh anniversary of the date of grant. These units are also not entitled to any benefits under the Tax Receivable Agreement between the Company and members of the operating company.

Represents shares of Class A common stock issued under the 2007 Equity Incentive Plan. These shares vest immediately upon grant, but are restricted and may not be sold until the seventh anniversary of the date of grant.

Pursuant to the 2006 Equity Incentive Plan, the operating company issues Class B units, phantom Class B units and options to purchase Class B units. The operating company also issues Delayed Exchange Class B units pursuant to the 2006 Equity Incentive Plan. These Delayed Exchange Class B units vest immediately upon grant, but may not be exchanged pursuant to the Amended and Restated Operating Agreement of the operating company until at least the seventh anniversary of the date of grant. These Delayed Exchange Class B units are also not entitled to any benefit under the Tax Receivable Agreement between the Company and members of the operating company. The operating company also issues phantom Delayed Exchange Class B units and options to purchase Delayed Exchange Class B units. Under the Pzena Investment Management, Inc. 2007 Equity Incentive Plan (“the 2007 Equity Incentive Plan”), the Company issues shares of restricted Class A common stock, Class B-1 units, options to purchase Class A common stock, options to purchase restricted Class A shares of common stock and contingently vesting options to acquire shares of Class A common stock. During the three and nine months ended September 30, 2022, no contingently vesting options vested. During the three months ended September 30, 2021, no contingently vesting options vested. During the nine months ended September 30, 2021, 250,000 contingently vesting options vested. During the three and nine months ended September 30, 2022, 1,000,000 contingently vesting options expired. During the three months ended September 30, 2022, there were no Delayed Exchange Class B units issued to certain employee members. During the three months ended September 30, 2021, 4,897 Delayed Exchange Class B units were issued to certain employee members for less than $0.1 million in cash. During the nine months ended September 30, 2022 and 2021, 381,201 and 38,876 Delayed Exchange Class B units were issued to certain employee members, respectively, for approximately $1.7 million and $0.1 million in cash, respectively. During the three and nine months ended September 30, 2022 and 2021, there were no options exercised.

Under the Pzena Investment Management, LLC Amended and Restated Bonus Plan (the “Bonus Plan”), eligible employees whose compensation is in excess of certain thresholds are required to defer a portion of that excess. These deferred amounts may be invested, at the employee’s discretion, in certain investment options designated by the Compensation Committee of the Company's Board of Directors. Amounts deferred in any calendar year reduce that year’s compensation expense and are amortized and vest ratably over a four-year period commencing the following year. The Company also issued to certain of its employees deferred compensation with certain investment options that also vest ratably over a four-year period. During the nine months ended September 30, 2022 and 2021, no forfeitures occurred. As of September 30, 2022 and December 31, 2021, the liability associated with all employee deferred compensation investment accounts was $4.9 million and $6.8 million, respectively.

Pursuant to the Pzena Investment Management, Inc. Non-Employee Director Deferred Compensation Plan (the “Director Plan”), non-employee directors may elect to have all or part of their compensation otherwise payable in cash or Class A common stock, deferred in the form of phantom shares of Class A common stock of the Company issued under the 2007 Equity Incentive Plan. Elections to defer compensation under the Director Plan are made on a year-to-year basis. Distributions under the Director Plan are made in a single distribution of shares of Class A common stock at such time as elected by the participant when the deferral was made. Since inception of the Director Plan in 2009, the majority of the Company’s directors have elected to defer 100% of their compensation in the form of phantom shares of Class A common stock. Director compensation amounts for any calendar year are amortized over the calendar year and reflected as General and Administrative Expense. As of September 30, 2022 and December 31, 2021, there were 650,760 and 597,412 phantom shares of Class A common stock outstanding, respectively. During the three months ended September 30, 2022 and 2021, the Company distributed no shares of Class A common stock pursuant to the Director Plan on such date specified by the participant as elected when the deferral was made. During the nine months ended September 30, 2022 and 2021, the Company distributed 28,640 and 11,070 shares of Class A common stock, respectively, pursuant to the Director Plan on such date specified by the participant as elected when the deferral was made. During the nine months ended September 30, 2022 and 2021, the Company issued 5,015 and 5,074 restricted shares of Class A common stock, respectively, associated with non-deferred nonemployee director compensation. These restricted shares will vest quarterly over the calendar year.

As of September 30, 2022 and December 31, 2021, the Company had approximately $34.7 million and $42.1 million, respectively, in unrecorded compensation expense related to unvested awards issued pursuant to its Bonus Plan and certain agreements; phantom Class A shares, Class B units, option grants, phantom Delayed Exchange Class B units, and phantom Class B units issued under the 2006 Equity Incentive Plan; and restricted Class A common stock issued under the 2007 Equity Incentive Plan. The Company anticipates that this unrecorded cost will amortize over the respective vesting periods of the awards.