Compensation and Benefits

6 Months Ended

Jun. 30, 2012

Compensation and Benefits [Abstract]

Compensation and Benefits

Note 6-Compensation and Benefits

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

	For the Three				For the Six
	Months Ended June 30,				Months Ended June 30,
	2012		2011		2012		2011
	(in thousands)
Cash Compensation and Other Benefits	$	7,347	$	7,080	$	14,834	$	14,285
Non-Cash Compensation		665		1,180		1,351		2,363
Total Compensation and Benefits Expense	$	8,012	$	8,260	$	16,185	$	16,648

For the three and six months ended June 30, 2012 and 2011, the operating company granted no options to purchase units in the operating company pursuant to the Pzena Investment Management, LLC 2006 Equity Incentive Plan (the "2006 Equity Incentive Plan") and no options to purchase shares of Class A common stock pursuant to the Pzena Investment Management, Inc. 2007 Equity Incentive Plan (the "2007 Equity Incentive Plan").

For the six months ended June 30, 2012 and 2011, the operating company granted 53,116 and 6,000, respectively, restricted operating company Class B units, and the related shares of Class B common stock, pursuant to the 2006 Equity Incentive Plan.  No such units were granted for the three months ended June 30, 2012 and 2011.  These unit grants each vest ratably over a four-year period commencing January 1, 2012 and 2011, respectively.

For the three months ended June 30, 2012 and 2011, the Company recognized approximately $0.3 million and $0.7 million, respectively, in compensation and benefits expense associated with the amortization of all unvested operating company Class B unit and option grants issued under the 2006 Equity Incentive Plan, and unvested Class A common stock option grants issued under the 2007 Equity Incentive Plan.  For the six months ended June 30, 2012 and 2011, the Company recognized approximately $0.6 million and $1.4 million, respectively, in such compensation and benefits expense.

Pursuant to the Pzena Investment Management, LLC Amended and Restated Bonus Plan (the "Bonus Plan"), eligible employees whose cash compensation is in excess of certain thresholds have a portion of that excess mandatorily deferred.  Amounts deferred may be credited to an investment account, take the form of phantom Class B units, or be invested in money market funds at the employee's discretion, and vest ratably over four years.  As of June 30, 2012 and December 31, 2011, the liability associated with deferred compensation investment accounts was approximately $0.6 million and $1.2 million, respectively, which is recorded in the deferred compensation liability on the consolidated statements of financial condition.  For the three months ended June 30, 2012 and 2011, the Company recognized approximately $0.4 million, and $0.5 million, respectively, in compensation and benefits expense associated with the amortization of all unvested deferred compensation awards associated with the Bonus Plan.  For the six months ended June 30, 2012 and 2011, the Company recognized approximately $0.8 million and $1.0 million, respectively, in such expense.

As of June 30, 2012 and December 31, 2011, the Company had approximately $2.0 million and $2.1 million, respectively, in unrecorded compensation expense related to unvested operating company phantom Class B units issued pursuant to its deferred compensation plan, operating company Class B unit and option grants issued under the 2006 Equity Incentive Plan, and Class A common stock option grants issued under the 2007 Equity Incentive Plan.

The Company issues to certain of its employees delayed-vesting cash awards.  For the three and six months ended June 30, 2012 and 2011, no such awards were granted.  Delayed-vesting cash awards have varying vesting schedules, with $0.8 million to be paid at the end of 2012, and the remaining $0.4 million to be paid at the end of 2013.