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,
	2019		2018		2019		2018
	(in thousands)
Cash Compensation and Other Benefits	$	13,166	$	13,739	$	40,744	$	40,309
Non-Cash Compensation		2,846		2,383		8,476		7,211
Total Compensation and Benefits Expense	$	16,012	$	16,122	$	49,220	$	47,520

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, 2019 and 2018 are as follows:

	For the Nine Months Ended September 30,
	2019				2018
	Amount		Fair Value¹		Amount		Fair Value¹
Restricted Class B Units		44,470	$	7.87		9,372	$	10.67
Options to Purchase Delayed Exchange Class B Units²		314,960	$	1.27		1,380,128	$	1.95

1	Represents the grant date fair value per share, unit, or option.

Represents options to purchase Delayed Exchange Class B units issued under 2006 Equity Incentive Plan (as defined below). These options become exercisable five years from the date of grant. Upon exercise, the resulting Delayed Exchange Class B units may not be exchanged pursuant the Amended and Restated Operating Agreement until the seventh anniversary of the exercise date and are not entitled to any benefits under the Tax Receivable Agreement.

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, 2018, $4.1 million of cash compensation was elected to be paid in the form of equity, which was issued and vested immediately on January 1, 2019. Details of awards associated with these elections issued on January 1, 2019 are as follows:

	January 1,
	2019
	Amount		Fair Value¹
Phantom Delayed Exchange Class B Units²		1,301,936	$	3.61
Options to Purchase Delayed Exchange Class B Units³		94,488	$	1.27
Delayed Exchange Class B Units⁴		585,682	$	5.97

1	Represents the grant date fair value per share or unit.

Represents phantom Delayed Exchange Class B units issued under the 2006 Equity Incentive Plan. These phantom units vest ratably over ten years and are not entitled to receive dividends or dividend equivalents until vested. Upon vesting, the resulting Delayed Exchange Class B units may not be exchanged pursuant the Amended and Restated Operating Agreement until the seventh anniversary of the vesting date and are not entitled to any benefits under the Tax Receivable Agreement between the Company and members of the operating company.

Represents options to purchase Delayed Exchange Class B units issued under 2006 Equity Incentive Plan. These options are exercisable on the date of grant. Upon exercise, the resulting Delayed Exchange Class B units may not be exchanged pursuant the Amended and Restated Operating Agreement until the seventh anniversary of the exercise date and are not entitled to any benefits under the Tax Receivable Agreement between the Company and members of the operating company.

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.

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, options to purchase Class A common stock, and contingently vesting options to acquire shares of Class A common stock. During each of the three and nine months ended September 30, 2019 and 2018, no contingently vesting options vested. During the three months ended September 30, 2019 and 2018, 5,501 and 479 Delayed Exchange Class B units were issued to certain employee members, respectively, for approximately less than $0.1 million in cash for each period. During the nine months ended September 30, 2019 and 2018, 16,137 and 897,515 Delayed Exchange Class B units were issued to certain employee members, respectively, for approximately $0.1 million and $5.2 million in cash, respectively. During the three and nine months ended September 30, 2019, the 483,000 options exercised resulted in 28,770 net Class B units issued, as a result of the redemption of 129,230 Class B units for the cashless exercise of options, and 59,875 net Class A shares issued, as a result of the redemption of 265,125 Class A shares for the cashless exercise of options. During the three and nine months ended September 30, 2018, 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. As of September 30, 2019 and December 31, 2018, the liability associated with all deferred compensation investment accounts was $3.6 million and $1.8 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, 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 Company’s directors have elected to defer 100% of their compensation in the form of phantom shares of Class A common stock. Amounts deferred in any calendar year are amortized over the calendar year and reflected as General and Administrative Expense. As of September 30, 2019 and December 31, 2018, there were 453,385 and 387,516 phantom shares of Class A common stock outstanding, respectively. For the three and nine months ended September 30, 2019 and 2018, no distributions were made under the Director Plan.

As of September 30, 2019 and December 31, 2018, the Company had approximately $36.9 million and $39.5 million, respectively, in unrecorded compensation expense related to unvested awards issued pursuant to its Bonus Plan and certain agreements; Class B units, option grants, Delayed Exchange Class B units, phantom Delayed Exchange Class B units, and phantom Class B units issued under the 2006 Equity Incentive Plan; and restricted Class A common stock and contingently vesting option grants issued under the 2007 Equity Incentive Plan. The Company anticipates that this unrecorded cost will amortize over the respective vesting periods of the awards.