ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
6531 |
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(State or other Jurisdiction of Incorporation or Organization) |
(Primary Standard Industrial Classification Code Number) |
(I.R.S. Employer Identification Number) |
Title of Each Class |
Trading Symbol(s) |
Name of Each Exchange on Which Registered | ||
☒ | Accelerated filer | ☐ | ||||
Non-accelerated filer | ☐ | Smaller reporting company | ||||
Emerging growth company |
Class |
Outstanding at April 25, 2022 | |
Class A Common Stock, par value $0.01 per share |
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Class B Common Stock, par value $0.01 per share |
Auditor Name: |
Auditor Location: |
PCAOB ID Number: |
Page |
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3 | ||||||
PART III | 4 | |||||
ITEM 10. |
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE | 4 | ||||
ITEM 11. |
EXECUTIVE COMPENSATION | 20 | ||||
ITEM 12. |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS | 52 | ||||
ITEM 13. |
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE | 57 | ||||
ITEM 14. |
PRINCIPAL ACCOUNTANT FEES AND SERVICES | 77 | ||||
77 | ||||||
ITEM 15. |
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES | 77 |
ITEM 10. |
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE |
Name |
Age |
Director Since |
Biographies | |||
Howard W. Lutnick | 60 | 2017 | Mr. Lutnick has served as our Chairman since 2016. As Chairman, Mr. Lutnick serves as the Chairman of our Board of Directors and as our principal executive officer. Mr. Lutnick is the Chairman of the Board of Directors and Chief Executive Officer of BGC Partners, Inc., a leading global brokerage and financial technology company (“BGC Partners” or “BGC”), positions in which he has served since 1999. Mr. Lutnick joined Cantor Fitzgerald, L.P. (“Cantor”) in 1983 and has served as Chairman and Chief Executive Officer of Cantor since 1996. Mr. Lutnick also served as President of Cantor from 1991 until 2017. In addition, Mr. Lutnick also holds offices at and provides services to various other affiliates of Cantor and provides services to our and BGC’s operating partnerships and subsidiaries, including BGC Partners, L.P. (“BGC U.S. OpCo”), BGC Global Holdings, L.P. (“BGC Global OpCo”), and Newmark Partners, L.P. (“Newmark OpCo”). Mr. Lutnick is also the Chief Executive Officer, President, sole shareholder and a director of CF Group Management, Inc. (“CFGM”), the managing general partner of Cantor. Mr. Lutnick has also been a director of Satellogic, Inc. (“Satellogic”) since January 2022. Mr. Lutnick is a member of the Board of Directors of the Horace Mann School, the Board of Directors of the National September 11 th Memorial & Museum, the Board of Directors of the Partnership for New York City and the Board of Overseers of The Hoover Institution. In addition, Mr. Lutnick also served as the Chairman and Chief Executive Officer of CF Finance Acquisition Corp, a special purpose acquisition company (“SPAC”) from October 2015 until consummation of its business combination with GCM Grosvenor, Inc. (“GCM Grosvenor”), in November 2020, as the Chairman and Chief Executive Officer of CF Finance Acquisition Corp. II, a SPAC, from September 2019 until consummation of its business combination with View, Inc. in March 2021, as the Chairman and Chief Executive Officer of CF Finance Acquisition Corp. III from March 2016 until consummation of its business combination with AEye, Inc., in August 2021, and as the Chairman and Chief Executive Officer of CF Acquisition Corp. V from April 2020 until consummation of its business combination with Satellogic in January 2022. Currently, Mr. Lutnick has served as the Chairman and Chief Executive Officer of CF Acquisition Corp. IV since January 2020, CF Acquisition Corp. VI since April 2020, CF Acquisition Corp. VII since July 2020 and CF Acquisition Corp. VIII since July 2020, all of which are SPACS. Additionally, Mr. Lutnick has served as Chairman and Chief Executive Officer of each of Cantor Fitzgerald Income Trust, Inc. (formerly known as Rodin Global Property Trust, Inc.) and Rodin Income Trust, Inc. since February 2017 and as President of Rodin Income Trust, Inc. since January 2018, which are non-traded real estate investment trusts, or REITs. Mr. Lutnick received an undergraduate degree from Haverford College. |
Name |
Age |
Director Since |
Biographies | |||
Michael Snow | 74 | 2017 | Mr. Snow has been a director of our Company since December 2017. Mr. Snow was the Managing Member of Snow Fund One, LLC, a short volatility fund trading in S&P options, from October 2005 to March 2020. Mr. Snow is a Registered Investment Advisor and founded Snow Financial Management, LLC in 1997. Prior to establishing this company, he was employed in the banking industry for over 25 years. At the Union Bank of Switzerland, Mr. Snow was Second in Charge of the North American Region. He achieved the rank of Senior Managing Director and was Head of Fixed Income, where he was responsible for Treasury, Money Markets, Precious Metals, Foreign Exchange, Mortgage-Backed Securities, Government Securities, Derivatives, Corporate Bonds, Emerging Markets, High-Yield Securities, and Capital Markets. In addition, since August 2013, he has served as an independent director of BGC Derivative Markets, L.P., a subsidiary of BGC Partners, and, since March 2014, he has served as an independent director of Remate Lince, S.A.P.I. de C.V., a BGC affiliate and one of Mexico’s top inter-dealer brokers. BGC Derivative Markets, L.P. conducts operations as a Swap Execution Facility, which offers trading in swaps products subject to mandatory clearing, as well as swaps classified as permitted transactions. He has also served as an independent member of Cantor Clearinghouse Holdings, LLC and Cantor Futures Exchange Holdings, LLC, in each case since August 2016. |
Name |
Age |
Director Since |
Biographies | |||
Virginia S. Bauer | 65 | 2018 | Ms. Bauer has been a director of our Company since June 2018. Ms. Bauer has served as Chief Executive Officer of GTBM, Inc., a security technology company that develops and markets proprietary software solutions, since 2010. Prior thereto, Ms. Bauer served as Senior Vice President of Covenant House International from 2009 to 2010, as the Secretary of Commerce for the State of New Jersey from 2004 to 2008, and as Director of the New Jersey Lottery Commission from 2003 to 2004. In addition, Ms. Bauer has served on the Board of the New Jersey Economic Development Authority since January 2020, on the Foundation Board of Monmouth Medical Center since 2009 and on the Board of Directors of the National September 11 Memorial & Museum since 2008. She previously served on the Board of Commissioners of The Port Authority of New York and New Jersey from 2008 to 2012 and on the Advisory Board of the Lower Manhattan Development Corporation from 2001 to 2004. | |||
Kenneth A. McIntyre | 61 | 2020 | Mr. McIntyre has been a director of our Company since January 2020. Mr. McIntyre has over 25 years of experience in the commercial real estate industry. Since February 2020, Mr. McIntyre has been the Chief Executive Officer of the Real Estate Executive Council (“REEC”), having served as a founding member of the Board of Directors of the organization since 2003. REEC is a preeminent trade association in the U.S. for minority commercial real estate professionals. Since 2012, Mr. McIntyre has been the Founder and Managing Principal of PassPort Real Estate, LLC, a New York based consulting firm focused on advising developers and institutions on commercial real estate deal and platform structuring. His clients have included REAP, a non-profit that is focused on increasing the diversity of talent in the commercial real estate industry, where he served as the Executive Director, and the Port Authority of New York and New Jersey, where he served as Executive Advisor to the Office of Diversity & Inclusion. Mr. McIntyre was a former Senior Vice President and Head of Commercial Real Estate at Hudson City Savings Bank from May 2014 to May 2016. Prior to joining Hudson City Saving Bank, Mr. McIntyre was a Managing Director in MetLife’s Real Estate Investments Group with various responsibilities across both the debt and equity portfolios, including: Head of Equity Acquisitions; Head of Strategic Initiatives; Head of Real Estate Capital Markets; and Head of Commercial Mortgage Production and Pricing. Prior to joining MetLife, Mr. McIntyre held senior origination and relationship management roles at KeyBank, GE Capital Real Estate, UBS and Chase. Since March 2021, Mr. McIntyre has served on the Board of Trustees of Acadia Realty Trust. In addition, he is on the Board of Directors of The Real Estate Roundtable, where he serves on the Equity, Diversity and Inclusion Committee. Mr. McIntyre is also a Member of the Board of Governors for the Real Estate Board of New York and serves on the Boards of the National Jazz Museum of Harlem, the Yorkville Youth Athletic Association, and R*E*N*T, and is a member of the Advisory Board for Council of Urban Real Estate (CURE, f/k/a African American Real Estate Professionals of New York). |
Skills and Experience |
Bauer |
Lutnick |
McIntyre |
Snow | ||||
Business Operations |
X |
X |
X | |||||
Finance/Accounting |
X |
X |
X |
X | ||||
Risk Management |
X |
X |
X | |||||
Global Business |
X |
X | ||||||
Human Capital Management |
X |
X |
||||||
M&A |
X |
|||||||
Other Public Company Board Service and Governance |
X |
X |
X |
|||||
Environmental |
X |
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Real Estate Industry Experience |
X |
X |
||||||
Global Financial Markets |
X |
X |
Brokerage |
X |
X |
X | |||||
Regulatory |
X |
|||||||
Innovation and Strategy |
X |
X |
X |
X | ||||
Ethics and Integrity |
X |
|||||||
Senior Leadership/CEO |
X |
X |
X |
X | ||||
Technology/Information Security |
X |
X |
• | Provide liquidity to our partners and employees over time; |
• | Align the interests of our partners and employees and management with those of common stockholders; |
• | Help motivate and retain key partners and employees; and |
• | Encourage a collaborative culture that drives cross-selling and growth. |
• | Participation in the Mortgage Bankers Association Path to Diversity Scholarship Program; |
• | Sponsorship of the Summer Enrichment and Analyst Development Programs run by Artemis Real Estate Partners, a female-owned financial firm with a strong track record in fostering diversity; and |
• | Platinum Level Sponsorship of the virtual internship program run by the Real Estate Board of New York (REBNY) in partnership with the City University of New York (CUNY) and Project Destined. |
• Independence of a substantial majority of the members of the Board; • Only independent directors serve on each committee; • Board-level ESG Committee; • Annual independence review of independent outside directors; • Diverse array of personal characteristics and professional experience of the Board, consisting of 25% women and 25% persons of color; • Annual election of each member of the Board – we do not have a classified (“staggered”) Board; • The ability of our Board to require the resignation of a director who fails to obtain a majority vote for election; |
• Annual evaluation of the performance of both our Chairman and CEO; • Procedures for establishing and disseminating agendas and materials for meetings of the Board and its committees in advance; • Periodic executive sessions of independent directors; • Consideration of factors including diversity of gender, age, ethnicity, skills, experience and geographic background in considering director candidates; • Strict ethical and other criteria for membership on the Board • Detailed processes and review of all related party transactions and required approval by independent directors; • Access of the Board and its committees to management and to retain outside independent advisors; |
• No stockholder rights plan or other “poison pill” or similar anti-takeover device; • A prohibition on personal loans to directors and executive officers; • Requirement for directors to inform the Board of changes in their principal job responsibilities; • Limits on the service of directors and executive officers on other public company boards; • Director orientation and continuing education; • Annual self-assessments of the performance of our Board and its committees and individual directors; • Prohibitions against trading while in possession of material, non-public information; • Prohibitions against hedging; • Strict procedures and enforcement of our ethical standards and our conflict of interest policies, including our robust whistleblower policy – completely confidential and with a whistleblower hotline available 24/7; |
• Diversified mix of cash and short- and long- term equity awards designed to be highly retentive and risk-appropriate, and to align the interests of our executive officers with those of our stockholders; • Executive officers holding much of their personal net worth in our and our affiliates’ equity; • Robust annual review and oversight of Code of Ethics responses; • Succession planning and management development of executive officers and potential senior managers having significant responsibility for business areas; • Annual stockholder say-on-pay votes; • Annual ratification of the appointment of our independent registered public accounting firm; and • Annual review of our corporate governance policies and practices. |
Board Size: |
||||||||||||
Total Number of Directors |
4 | |||||||||||
Gender: |
Male |
Female |
Non-Binary |
Gender Undisclosed |
||||||||
Number of directors based on gender identity |
3 | 1 | — | — | ||||||||
Number of directors who identify in any of the categories below: |
| |||||||||||
African American or Black |
1 | — | — | — | ||||||||
Alaskan Native or American Indian |
— | — | — | — | ||||||||
Asian |
— | — | — | — | ||||||||
Hispanic or Latinx |
— | — | — | — | ||||||||
Native Hawaiian or Pacific Islander |
— | — | — | — | ||||||||
White |
2 | 1 | — | — | ||||||||
Two or More Races or Ethnicities |
— | — | — | — | ||||||||
LGBTQ+ |
— | |||||||||||
Undisclosed |
— |
ITEM 11. |
EXECUTIVE COMPENSATION |
• | pre-tax or after-tax net income. |
• | pre-tax or after-tax operating income; |
• | gross revenue; |
• | profit margin; |
• | stock price, dividends and/or total stockholder return; |
• | cash flow(s); |
• | market share; |
• | pre-tax or after-tax earnings per share; |
• | pre-tax or after-tax operating earnings per share; |
• | expenses; |
• | return on equity; or |
• | strategic business criteria, consisting of one or more objectives based on meeting specified revenue, market penetration, or geographic business expansion goals, cost targets, and goals relating to acquisitions or divestitures, or any combination thereof. |
• | 8.3 million and 8.0 million compensatory limited partnership units, respectively, of Newmark Holdings and BGC Holdings held by Newmark partners who are employees were redeemed or exchanged. |
• | 23.2 million and 17.4 million compensatory limited partnership units, respectively, of Newmark Holdings and BGC Holdings held by the Newmark Holdings’ partners who are independent contractors were redeemed or exchanged. Newmark also accelerated the payment of related withholding taxes to them with respect to their Newmark Holdings units. Independent contractors received one BGC Class A common share for each redeemed non-preferred BGC Holdings unit or cash and are responsible for paying any related withholding taxes. |
• | Partners with non-exchangeable non-preferred compensatory units exchanged or redeemed in connection with the 2021 Equity Event generally received restricted Class A common shares of Newmark and/or BGC to the extent tax deductible. A portion of the BGC Class A common shares received by independent contractors were unrestricted to facilitate their payment of withholding taxes. |
• | The issuance of Newmark Class A common stock related to the 2021 Equity Event reflected the June 28, 2021 exchange ratio of 0.9403. |
• | Newmark Holdings and BGC Holdings limited partnership interests with rights to convert into HDUs for cash were also redeemed in connection with the 2021 Equity Event. |
(i) | the exchange of 279,725 exchangeable Newmark Holdings PSUs into 263,025 shares of Class A common stock of Newmark based on the then applicable Exchange Ratio of 0.9403; and $1,465,874 associated with Mr. Lutnick’s non-exchangeable 193,530 Newmark Holdings PPSUs was redeemed and used for tax purposes; |
(ii) | the conversion of 552,482.62 non-exchangeable Newmark Holdings PSUs with the right to exchange PSUs into HDUs (“H-Rights”) into 552,482.62 non-exchangeable Newmark Holdings HDUs and redemption of such HDUs for their Capital Account of $7,017,000, paid in the form of Nasdaq Shares issued at $177.11 per share (which was the NASDAQ closing price as of June 28, 2021); and $7,983,000 associated with Mr. Lutnick’s non-exchangeable Newmark Holdings PPSUs with -H were redeemed and used for tax purposes; |
(iii) | the exchange of 520,380 exchangeable BGC Holdings PSUs into 520,380 shares of Class A common stock of BGC Partners, and $1,525,705 associated with Mr. Lutnick’s exchangeable BGC Holdings PPSUs was redeemed and used for tax purposes; |
(iv) | the redemption of 88,636 non-exchangeable BGC Holdings PSUs pursuant to Mr. Lutnick’s rights under his existing standing policy, and the issuance of 88,636 shares of Class A common stock of BGC Partners; |
(v) | the conversion of 1,131,774 non-exchangeable BGC Holdings PSUs with H-Rights into 1,131,774 non-exchangeable BGC Holdings HDUs and $7,983,000 associated with Mr. Lutnick’s BGC Holdings PPSUs with H- Rights was redeemed and used for tax purposes in connection with the exercise of the exercise of the BGC Holdings HDUs; and |
(vi) | the issuance of 29,059 shares of Class A common stock of Newmark. |
(i) | the exchange of 1,531,061.84 exchangeable Newmark Holdings units (comprised of 1,438,597.37 exchangeable Newmark Holdings PSUs and 92,464.47 exchangeable Newmark Holdings APSUs) into 1,439,658 shares of Class A common stock of Newmark based upon the then current exchange ratio of 0.9403; and $834,508 associated with Mr. Gosin’s exchangeable Newmark Holdings PPSUs was redeemed and used for tax purposes; |
(ii) | the conversion of 443,871.60 non-exchangeable Newmark Holdings PSUs with H-Rights into 443,871.60 non-exchangeable Newmark Holdings HDUs, and redemption of such HDUs, less any taxes and withholdings in excess of $5,362,452, paid in the form of Nasdaq shares issued at $177.11 per share (which was the NASDAQ closing price as of June 28, 2021); and $5,362,452 in connection with Mr. Gosin’s Newmark Holdings PPSUs with H-Rights was redeemed and used for tax purposes; |
(iii) | the exchange of 3,348,706 exchangeable BGC Holdings units (comprised of 3,147,085 exchangeable BGC Holdings PSUs and 201,621 exchangeable BGC Holdings APSUs) into 3,348,706 shares of Class A common stock of BGC Partners; and $298,273 associated with Mr. Gosin’s exchangeable BGC Holdings PPSUs was redeemed and used for tax purposes; |
(iv) | the conversion of 1,592,016 non-exchangeable BGC Holdings PSUs with H-Rights into 1,592,016 non-exchangeable BGC Holdings HDUs, and $1,129,499 associated with Mr. Gosin non-exchangeable BGC Holdings PPSUs was redeemed and used for tax purposes; and |
(v) | the issuance of 12,500 shares of Class A common stock of Newmark. |
(i) | the exchange of 23,124 exchangeable Newmark Holdings PSUs into 21,744 shares of Class A common stock of Newmark based on the then current exchange ratio of 0.9403 and $208,407 associated with Mr. Rispoli’s exchangeable Newmark Holdings PPSUs was redeemed and used for tax purposes; |
(ii) | 6,000 non-exchangeable Newmark Holdings PSUs were redeemed and an aggregate of 5,642 restricted shares of Newmark were issued to Mr. Rispoli based upon the then current exchange ratio of 0.9403, and $52,309 associated with Mr. Rispoli’s non-exchangeable Newmark Holdings PPSUs was redeemed and used for tax purposes; |
(iii) | the conversion of 5,846.07 non-exchangeable Newmark Holdings PSUs with H-Rights into 5,846 non-exchangeable Newmark Holdings HDUs and the redemption of such HDUs, less any taxes and withholdings in excess of $60,750, paid in the form of Nasdaq shares issued at $177.11 per share (which was the NASDAQ closing price as of June 28, 2021); and $60,750 associated with Mr. Rispoli’s PPSUs with H-Rights was redeemed and used for tax purposes; |
(iv) | the exchange of 36,985 exchangeable BGC Holdings PSUs into 36,985 shares of Class A common stock of BGC, and $134,573 associated with Mr. Rispoli’s exchangeable BGC Holdings PPSUs was redeemed and used for tax purposes; and |
(v) | the issuance of 383 shares of Class A common stock of Newmark. |
• | been able to reduce its reliance on indebtedness to execute its strategic growth plan; |
• | been able to continue to grow through the hiring of important new employees, and been able to better retain its existing employees, even as the COVID-19 pandemic has caused significant disruption in the commercial real estate industry; |
• | maintained a strong credit rating during a period of significant disruption in the commercial real estate industry; |
• | acquired and integrated the Berkeley Point Financial business in a manner that would have been much more difficult without its strong financial base, as well as acquired numerous other real estate services companies; and |
• | generally continued to thrive throughout the course of the COVID-19 pandemic despite the extremely challenged market conditions created by the pandemic. |
THE COMPENSATION COMMITTEE |
Virginia S. Bauer, Chair |
Michael Snow |
Kenneth A. McIntyre |
(a) Name and Principal Position |
(b) Year (1) (2) |
(c) Salary ($) (3) |
(d) Bonus ($) |
(e) Equity Awards (Related to Prior Periods) ($) (5) |
(f) Option Awards ($) |
(g) Non-Equity Incentive Plan Compensation ($) (6) |
(h) Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) |
(i) All Other Compensation ($) |
(j) Total ($) |
|||||||||||||||||||||||||||
Howard W. Lutnick, |
2021 | 1,000,000 | 20,000,000 | (4) |
5,025,000 | — | 9,000,000 | — | 35,025,000 | |||||||||||||||||||||||||||
Chairman |
2020 | 675,000 | (3) |
— | — | — | 3,450,000 | — | — | 4,125,000 | ||||||||||||||||||||||||||
2019 | 1,000,000 | — | — | — | 4,500,000 | — | — | 5,500,000 | ||||||||||||||||||||||||||||
Barry M. Gosin, |
2021 | 1,000,000 | — | — | 11,500,000 | — | 113,061 | (7) |
12,613,061 | |||||||||||||||||||||||||||
Chief Executive Officer |
2020 | 675,000 | (3) |
— | — | 7,933,891 | — | 119,821 | (8) |
8,728,712 | ||||||||||||||||||||||||||
2019 | 1,000,000 | — | — | — | 10,500,000 | — | 118,653 | (7) (8) |
11,618,653 | |||||||||||||||||||||||||||
Michael J. Rispoli, |
2021 | 732,327 | (2) |
— | — | — | 1,000,000 | — | — | 1,732,327 | ||||||||||||||||||||||||||
Chief Financial Officer |
2020 | 620,212 | (3) |
— | — | — | 392,288 | — | — | 1,012,500 | ||||||||||||||||||||||||||
2019 | 625,000 | (2) |
— | — | — | 700,000 | — | — | 1,325,000 | |||||||||||||||||||||||||||
Stephen M. Merkel, |
2021 | 500,000 | — | — | — | 1,000,000 | — | — | 1,500,000 | |||||||||||||||||||||||||||
Chief Legal Officer |
2020 | 452,250 | (3) |
— | — | — | 579,000 | — | — | 1,031,250 | ||||||||||||||||||||||||||
2019 | 500,000 | — | 2,072,278 | (4) |
— | 875,000 | — | — | 3,447,278 |
(1) | The table does not include matters for 2019, 2020 and 2021 described above under “Compensation Discussion and Analysis—NPSU Grants and Related Replacement and Exchange Right Grants—Previous BGC Partners Grants Attributable to Newmark” and “Compensation Discussion and Analysis—Replacement and Exchange Right Grants” because the shares granted were fewer than the number of limited partnership units redeemed/exchanged, those units had been granted in partial payment of prior years’ bonuses at full notional value, and the partnership unit and cash payment adjustments described as part of the program were incidental adjustments required by the terms of the partnership unit agreements and the timing of the program in relation to distributions on units. |
(2) | The amounts set forth in the table and corresponding footnotes reflect the total compensation awarded to each executive officer for all years presented. |
(3) | On April 27, 2020, in response to the continuing macroeconomic impact of the COVID-19 pandemic, our executive officers volunteered to reduce their annual base salaries by 50% for Messrs. Lutnick and Gosin and by 15% for Messrs. Merkel and Rispoli. These reductions were effective as of April 27, 2020 and remained in place until December 31, 2020. This table reflects actual amounts paid to the executive officers during the year. |
(4) | Column (d) includes $20,000,000 paid to Mr. Lutnick in 2021 in connection with the 2021 one-time Award described above under the heading “2021 Lutnick Award.” Column (d) does not include the remaining $30,000,000 of the Award which the Award Agreement provides shall be payable in equal installments in 2022, 2023 and 2024 subject to and in accordance with the terms of the Award. |
(5) | The 2021 amount of $5,025,000 under column (e) for Mr. Lutnick represents the value of the redemption of (i) 227,141 Newmark Holdings PPSUs at the determination price of $10.05 per PPSU in connection with the 2021 Equity Event; and (ii) 272,859 Newmark Holdings PPSUs at the determination price of $10.05 per PPSU in connection with the monetization approved by the Compensation Committee on December 21, 2021. These PPSUs were only redeemable for cash, which was used for tax payments, and were granted to Mr. Lutnick in exchange for certain long-term incentive awards in the form of NPPSUs awarded to Mr. Lutnick in 2019, which were not previously included under column (g) at full notional value. |
(6) | The amounts in column (g) reflect the bonus awards to our named executive officers under our Incentive Plan. For 2021, Mr. Lutnick’s Incentive Plan bonus was paid $4,000,000 in cash and $5,000,000 in the form of 162,549 non-exchangeable Newmark Holdings PSUs and 162,549 non-exchangeable Newmark Holdings PPSUs at $15.38 per unit; Mr. Gosin’s Incentive Plan bonus was paid $5,250,000 in cash and $6,250,000 in the form of 203,186 non-exchangeable Newmark Holdings PSUs and 203,186 non-exchangeable Newmark Holdings PPSUs at $15.38 per unit; Mr. Rispoli’s bonus was paid $416,667 in cash and $583,333 in the form of 18,964 non-exchangeable Newmark Holdings PSUs and 18,964 non exchangeable Newmark Holdings PPSUs at $15.38 per unit; and Mr. Merkel’s bonus was paid $500,000 in cash and $500,000 in the form of 16,255 non- exchangeable Newmark Holdings PSUs and 16,255 non-exchangeable Newmark Holdings PPSUs at $15.38 per unit. |
(7) | For 2020, Mr. Gosin received commissions in the amount of $16,109 payable in connection with brokerage transactions. This amount was paid in $1,611 in cash and $14,498 in the form of 1,519 non-exchangeable Newmark Holdings NPSUs. |
(8) | Mr. Gosin receives the use of a car and driver in connection with Mr. Gosin’s duties. Such personal benefits had an aggregate incremental cost of approximately, $118,653 in 2019, $103,712 in 2020 and $113,061 in 2021. |
(a) |
(b) |
(c) |
(d) |
(e) |
(f) |
(g) |
(h) |
(i) |
(j) |
(k) |
(l) |
|||||||||||||||||||||||||||||||||
Estimated Possible Payouts Under Non-Equity Incentive Plan Awards |
Estimated Future Payouts Under Equity Incentive Plan Awards |
All Other Grant Awards: Number of Shares of Stock or |
All Other Option Awards: Number of Securities |
Exercise or Base Price of Option |
Grant Date Fair Value of Stock and Option |
|||||||||||||||||||||||||||||||||||||||
Grant |
Threshold |
Target |
Maximum |
Threshold |
Target |
Maximum |
Units |
Underlying |
Awards |
Awards |
||||||||||||||||||||||||||||||||||
Name |
Date |
($) |
($) |
($)(1) |
(#) |
(#) |
(#) |
(#)(2) |
Options (#) |
($/Sh) |
($) |
|||||||||||||||||||||||||||||||||
Howard W. Lutnick |
1/1/21 | — | — | 25,000,000 | — | — | — | 500,000 | — | — | 5,025,000 | |||||||||||||||||||||||||||||||||
Barry M. Gosin |
1/1/21 | — | — | 25,000,000 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Michael J. Rispoli |
1/1/21 | — | — | 25,000,000 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Stephen M. Merkel |
1/1/21 | — | — | 25,000,000 | — | — | — | — | — | — | — |
(1) | The amounts in column (e) reflect the maximum possible individual payment under the Newmark Incentive Plan. During 2021, there were no specific minimum and target levels under the Newmark Incentive Plan. The $25,000,000 maximum amount was the maximum annual amount available for payment to any one executive officer under the Newmark Incentive Plan for 2021, and our Compensation Committee retained negative discretion to award less than this amount. Actual amounts paid to each named executive officer for 2021 are set forth in column (g) of the Summary Compensation Table. |
(2) | The amounts in columns (i) and (l) reflect aggregate grants under the Incentive Plan for Mr. Lutnick for 2021. The $5,025,000 amount in column (l) for Mr. Lutnick represents the value of the redemption of (i) 227,141 Newmark Holdings PPSUs at the determination price of $10.05 per PPSU in connection with the 2021 Equity Event; and (ii) 272,859 Newmark Holdings PPSUs at the determination price of $10.05 per PPSU in connection with the monetization approved by the Compensation Committee on December 21, 2021. These PPSUs were only redeemable for cash and were granted to Mr. Lutnick in exchange for certain long-term incentive awards in the form of NPPSUs awarded to Mr. Lutnick in 2019, which were not previously included under column (g) on the Summary Compensation Table at full notional value. |
Option Awards |
Grant Awards |
|||||||||||||||||||||||||||||||||||
(a) Name |
(b) Number of Securities Underlying Unexercised Options/ Exchangeable Units Exercisable/ Exchangeable (1) (#) |
(c) Number of Securities Underlying Unexercised Options/ Exchangeable Units Unexercisable/ Unexchangeable (2) (#) |
(d) Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) |
(e) Option Exercise Price ($) |
(f) Option Expiration Date |
(g) Number of Shares or Units of Stock That Have Not Vested (#) (2) |
(h) Market Value of Shares or Units of Stock That Have Not Vested (2) |
(i) Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) |
(j) Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) |
|||||||||||||||||||||||||||
Howard W. Lutnick |
279,725 | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Barry M. Gosin |
618,572 | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Michael J. Rispoli |
436 | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Stephen M. Merkel |
0 | — | — | — | — | — | — | — | — |
(1) | For Mr. Lutnick, column (b) represents 193,348 exchangeable Newmark Holdings PSUs, and 86,377 exchangeable Newmark Holdings PSUs granted in connection with the Spin-Off held as of December 31, 2021. |
(2) | Column (c) does not include non-exchangeable Newmark Holdings PPSUs held as of December 31, 2021 because they did not represent a right to acquire our Class A common stock. As of December 31, 2021, the non-exchangeable Newmark Holdings PPSUs held by the named executive officers were as follows: Mr. Lutnick, 0 units; Mr. Gosin, 0 units; Mr. Merkel, 48,737 units; and Mr. Rispoli, 68,083 units. |
Name |
Base Salary |
Bonus ($) (6) |
Earned but Unpaid Commissions |
Non-Compete Payments ($) |
Vesting of Equity Compensation ($) |
Welfare Benefit Continuation ($) |
Tax Gross- Up Payment ($) (5) |
Total ($) |
||||||||||||||||||||||||
Howard W. Lutnick |
||||||||||||||||||||||||||||||||
Termination of Employment in connection with a Change in Control(1) |
2,000,000 | 18,000,000 | — | — | — | 100,998 | — | 20,100,998 | ||||||||||||||||||||||||
Extension of Employment in connection with a Change in Control Termination of |
1,000,000 | 9,000,000 | — | — | — | 100,998 | 10,100,998 | |||||||||||||||||||||||||
Employment without Cause or involuntary Removal from the position Of Chairman on or after a Change in Control(6) |
30,000,000 | — | — | — | — | 30,000,000 | ||||||||||||||||||||||||||
Barry M. Gosin Termination of Employment without Cause Prior to a Change in Control(2) |
1,000,000 | — | — | 2,000,000 | (5) |
— | — | — | 3,000,000 | |||||||||||||||||||||||
Termination of Employment without Cause in connection with a Change in Control(3) |
1,000,000 | — | — | 2,000,000 | (4) |
— | — | — | 3,000,000 | |||||||||||||||||||||||
Any Termination of Employment |
— | — | — | 2,000,000 | (4) |
— | — | — | 2,000,000 |
(1) | Upon a change in control at December 31, 2021, Mr. Lutnick would have had the right to receive (i) replacement of any partnership units ineligible for exchange rights with new partnership units eligible for such exchange rights, (ii) grants of immediately exchangeable exchange rights into stock or cash, as applicable, with respect to any non-exchangeable limited partnership units (including those replacement units described in clause (i)); and (iii) the immediate lapse of any restrictions on transferability of any shares of restricted stock held by him at such time. |
(2) | Upon a termination of Mr. Gosin’s employment without cause, any unvested compensatory partnership units held by Mr. Gosin would vest immediately. At December 31, 2021, Mr. Gosin had no unvested partnership units. See “—Employment Agreements” below. |
(3) | Upon a change in control at December 31, 2021, any PSUs held by Mr. Gosin in Newmark Holdings and BGC Holdings as of such date would have been immediately exchangeable into restricted shares of Class A common stock of Newmark or BGC, as applicable, transferable ratably over the first through third anniversaries of the Change in Control, subject to certain conditions. Mr. Gosin also has this right with respect to any PSUs that he then holds in BGC Holdings in the event of a change of control of BGC Partners under the terms of his agreement with BGC Holdings. |
(4) | Following a termination of Mr. Gosin’s employment for any reason, he would be eligible to receive a monthly cash payment equal to $83,333 in exchange for his non-compete for up to 24 months; provided that the Company may elect to release Mr. Gosin from his non-compete and cease making such payments at any time. If the Company elected to enforce Mr. Gosin’s non-compete for the full 24-month period, the value of such payment would be $2,000,000. |
(5) | Mr. Lutnick is also entitled to a tax gross-up for excess parachute payments, if any, that would be due in respect of the impact a change in control would have on certain of his outstanding partnership units as stated in footnote (1). The aggregate tax-gross up payment upon a termination of employment in connection with a change of control is $32,440,025 when calculated based upon the equity compensation in footnote (1), base salary, bonus, and welfare benefit continuation as of December 31, 2021. The aggregate tax-gross up payment upon an extension of employment in connection with a change of control is $19,192,922 when calculated based upon the equity compensation in footnote (1), base salary, bonus, and welfare benefit continuation as of December 31, 2021. |
(6) | Subject to and in accordance with the terms of Mr. Lutnick’s 2021 one-time Award, in the event of a “Vesting Termination” (defined in the Award Agreement as (i) a termination of Mr. Lutnick’s employment by the Company without “Cause” (as that term is defined in the Award Agreement) or (ii) an involuntary removal of the Executive from the position of Chairman of the Board on or after the occurrence of a Change in Control (as that term is defined in the Change of Control Agreement dated as of December 13, 2017 by and between Mr. Lutnick and the Company), any amounts not vested will immediately become fully vested. The provisions of the Change of Control Agreement do not apply to the Lutnick Award. |
• | the annual total compensation of the median employee of the Company (other than the Chairman) was $86,497; |
• | the annual total compensation of the Chairman, as reported in the Summary Compensation Table, was $35,025,000; and |
• | the ratio of the annual total compensation of the Chairman to the median employee of the Company was approximately 405 to 1. |
• | an annual cash retainer of $100,000, |
• | an annual stipend for the chair of our Compensation Committee of $15,000, |
• | an annual stipend for the chair of our ESG Committee of $15,000, and |
• | an annual stipend for the chair of our Audit Committee of $25,000. |
(a) Name (1) |
(b) Fees Earned or Paid in Cash ($) |
(c) Stock Awards ($)(2) |
(d) Option Awards ($)(3) |
(e) Non-Equity Incentive Plan Compensation ($) |
(f) Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) |
(g) All Other Compensation ($) |
(h) Total ($) |
|||||||||||||||||||||
Virginia Bauer |
168,250 | 50,000 | — | — | — | — | 218,250 | |||||||||||||||||||||
Director |
||||||||||||||||||||||||||||
Michael Snow |
179,500 | 50,000 | — | — | — | — | 229,500 | |||||||||||||||||||||
Director |
||||||||||||||||||||||||||||
Kenneth A. McIntyre |
167,250 | 50,000 | — | — | — | — | 217,250 | |||||||||||||||||||||
Director |
||||||||||||||||||||||||||||
Peter F. Cervinka (4) |
44,250 | — | — | — | — | — | 44,250 | |||||||||||||||||||||
Former Director |
(1) | Howard Lutnick, our Chairman, is not included in this table as he is an employee of our Company and thus received no compensation for his services as director. The compensation received by Mr. Lutnick as an employee of our Company is shown in the Summary Compensation Table. This table includes compensation paid with respect to 2021. |
(2) | Reflects the grant date fair value of RSUs granted on December 17, 2021 to each of Messrs. Snow and McIntyre and Ms. Bauer. More information with respect to the calculation of these amounts is included in the footnotes to our consolidated financial statements included in Item 8 of our Annual Report on Form 10-K. On December 17, 2021, each of Messrs. Snow and McIntyre and Ms. Bauer were granted 3,154 RSUs. As of March 31, 2022, Mr. Cervinka had no RSUs outstanding; Mr. Snow had 9,179 RSUs outstanding, Mr. McIntyre had 9,179 RSUs outstanding and Ms. Bauer had 9,179 RSUs outstanding. |
(3) | No options were granted to non-employee directors in 2021. As of December 31, 2021, none of the non-employee directors had any options outstanding. |
(4) | Mr. Cervinka resigned effective April 29, 2021. |
ITEM 12. |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS |
Name |
Class B |
Class A |
||||||||||||||
Common Stock |
Common Stock |
|||||||||||||||
Shares |
% |
Shares |
% |
|||||||||||||
5% Beneficial Owners(1): |
||||||||||||||||
Cantor Fitzgerald, L.P. |
45,541,678 | (2) |
99.2 | (3) |
45,541,678 | (4) |
21.3 | (5) | ||||||||
CF Group Management, Inc.(10) |
45,895,004 | 6) |
100.0 | (3) |
46,920,616 | (7) |
21.8 | 8) | ||||||||
Vanguard Group Inc.(1) |
— | — | 24,904,046 | 14.8 | ||||||||||||
BlackRock, Inc.(1) |
— | — | 11,012,889 | 6.5 | ||||||||||||
Executive Officers and Directors(1): |
||||||||||||||||
Executive Officers |
||||||||||||||||
Howard W. Lutnick(11) |
45,894,004 | (9) |
100.0 | (3) |
60,313,747 | (12) |
27.1 | (13) | ||||||||
Barry M. Gosin |
— | — | 4,525,787 | (14) |
2.7 | (15) | ||||||||||
Stephen M. Merkel |
— | — | 48,880 | (16) |
* | |||||||||||
Michael J. Rispoli |
— | — | 25,926 | (17) |
* | |||||||||||
Directors |
||||||||||||||||
Michael Snow |
— | — | 23,995 | (18) |
* | |||||||||||
Virginia S. Bauer |
— | — | 33,903 | (19) |
* | |||||||||||
Kenneth A. McIntyre |
— | — | 11,912 | (20) |
* | |||||||||||
All executive officers and directors as a group (7 persons) |
45,894,004 | 100.0 | 64,984,150 | 29.2 | (21) |
* | Less than 1% |
(1) | Based upon information supplied by directors, executive officers and 5% beneficial owners in filings under Sections 13(d) and 16(a) of the Securities Exchange Act of 1934, as amended (which we refer to as the “Exchange Act”). |
(2) | Consists of (a) 20,932,207 shares of our Class B common stock held directly and (b) 24,609,471 shares of our Class B common stock acquirable upon exchange of 26,083,170 Newmark Holdings exchangeable limited partnership units held by Cantor. |
(3) | Percentage based on (a) 21,285,533 shares of our Class B common stock outstanding and (b) 24,609,471 shares of our Class B common stock acquirable upon exchange of 26,083,170 Newmark Holdings exchangeable limited partnership units held by Cantor. |
(4) | Consists of (a) 20,932,207 shares of our Class A common stock acquirable upon conversion of 20,932,207 shares of our Class B common stock held directly by Cantor and (b) 24,609,471 shares of our Class A common stock acquirable upon exchange of 26,083,170 Newmark Holdings exchangeable limited partnership units held by Cantor. |
(5) | Percentage based on (a) 168,515,183 shares of our Class A common stock outstanding as of March 31, 2022, (b) 20,932,207 shares of our Class A common stock acquirable upon conversion of 20,932,207 shares of our Class B common stock held by Cantor, and (c) 24,609,471 shares of our Class A common stock acquirable upon exchange of 26,083,170 Newmark Holdings exchangeable limited partnership units held by Cantor. |
(6) | Consists of (a) 353,326 shares of our Class B common stock held by CFGM, (b) 20,932,207 shares of our Class B common stock held by Cantor, and (c) 24,609,471 shares of our Class B common stock acquirable upon exchange of 26,083,170 Newmark Holdings exchangeable limited partnership units held by Cantor. |
(7) | Consists of (a) 353,326 shares of our Class A common stock acquirable upon conversion of 353,326 shares of our Class B common stock held by CFGM, (b) 951,076 shares of our Class A common stock acquirable upon exchange of 951,076 April 2008 distribution rights by CFGM, receipt of which has been deferred, (c) 74,536 shares of our Class A common stock acquirable upon exchange of 74,536 February 2012 distribution rights by CFGM, receipt of which has been deferred, (d) 20,932,207 shares of our Class A common stock acquirable upon conversion of 20,932,207 shares of our Class B common stock held by Cantor, and (e) 24,609,471 shares of our Class A common stock acquirable upon exchange of 26,083,170 Newmark Holdings exchangeable limited partnership units held by Cantor. |
(8) | Percentage based on (a) 168,515,183 shares of our Class A common stock outstanding as of March 31, 2022, (b) 21,285,533 shares of our Class A common stock acquirable upon conversion of 21,285,533 shares of our Class B common stock held by Cantor and CFGM (c) 24,609,471 shares of our Class A common stock acquirable upon exchange of 26,083,170 Newmark Holdings exchangeable limited partnership units held by Cantor, (d) 951,076 shares of our Class A common stock acquirable upon exchange of 951,076 April 2008 distribution rights by CFGM, receipt of which has been deferred, and (e) 74,536 shares of our Class A common stock acquirable upon exchange of 74,536 February 2012 distribution rights by CFGM, receipt of which has been deferred. |
(9) | Consists of (a) 353,326 shares of our Class B common stock held by CFGM, (b) 20,932,207 shares of our Class B common stock held by Cantor, and (c) 24,609,471 shares of our Class B common stock acquirable upon exchange of 26,083,170 Newmark Holdings exchangeable limited partnership units held by Cantor. |
(10) | CFGM is the managing general partner of Cantor. |
(11) | Mr. Lutnick is the Chairman and Chief Executive Officer of CFGM and also the trustee of an entity that is the sole shareholder of CFGM. CFGM is the managing general partner of Cantor. (12) Mr. Lutnick’s holdings consist of: |
(i) | 2,330,973 shares of our Class A common stock held directly; |
(ii) | 234,339 of our Class A common stock held in Mr. Lutnick’s 401(k) account (as of March 31, 2022); |
(iii) | 4,274,015 shares of our Class A common stock held in various trust, retirement and custodial accounts consisting of (a) 301,803 shares held by a trust for the benefit of descendants of Mr. Lutnick and his immediate family (the “Trust”), of which Mr. Lutnick’s wife is one of two trustees and Mr. Lutnick has limited powers to remove and replace such trustees, (b) 112,405 shares held in a Keogh retirement account for Mr. Lutnick, (c) 249,498 shares held by trust accounts for the benefit of Mr. Lutnick and members of his immediate family, (d) 3,585,184 shares held in Mr. Lutnick’s personal asset trust, of which he is the sole trustee, (e) 13,268 shares held in other retirement accounts, (f) 7,827 shares held in custodial accounts for the benefit of certain members of Mr. Lutnick’s family under the Uniform Gifts to Minors Act, and (g) 4,030 shares of Class A common stock held in other retirement accounts for Mr. Lutnick’s spouse; |
(iv) | 353,326 shares of our Class A common stock acquirable upon conversion of 353,326 shares of our Class B common stock held by CFGM; |
(v) | 20,932,207 shares of our Class A common stock acquirable upon conversion of 20,932,207 shares of our Class B common stock held by Cantor; |
(vi) | 24,609,471 shares of our Class A common stock acquirable upon exchange of 26,093,170 Newmark Holdings exchangeable limited partnership interests held by Cantor; |
(vii) | 3,591,626 shares of our Class A common stock acquirable upon exchange of 3,591,626 April 2008 distribution rights by Mr. Lutnick, receipt of which has been deferred; |
(viii) | 571,238 shares of our Class A common stock acquirable upon exchange of 571,238 February 2012 distribution rights by Mr. Lutnick, receipt of which has been deferred; |
(ix) | 951,076 shares of our Class A common stock acquirable upon exchange of 951,076 April 2008 distribution rights by CFGM, receipt of which has been deferred; |
(x) | 74,536 shares of our Class A common stock acquirable upon exchange of 74,536 February 2012 distribution rights by CFGM, receipt of which has been deferred; |
(xi) | 746,955 shares of our Class A common stock acquirable upon exchange of 746,955 April 2008 distribution rights by the Trust, receipt of which has been deferred; |
(xii) | 950,057 shares of our Class A common stock acquirable upon exchange of 950,057 April 2008 distribution rights by KBCR, by virtue of Mr. Lutnick being the managing member of KBCR, which is a non-managing General Partner of Cantor, receipt of which has been deferred; |
(xiii) | 133,587 shares of our Class A common stock acquirable upon exchange of 133,587 February 2012 distribution rights by KBCR, receipt of which has been deferred; |
(xiv) | 75,077 shares of our Class A common stock acquirable upon exchange of 75,077 April 2008 distribution rights by LFA, receipt of which has been deferred; |
(xv) | 7,512 shares of our Class A common stock acquirable upon exchange of 7,512 February 2012 distribution rights by LFA, receipt of which has been deferred; |
(xvi) | 278,772 shares of our Class A common stock owned of record by KBCR; |
(xvii) | 16,557 shares of our Class A common stock owned of record by LFA; and |
(xviii) | 182,423 shares of Class A common stock acquirable upon exchange of 193,347 Newmark Holdings exchangeable limited partnership units by Mr. Lutnick. These amounts include an aggregate of 7,284,934 shares of our class A common stock acquirable upon exchange of 6,873,336 distribution rights consisting of (a) 6,469,630 shares of our Class A common stock acquirable upon exchange of 6,104,096 April 2008 distribution rights and (b) 815,305 shares of our Class A common stock acquirable upon exchange of 769,240 February 2012 distribution rights, which may generally be issued to such partners upon request. |
(13) | Percentage based on (a) 168,515,183 shares of Class A common stock outstanding as of October 18, 2021, (b) 21,285,533 shares of Class A common stock outstanding acquirable upon conversion of 21,285,533 shares of our Class B common stock held by Cantor and CFGM (c) 24,609,471 shares of Class A common stock acquirable upon exchange of 26,083,170 Newmark Holdings exchangeable limited partnership interests held by Cantor, (d) 3,591,626 shares of our Class A common stock acquirable upon exchange of 3,591,626 April 2008 distribution rights by Mr. Lutnick, receipt of which has been deferred, (e) 571,238 shares of our Class A common stock acquirable upon exchange of 571,238 February 2012 distribution rights by Mr. Lutnick, receipt of which has been deferred, (f) 951,076 shares of our Class A common stock acquirable upon exchange of 951,076 April 2008 distribution rights by CFGM, receipt of which has been deferred, (g) 74,536 shares of our Class A common stock acquirable upon exchange of 74,536 February 2012 distribution rights by CFGM, receipt of which has been deferred, (h) 746,955 shares of our Class A common stock acquirable upon exchange of 746,955 April 2008 distribution rights by the Trust, receipt of which has been deferred, (i) 950,057 shares of our Class A common stock acquirable upon exchange of 950,057 April 2008 distribution rights by KBCR, receipt of which has been deferred, (j) 133,587 shares of our Class A common stock acquirable upon exchange of 133,587 February 2012 distribution rights by KBCR, receipt of which has been deferred, (k) 75,077 shares of our Class A common stock acquirable upon exchange of 75,077 April 2008 distribution rights by LFA, receipt of which has been deferred, (l) 7,512 shares of our Class A common stock acquirable upon exchange of 7,512 February 2012 distribution rights by LFA, receipt of which has been deferred and (m) 182,423 shares of Class A common stock acquirable upon exchange of 193,347 Newmark Holdings exchangeable limited partnership units by Mr. Lutnick. |
(14) | Mr. Gosin’s holdings consists of (a) 3,999,598 shares of our Class A common stock held directly, and (b) 526,189 shares of our Class A common stock acquirable upon exchange of 557,699 Newmark Holdings exchangeable limited partnership units. |
(15) | Percentage based on (a) 168,515,183 shares of our Class A common stock outstanding as of March 31, 2022, and (b) 526,189 shares of our Class A common stock acquirable upon exchange of 557,699 Newmark Holdings exchangeable limited partnership units held by Mr. Gosin. |
(16) | Mr. Merkel’s holdings consist of (a) 45,979 shares of our Class A common stock held directly, and (b) 2,901 held in trusts for the benefit of the Mr. Merkel’s immediate family, of which Mr. Merkel’s spouse is the sole trustee of each trust and Mr. Merkel has the power to remove and replace such trustee. |
(17) | Mr. Rispoli’s holdings consists of 25,926 shares of our Class A common stock held directly. |
(18) | Mr. Snow’s holdings consist of (a) 23,983 shares of our Class A common stock held directly, and (b) 12 shares of our Class A common stock held by Mr. Snow’s son. |
(19) | Ms. Bauer’s holdings consist of 33,903 shares of our Class A common stock held directly. |
(20) | Mr. McIntyre’s holdings consist of 11,912 shares of our Class A common stock held directly. |
(21) | Percentage based on (a) 168,515,183 shares of our Class A common stock outstanding as of March 31, 2022, (b) 21,285,533 shares of our Class A common stock acquirable upon conversion of 21,285,533 shares of our Class B common stock, (c) 24,609,471 shares of our Class A common stock acquirable upon exchange of 26,083,170 Newmark Holdings exchangeable limited partnership units held by Cantor, (d) 751,046 shares of our Class A common stock acquirable upon exchange of 708,612 Newmark Holdings exchangeable limited partnership units held by our executive officers and directors, (e) 3,591,626 shares of our Class A common stock acquirable upon exchange of 3,591,626 April 2008 distribution rights by Mr. Lutnick, receipt of which has been deferred, (f) 571,238 shares of our Class A common stock acquirable upon exchange of 571,238 February 2012 distribution rights by Mr. Lutnick, receipt of which has been deferred, (g) 951,076 shares of our Class A common stock acquirable upon exchange of 951,076 April 2008 distribution rights by CFGM, receipt of which has been deferred, (h) 74,536 shares of our Class A common stock acquirable upon exchange of 74,536 February 2012 distribution rights by CFGM, receipt of which has been deferred, (i) 746,955 shares of our Class A common stock acquirable upon exchange of 746,955 April 2008 distribution rights by the Trust, receipt of which has been deferred, (j) 950,057 shares of our Class A common stock acquirable upon exchange of 950,057 April 2008 distribution rights by KBCR, receipt of which has been deferred, (k) 133,587 shares of our Class A common stock acquirable upon exchange of 133,587 February 2012 distribution rights by KBCR, receipt of which has been deferred, (l) 75,077 shares of our Class A common stock acquirable upon exchange of 75,077 April 2008 distribution rights by LFA, receipt of which has been deferred, and (m) 7,512 shares of our Class A common stock acquirable upon exchange of 7,512 February 2012 distribution rights by LFA, receipt of which has been deferred. |
Number of securities to be issued upon exercise of outstanding restricted stock units, options, warrants and rights (a) |
Weighted-average exercise price of outstanding options, warrants and rights (b) |
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) |
||||||||||
Equity Plan (approved by security holders) |
14,496,923 | $ | 10.62 | 330,022,211 | ||||||||
Equity compensation plans not approved by security holders |
— | — | — | |||||||||
Total |
14,496,923 | $ | 10.62 | 330,022,211 |
ITEM 13. |
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE |
• | the principal corporate transactions pursuant to which BGC, BGC Holdings and BGC U.S. OpCo and their respective subsidiaries (other than the Newmark group (defined below), the “BGC group”) transferred to Newmark, Newmark Holdings and Newmark OpCo and their respective subsidiaries (the “Newmark group”) the assets and liabilities of the BGC group relating to BGC’s Real Estate Services business (the “Separation”); |
• | the proportional distribution in the Separation of interests in Newmark Holdings to holders of interests in BGC Holdings; |
• | the IPO and certain pre-IPO contributions of assets by BGC Partners to Newmark in exchange for additional shares thereof; |
• | the assumption and repayment of indebtedness by the BGC group and the Newmark group, as further described below; |
• | the Spin-Off, including the termination of certain arrangements between the BGC Group and the Newmark Group immediately prior thereto |
• | future access to information, records and personnel necessary or appropriate to comply with regulatory requests or inquiries, for the preparation of financial statements or tax returns, or to conduct litigation; and |
• | other agreements governing the relationship between BGC, Newmark and Cantor. |
• | the transferred liabilities; |
• | the failure of any member of the Newmark group or any other person to pay, perform or otherwise promptly discharge any of the transferred liabilities in accordance with their terms, whether prior to, at or after the Separation; |
• | any breach by any member of the Newmark group of the Separation and Distribution Agreement or any of the ancillary agreements, other than the transition services agreement or the administrative services agreement; |
• | except to the extent relating to an excluded liability, any guarantee, indemnification or contribution obligation, surety bond or other credit support agreement or arrangement for the benefit of any member of the Newmark group by any member of the BGC Partners group that survives following the Separation; and |
• | any untrue statement or alleged untrue statement of a material fact in our registration statement on Form S-1 with respect to our IPO other than statements made explicitly in the name of a member of the BGC Partners group (including the reasons of the Board of Directors of BGC Partners for the Separation) or specifically relating to the BGC Partners group or the BGC Partners business. |
• | the excluded liabilities; |
• | the failure of any member of the BGC Partners group or any other person to pay, perform or otherwise promptly discharge any of the excluded liabilities in accordance with their terms, whether prior to, at or after the Separation; |
• | any breach by any member of the BGC Partners group of the Separation and Distribution Agreement or any of the ancillary agreements, other than the transition services agreement; |
• | except to the extent relating to a transferred liability, any guarantee, indemnification or contribution obligation, surety bond or other credit support agreement or arrangement for the benefit of any member of the BGC Partners group by any member of the Newmark group that survives following the Separation; and |
• | any untrue statement or alleged untrue statement of a material fact in our registration statement on Form S-1 with respect to our IPO, but only with respect to statements made explicitly in the name of a member of the BGC Partners group (including the reasons of the Board of Directors of BGC Partners for the Separation) or specifically relating to the BGC Partners group or the BGC Partners business. |
• | a general partnership interest, which is held indirectly by us; |
• | a special voting limited partnership interest, which is held indirectly by us and which entitles us to remove and appoint the general partner of Newmark Holdings; |
• | Newmark Holdings exchangeable limited partnership interests, which are held by Cantor; |
• | Newmark Holdings founding partner interests, which are limited partnership interests that will be issued in the Separation in respect of BGC Holdings founding partner interests (which were issued to certain partners in connection with the 2008 separation of BGC Partners from Cantor); and |
• | Newmark Holdings limited partnership interests and units, including REU and AREU interests and working partner interests (including RPU, ARPU, PSI, PSE, APSI, PSU, APSU, HDU, LPU and NPSU interests and Preferred Units (as defined below)). |
• | Preferred Units (“Preferred Units”), which are working partner units that may be awarded to holders of, or contemporaneous with the grant of, PSUs, PSIs, PSEs, LPUs, REUs, RPUs and AREUs and which carry the same name as the underlying unit, with the insertion of an additional “P” to designate them as Preferred Units. Preferred Units cannot be made exchangeable into shares of Class A common stock, and they can only be exchanged for cash, at the determination price on the date of grant, |
• | pursuant to the Separation or as otherwise contemplated by the Separation and Distribution Agreement or the Newmark Holdings limited partnership agreement; |
• | to Cantor and members of the Cantor group, (1) in connection with a reinvestment in Newmark Holdings or (2) in the event of a termination or bankruptcy of a founding/working partner or limited partnership unit holder or the redemption of a founding/working partner interest or limited partnership unit pursuant to the Newmark Holdings limited partnership agreement; |
• | with respect to Newmark Holdings founding/working partner interests, to an eligible recipient, which means any limited partner or member of the Cantor group or any affiliate, employee service provider or partner thereof, in each case as directed by a Newmark Holdings exchangeable limited partner majority in interest (provided that such person or entity is not primarily engaged in a business that competes with Newmark Holdings or its subsidiaries); |
• | as otherwise agreed by the general partner and a Newmark Holdings exchangeable limited partner interest majority in interest; |
• | pursuant to the Participation Plan; |
• | to any then-current founding/working partner or limited partnership unit holder pursuant to the Newmark Holdings limited partnership agreement; or |
• | to any Newmark Holdings partner in connection with a conversion of an issued unit and interest into a different class or type of unit and interest. |
• | If the legacy BGC Holdings units and legacy Newmark Holdings unit are held by an employee of the BGC group providing services solely to the BGC group, then BGC Partners shall make such determination; |
• | If the legacy BGC Holdings units and legacy Newmark Holdings unit are held by an employee of the Newmark group providing services solely to the Newmark group, then Newmark shall make such determination; and |
• | If the legacy BGC Holdings units and legacy Newmark Holdings unit are held by an employee of the BGC group, the Newmark group or the Cantor group providing services to both the BGC group and the Newmark group, then BGC Partners shall make such determination to the extent that the grant of the exchange right relates to compensation for services by such employee to the BGC group, and Newmark shall make such determination to the extent that the |
grant of the exchange right relates to compensation for services by such employee to the Newmark group. Grants of exchangeability may be made at any time in the discretion of the relevant service recipient, and future grant practices may differ from prior practices, including without limitation in connection with performance achievement, changes in incentive arrangements, accounting principles, and tax laws (including deductibility of compensation) and other applicable laws. |
• | alter the interest of any partner in the amount or timing of distributions or the allocation of profits, losses or credits, if such alteration would either materially adversely affect the economic interest of a partner or would materially adversely affect the value of interests, without the consent of the partners holding at least two-thirds of all units, in the case of an amendment applying in substantially similar manner to all classes of interests, or two-thirds in interest of the affected class or classes of the partners, in the case of any other amendment; or |
• | alter the special voting limited partner’s ability to remove a general partner. |
• | a general partnership interest, which is held indirectly by Newmark Holdings; |
• | limited partnership interests, which are held by Newmark and Newmark Holdings; and |
• | a special voting limited partnership interest, which is held indirectly by Newmark Holdings and which entitles the holder thereof to remove and appoint the general partner of Newmark OpCo. |
• | pursuant to the Separation; |
• | to Newmark and/or Newmark Holdings and members of their group, as the case may be, in connection with an investment in Newmark OpCo; |
• | to Newmark Holdings or members of its group in connection with a redemption pursuant to the Newmark Holdings limited partnership agreement; |
• | as otherwise agreed by each of the general partner and the limited partners (by affirmative vote of the limited partners holding a majority of the units underlying limited partnership interests outstanding of Newmark OpCo (except that if Newmark Holdings and its group holds a majority in interest and Cantor and its group holds a majority of units underlying the Newmark Holdings exchangeable limited partnership interests, then majority of interest means Cantor) (which we refer to as a “Newmark OpCo majority in interest”)); |
• | to Newmark or Newmark Holdings in connection with a grant of equity by Newmark or Newmark Holdings; and |
• | to any Newmark OpCo partner in connection with a conversion of an issued unit and interest into a different class or type of unit and interest. |
• | alter the interest of any partner in the amount or timing of distributions or the allocation of profits, losses or credits, if such alteration would either materially adversely affect the economic interest of a partner or would materially adversely affect the value of interests, without the consent of the partners holding at least two-thirds of all units, in the case of an amendment applying in substantially similar manner to all classes of interests, or two-thirds in interest of the affected class or classes of the partners, in the case of any other amendment; or |
• | alter the special voting limited partner’s ability to remove a general partner. |
• | the Adjustment Factor shall be equal to the Reinvestment Cash divided by the Newmark Current Market Price (as defined in the Separation and Distribution Agreement) as of the day prior to the date on which the adjustment to the Exchange Ratio is made for such fiscal quarter; provided |
• | if, in any subsequent fiscal quarter, the Exchange Ratio shall be further adjusted and the Newmark Current Market Price as of the day prior to the date on which such further adjustment is made is greater than the Newmark Current Market Price used in the bullet above, then the Adjustment Factor for such prior fiscal quarter shall be re-calculated using such greater Newmark Current Market Price. |
• | administration and benefits services; |
• | employee benefits, human resources and payroll services; |
• | financial and operations services; |
• | internal auditing services; |
• | legal related services; |
• | risk and credit services; |
• | accounting and general tax services; |
• | office space; |
• | personnel, hardware and equipment services |
• | communication and data facilities; |
• | facilities management services; |
• | promotional, sales and marketing services; |
• | procuring of insurance coverage; and |
• | any miscellaneous services to which the parties reasonably agree. |
• | potential acquisitions and dispositions of businesses; |
• | the issuance, acquisition or disposition of securities by us; |
• | the election of new or additional directors to our Board of Directors; |
• | the payment of dividends by us (if any), distribution of profits by Newmark OpCo and/or Newmark Holdings and repurchases of shares of our Class A common stock or purchases of Newmark Holdings limited partnership interests or other equity interests in our subsidiaries, including from Cantor or our executive officers, other employees, partners and others; |
• | any loans to or from us or Cantor |
• | business operations or business opportunities of ours and Cantor’s that would compete with the other party’s business opportunities; |
• | intellectual property matters; |
• | business combinations involving us; and |
• | the nature, quality and pricing of administrative services and transition services to be provided to or by BGC Partners or Cantor or their respective affiliates. |
• | such contract, agreement, arrangement or transaction is approved by our Board of Directors or any committee thereof by the affirmative vote of a majority of the disinterested directors, even if the disinterested directors constitute less than a quorum; |
• | such contract, agreement, arrangement or transaction is approved by our stockholders by the affirmative vote of a majority of the voting power of all of our outstanding shares of capital stock entitled to vote thereon, excluding from such calculation shares of capital stock that are beneficially owned (as such term is defined in Rule 16a-1(a)(2) promulgated by the SEC under the Exchange Act) by a BGC Partners Company or a Cantor Company, respectively; or |
• | such contract, agreement, arrangement or transaction, judged according to the circumstances at the time of the commitment, is fair to us. |
• | “BGC Partners Company” means BGC Partners or any of its affiliates (other than us and our subsidiaries); |
• | “Cantor Company” means Cantor or any of its affiliates (other than us and our subsidiaries); |
• | “representatives” means, with respect to any person, the directors, officers, employees, general partners or managing member of such person; and |
• | “corporate opportunity” means any business opportunity that we are financially able to undertake, that is, from its nature, in our lines of business, is of practical advantage to us and is one in which we have an interest or a reasonable expectancy, and in which, by embracing the opportunities, the self-interest of a BGC Partners Company or a Cantor Company or any of their respective representatives, as the case may be, will be brought into conflict with our self-interest. |
ITEM 14. |
PRINCIPAL ACCOUNTANT FEES AND SERVICES |
Year Ended December 31, |
||||||||
2021 |
2020 |
|||||||
Audit fees |
3,497,960 |
2,719,554 |
||||||
Audit—related fees |
317,904 |
195,090 |
||||||
Tax fees |
1,482,590 |
1,426,640 |
||||||
All other fees |
— |
— |
||||||
|
|
|
|
|||||
Total |
5,298,454 |
4,341,284 |
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|
|
|
|
Newmark Group, Inc. | ||
By: | /s/ Howard W. Lutnick | |
Name: | Howard W. Lutnick | |
Title: | Chairman |