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EQUITY-BASED COMPENSATION
 12 Months Ended
Dec. 31, 2022
Share-Based Payment Arrangement [Abstract]  
EQUITY-BASED COMPENSATION
8. EQUITY-BASED COMPENSATION
The Company grants equity-based compensation awards in the form of RSUs and Incentive Units to its management, employees, consultants and independent members of the Board under the 2021 Omnibus Equity Incentive Plan (“2021 Equity Incentive Plan”). The total number of Class A Shares and Blue Owl Operating Group Units, collectively, that may be issued under the 2021 Equity Incentive Plan is 101,230,522, of which 36,130,910 remain available as of December 31, 2022. To the extent that an award expires or is canceled, forfeited, terminated, surrendered, exchanged or withheld to cover tax withholding obligations, the unissued awards will again be available for grant under the 2021 Equity Incentive Plan.
The table below presents information regarding equity-based compensation expense.
Year Ended December 31,
(dollars in thousands)202220212020
Acquisition related
Common Units issued in connection with the Business Combination$— $1,121,139 $— 
Seller Earnout Units issued in connection with the Business Combination— 63,031 — 
Oak Street Earnout Units245,987 — — 
Wellfleet Earnout Shares2,468 — — 
Total acquisition related248,455 1,184,170 — 
Incentive Units137,129 14,535 — 
RSUs35,248 6,631 — 
Equity-Based Compensation Expense$420,832 $1,205,336 $— 
Corresponding tax benefit$588 $123 $— 
Fair value of RSUs settled in Class A Shares$4,096 $— $— 
Fair value of RSUs withheld to satisfy tax withholding obligations$2,420 $— $— 
The table below presents activity related to the Company’s unvested equity-based compensation awards for the year ended December 31, 2022.
Incentive UnitsRSUsOak Street Earnout UnitsWellfleet Earnout Shares
Number of UnitsWeighted-Average Grant Date Fair Value Per UnitNumber of UnitsWeighted-Average Grant Date Fair Value Per UnitNumber of UnitsWeighted-Average Grant Date Fair Value Per UnitNumber of SharesWeighted Average Grant Date Fair Value Per Share
December 31, 202123,080,845 $13.87 10,118,104 $13.84 26,074,330 $12.53 — $— 
Granted7,641,586 9.93 6,363,189 10.43 — — 862,275 11.44 
Vested(5,433,761)10.30 (357,196)14.17 — — — — 
Forfeited(127,058)12.69 (577,291)13.82 — — — — 
December 31, 202225,161,612 $13.45 15,546,806 $12.44 26,074,330 $12.53 862,275 $11.44 
Common Units
Prior to the Business Combination, certain members of Dyal Capital were entitled to receive rights to distributions of certain future profits (the “Profit Interest Units”) that were subject to certain forfeiture conditions. Immediately preceding the Business Combination, the forfeiture conditions of the Profit Interest Units were modified to eliminate any future service requirements and were replaced with Common Units on the Business Combination Date. The Company recognized a one-time non-cash equity-based compensation expense of $1.1 billion in 2021 related to the replacement awards, which represents the fair value under GAAP of the replacement awards (excluding the portion attributable to the Profit Interest Units prior to the Business Combination, which was included as equity consideration in Note 3). The fair value of the Common Units replacement awards during 2021 was based on the Company’s Class A Share price on the transaction date with the application of a 10% discount for lack of marketability. The weighted-average grant date fair value of Common Units granted during the year ended December 31, 2021 was $9.00.
Seller Earnout Units
The fair value of the Seller Earnout Units during 2021 was determined using a Monte Carlo simulation valuation model, with the following assumptions: volatility of 22%, discount for lack of marketability of 12% and expected holding period of approximately 3 years. The weighted-average grant date fair value of Seller Earnout Units granted during the year ended December 31, 2021 was $5.43. As a result of the Class E Triggering Events in 2021, the Company recognized all of the compensation expense related to the Seller Earnout Units and no unamortized expense remained as of December 31, 2021.
Incentive Units
The grant date fair value of Incentive Units was determined using the Company’s Class A Share price on the grant date, adjusted for the lack of dividend participation during the vesting period, and the application of a discount ranging from 13% - 18% during 2022 and 11% - 12% during 2021 for lack of marketability on certain Incentive Units that are subject to a one-year post-vesting transfer restriction. The weighted-average grant date fair value of Incentive Units granted during the year ended December 31, 2021 was $13.87. As of December 31, 2022, unamortized expense related to Incentive Units was $255.9 million, with a weighted-average amortization period of 3.7 years.
RSUs
RSUs Modified from Liability Award on Business Combination Date
On September 15, 2020, the Company issued an award that was based on the fair value of Owl Rock and that was fully vested upon issuance. The original terms of the award required cash settlement at a future date and was, therefore, classified as a liability that was remeasured to its settlement value at each reporting period. The Company recorded compensation expense and a corresponding liability of $90.5 million in 2020 related to the award. Prior to and contingent on the close of the Business Combination, the Company modified this award to be settled in 9,050,000 RSUs that were immediately vested but would be settled in Class A Shares in future years. The modification did not result in any incremental compensation expense, as the value immediately prior to modification was greater than the value immediately following the modification. Accordingly, the Company reclassified the existing liability to equity on the Business Combination Date.
Other RSUs
The grant date fair value of other RSUs was determined using the Company’s Class A Share price on the grant date, adjusted for the lack of dividend participation during the vesting period, and as applicable a discount ranging from 13% - 14% during 2022 and 11% - 12% during 2021 for lack of marketability on RSUs that are subject to a one-year post-vesting transfer restriction. The weighted-average grant date fair value of other RSUs granted during the year ended December 31, 2021 was $13.92. As of December 31, 2022, unamortized expense related to RSUs was $126.6 million, with a weighted-average amortization period of 3.0 years.
Oak Street Earnout Units
The grant date fair value of the Oak Street Earnout Units was determined using a Monte Carlo simulation valuation model, with the following weighted average assumptions: annualized revenue volatility of 38%, revenue discount rate of 15%, discount for lack of marketability of 13% and expected holding period of approximately 2.0 years. The weighted-average grant date fair value of Oak Street Earnout Units granted during the year ended December 31, 2021 was $12.53. As of December 31, 2022, unamortized expense related to the Oak Street Earnout Units was $80.6 million, with a weighted average amortization period of 1.0 year. In January 2023, the Oak Street Triggering Event occurred with respect to the First Oak Street Earnout.
Wellfleet Earnout Shares
The grant date fair value of the Wellfleet Earnout Shares treated as compensation was determined using the Company’s Class A Share price on the grant date, adjusted for the lack of dividend participation during the vesting period. As of December 31, 2022, unamortized expense related to the Wellfleet Earnout Shares was $7.4 million, with a weighted-average amortization period of 2.3 years.