Deferred Compensation and Retirement Plans

9 Months Ended

Jan. 31, 2023

Retirement Benefits [Abstract]

Deferred Compensation and Retirement Plans

Deferred Compensation and Retirement Plans

The Company has several deferred compensation and retirement plans for eligible consultants and vice presidents that provide defined benefits to participants based on the deferral of current compensation or contributions made by the Company subject to vesting and retirement or termination provisions. Among these plans is a defined benefit pension plan for certain employees in the U.S. The assets of this plan are held separately from the assets of the sponsor in self-administered funds. All other defined benefit obligations from other plans are unfunded.

The components of net periodic benefit costs are as follows:

	Three Months Ended January 31,				Nine Months Ended January 31,
	2023		2022		2023		2022
	(in thousands)
Service cost	$	10,573	$	9,762	$	30,200	$	28,190
Interest cost	2,439		1,038		7,263		3,095
Amortization of actuarial loss	218		537		654		1,622
Expected return on plan assets (1)	(289)		(387)		(867)		(1,160)
Net periodic service credit amortization	(101)		(101)		(304)		(304)
Net periodic benefit costs (2)	$	12,840	$	10,849	$	36,946	$	31,443

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(1) The expected long-term rate of return on plan assets was 5.50% and 6.00% for January 31, 2023 and 2022, respectively.

(2) The service cost, interest cost and the other components of net periodic benefit costs are included in compensation and benefits expense, interest expense, net and other income (loss), net, respectively, on the consolidated statements of income.

The Company purchased COLI contracts insuring the lives of certain employees eligible to participate in the deferred compensation and pension plans as a means of setting aside funds to cover such plans. The gross CSV of these contracts of $276.2 million and $263.2 million as of January 31, 2023 and April 30, 2022, respectively, was offset by outstanding policy loans of $77.6 million and $79.8 million in the accompanying consolidated balance sheets as of January 31, 2023 and April 30, 2022, respectively. The CSV value of the underlying COLI investments increased by $2.5 million and $7.4 million during the three and nine months ended January 31, 2023, respectively, and was recorded as a decrease in compensation

and benefits expense in the accompanying consolidated statements of income. The CSV value of the underlying COLI investment increased by $1.7 million and $3.9 million during the three and nine months ended January 31, 2022, respectively, and was recorded as a decrease in compensation and benefits expense in the accompanying consolidated statements of income.

The Company’s ECAP is intended to provide certain employees an opportunity to defer their salary and/or bonus on a pre-tax basis. In addition, the Company, as part of its compensation philosophy, makes discretionary contributions into the ECAP and such contributions may be granted to key employees annually based on the employee’s performance. Certain key management may also receive Company ECAP contributions upon commencement of employment. The Company amortizes these contributions on a straight-line basis over the service period, generally a five year period. Participants have the ability to allocate their deferrals among a number of investment options and may receive their benefits at termination, retirement or ‘in service’ either in a lump sum or in quarterly installments over one-to-15 years. The ECAP amounts that are expected to be paid to employees over the next 12 months are classified as a current liability included in compensation and benefits payable on the accompanying consolidated balance sheets.

The ECAP is accounted for whereby the changes in the fair value of the vested amounts owed to the participants are adjusted with a corresponding charge (or credit) to compensation and benefits costs. During the three and nine months ended January 31, 2023, deferred compensation liability increased; therefore, the Company recognized compensation expense of $12.1 million and $3.5 million, respectively. Offsetting the increases in compensation and benefits expense was an increase in the fair value of marketable securities (held in trust to satisfy obligations of the ECAP liabilities) of $12.7 million and $3.0 million during the three and nine months ended January 31, 2023, recorded in other income (loss), net on the consolidated statements of income. During the three months ended January 31, 2022, deferred compensation liability decreased; therefore, the Company recognized a reduction in compensation expense of $7.0 million. Offsetting the decrease in compensation and benefits expense was a decrease in the fair value of marketable securities (held in trust to satisfy obligations of the ECAP liabilities) of $7.7 million during the three months ended January 31, 2022, recorded in other income (loss), net on the consolidated statements of income. During the nine months ended January 31, 2022, deferred compensation liability increased; therefore, the Company recognized compensation expense of $3.1 million. Offsetting the increase in compensation and benefits expense was an increase in the fair value of marketable securities (held in trust to satisfy obligations of the ECAP liabilities) of $2.4 million during the nine months ended January 31, 2022, recorded in other income (loss), net on the consolidated statements of income. (see Note 5—Financial Instruments).