☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
2021
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Title of Each Class | Trading Symbol(s) | Name of Each Exchange on Which Registered | ||
Class A Common Stock, $0.01 par value | NMRK | The NASDAQ Stock Market LLC |
☐
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of RegulationS-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of thisForm 10-K or any amendment to this Form10-K. ☒
Large accelerated filer | Accelerated filer | ☐ | ||||
Non-accelerated filer | Smaller reporting company | ☐ | ||||
Emerging growth company | ☐ |
As
was approximately $1.9 billion.
Class | Outstanding at April | 25, 2022 | ||
Class A Common Stock, par value $0.01 per share | 164,678,443 shares | |||
Class B Common Stock, par value $0.01 per share | 21,285,533 shares |
Auditor Name: Ernst & Young, LLP | Auditor Location: New York, New York | PCAOB ID Number: 42 |
2017
Page | ||||||
PART III | 4 | |||||
ITEM 10. | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE | |||||
ITEM 11. | EXECUTIVE COMPENSATION | |||||
ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS | |||||
ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE | |||||
ITEM 14. | PRINCIPAL ACCOUNTANT FEES AND SERVICES | |||||
ITEM 15. | EXHIBITS AND FINANCIAL STATEMENT SCHEDULES |
ITEM 10. | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE |
Name | Age | Director Since | Biographies | |||
Howard W. Lutnick | 56 | 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 and Chief Executive Officer of BGC Partners, Inc. (“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 Chief Executive Officer of Cantor since 1992 and as Chairman 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’s company, CF Group Management, Inc. (“CFGM”), is the managing general partner of Cantor. Mr. Lutnick is a member of the Board of Directors of the Fisher Center for Alzheimer’s Research Foundation at Rockefeller University, the Board of Directors of the Horace Mann School, the Board of Directors of the National September 11 Memorial & Museum and the Board of Directors of the Partnership for New York City. Mr. Lutnick served as Chairman of the Board of Directors of GFI Group Inc. (“GFI”) from February 26, 2015 through the closing of BGC’s merger with GFI in January 2016. | |||
John H. Dalton | 76 | 2017 | Mr. Dalton has been a director of our Company since December 2017. Mr. Dalton served as a director of BGC Partners from February 2002 to December 2017. From January 2005 to June 2017, Mr. Dalton served as the President of the Housing Policy Council of the Financial Services Roundtable, a trade association composed of large financial services companies. Mr. Dalton was President of IPG Photonics Corp., a company that designs, develops and manufactures a range of advanced amplifiers and lasers for the telecom and industrial markets, from September 2000 to December 2004. Mr. Dalton served as Secretary of the Navy from July 1993 to November 1998. He also serves on the Boards of Directors of Fresh Del Monte Produce, Inc., a producer and marketer of fresh produce, and Crius Technology Group LLC, a privately-held wireless communication company focused on energy management and controls, security and data acquisition. |
Name Age Director Since Biographies Michael Snow 70 2017 Mr. Snow has been a director of our Company since December 2017. Mr. Snow is the Managing Member and Chief Investment Officer of Snow Fund One, LLC founded in October 2005. 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 Member of the Board of Directors of BGC Derivative Markets, L.P., a subsidiary of BGC Partners, a leading global brokerage company servicing the financial and real estate markets and, since March 2014, he has served as an independent director of Remate Lince, S.A.P.I. de C.V., a BGC affiliate in Mexico. BGC Derivative Markets, L.P. launched 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. Mr. Snow also previously served as an independent public director of ELX Futures, L.P. from December 2007 until February 2015, and as a member of the board of directors, audit and compensation committees of GFI from February 2015 to February 2016.
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). |
James R. Ficarro, 57, has served as our Chief Operating Officer since March 2015. Mr. Ficarro is responsible for overseeing the growth and coordination of all our business lines. Mr. Ficarro also provides services to various other affiliates of Cantor and our operating partnerships and subsidiaries. Previously, Mr. Ficarro worked at Cantor and its affiliates for more than 22 years, overseeing all tax and financial planning functions. He served as executive managing director and global tax director of Cantor, as well as chief financial officer and chief administrative officer of BGC Real Estate. As head of financial planning and administration, he was integral in establishing processes and procedures, and creating efficiencies and productivity enhancements for Cantor’s and BGC Partners’ back office functions and departments. Prior to joining Cantor, Mr. Ficarro worked in public accounting at Coopers & Lybrand, Kenneth Leventhal & Company and Arthur Andersen. Mr. Ficarro is a New York State Certified Public Accountant (inactive).
In evaluating Ms. Bauer’s independence, the Board took into consideration her service on the Board of Directors of the National September 11 Memorial & Museum since 2008, an organization where Mr. Lutnick also is a member of the Board of Directors, as well as the fact that Ms. Bauer’s husband was employed by an affiliate of Cantor and subsequent to his death on September 11, 2001, her family received the payments and health care coverage distributed to all affected victims from the Cantor Fitzgerald Relief Fund. In evaluating Mr. McIntyre’s independence, the Board took into consideration his service as an independent director at a public company for which the Company provides an immaterial amount of ordinary course real estate services.
time. Our Audit Committee consistsconsisted of Ms. Bauer and Messrs. DaltonPeter F. Cervinka, Snow, and Snow.McIntyre with Mr. Dalton servesCervinka serving as chairmanChair of the Committee.Committee during the year ended December 31, 2020 and until April 29, 2021. Effective as of the close of business on April 29, 2021, Mr. Cervinka resigned from the Board and Mr. Snow became Chair of the Committee as of that date. Each member of the Committee qualifies as “independent” in accordance with the published listing requirements of Nasdaq and under special standards established by the SEC for members of audit committees, and the Committee includes at least one member who is determined by our Board to meet the qualifications of an “audit committee financial expert” in accordance with the SEC rules. Our Board has determined that each of Ms. Bauer and Messrs. DaltonSnow and SnowMcIntyre meets the qualifications of an “audit committee financial expert.” PursuantThe Committee operates pursuant to an Audit Committee Charter, which is available at
2021.
officers and for administering the Newmark Holdings, L.P. Participation Plan, which we refer to as the “Participation Plan,” our Long-Term Incentive Plan, which we refer to as the “Equity Plan” and our Incentive Bonus Compensation Plan, which we refer to as our “Incentive Plan.” The Committee operates pursuant to a Compensation Committee Charter, which is available athttp://ir.ngkf.com/disclaimer-and-legal-information/default.aspx
Nominating Process
2021, which included meetings with independent advisors for the Compensation Committee in contemplation of the December 2021 one-time bonus award to Mr. Lutnick described below under the heading “2021 Lutnick Award.”
Our
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 | |||||||
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 |
director for the same reason.
attendance.
Management
• 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 | — |
report his acquisition of shares of Class A common stock from the Company on March 16, 2021 and his disposition of such shares to the Company on that same day and (ii) Mr. Lutnick filed a one-day late Form 4 on July 1, 2021 to report (a) the exchange of exchangeable Newmark Holdings units into Class A common stock, (b) the grant of Class A common stock following the redemption of non-exchangeable Newmark Holdings units and (c) the grant of Class A common stock on June 28, 2021.
website.
Our whistleblower policy is publicly available on our website at www.nmrk.com/esg/governance under the heading “Whistleblower Complaint and Investigation Procedures for Accounting, Internal Controls, Auditing Matters and Employment and Labor Practices.” Information available on our website is not incorporated herein by reference.
ITEM 11. | EXECUTIVE COMPENSATION |
Restructuring
For more information on our IPO and transactions and agreements related to the Separation and the IPO, see “Certain Relationships and Related Transactions, and Director Independence—Separation, Initial Public Offering, and Spin-Off.”
us or our subsidiaries. For more information on our IPO, our structure after the IPO and transactions and agreements related to the IPO, the separation and the distribution,Spin-Off, see “Item 13—Certain Relationships and Related Transactions, and Director Independence—Underwriting Agreement and IPO” and “Item 13—Certain“Certain Relationships and Related Transactions, and Director Independence—Separation, Initial Public Offering, and Distribution Agreement.Spin-Off—the Spin-Off.”
Prior tointerest. This 0.454545 figure was based on what the distribution exchanges and repurchases of exchangeable limited partnership interests in BGC Holdings or Newmark Holdings will be governed byratio would have been had the terms ofSpin-Off occurred immediately following the separation and distribution agreement, the BGC Holdings limited partnership agreement and the Newmark Holdings limited partnership agreement. For more information on the mechanics of such exchanges and repurchases, see “Item 13—Certain Relationships and Related Transactions, and Director Independence—Amended and Restated Newmark Holdings Limited Partnership Agreement—Exchanges” and “Item 13—Certain Relationships and Related Transactions, and Director Independence—Use of Reinvestment Cash—Reinvestments in Newmark OpCo by BGC.”
IPO.
In 2017, Messrs. Lutnickfor all executive officers.
Please refer to the BGC Partners’ most recent annual report, proxy statement and other reports on file with the SEC for additional information regarding Mr. Lutnick’s total compensation payable by BGC Partners, which includes the amounts paid in respect of Mr. Lutnick’s approximate time spent on Newmark matters as described herein.
heading “2021 Lutnick Award.”
long-term.
transactions, as applicable, meeting established goals for operating earnings, earnings per share and increasing the total return for stockholders, including stock price and/or dividend increases, and maintaining and developing customer relationships and long-term competitive advantage. Such objectives may also include the ability to respond to extraordinary events and manage the business under changing health, environmental, microeconomic and financial circumstances.
Our
directors and not by our Compensation Committee.
We may also issue potential extraordinary grants to executive officers which may or may not be based on prior results or other performance measures, including stock price increase or other measures to be specified.
paid at any other companies, does not apply any specific measures of internal or external pay equity in reaching its conclusions, and does not employ tally sheets, wealth accumulation, or similar tools in its analysis. The Committee considered whether the AdvisorCompensation Advisors had any conflicts of interest in advising the Committee. The Committee considered whether the AdvisorCompensation Advisors had been providing services of any other nature to the Company; the amount of fees received from the Company by the Advisor;Compensation Advisors; the policies and procedures adopted by the AdvisorCompensation Advisors that have been designed to prevent conflicts of interest; whether any business or personal relationships existed between the consultants employed by the AdvisorCompensation Advisors who worked on Company matters and any member of the Committee; whether any business or personal relationship existed between such consultants and any of our executive officers; and whether the AdvisorCompensation Advisors or such consultants hold any of our Class A common stock. The AdvisorCompensation Advisors also providesprovide services to the compensation committee of the board of directors of BGC Partners from time to time. Upon evaluating such considerations, the Committee found no conflicts of interest in either of the AdvisorCompensation Advisors advising the Committee.
with our overall goal of enhancing long-term stockholder value. In particular, the Committee considers those risks identified in our risk factors and the known trends and uncertainties identified in our management discussion and analysis, and considers how our executive compensation program serves to achieve its operating, financial and other strategic objectives while at the same time mitigating any incentives for executive officers to engage in excessive risk-taking to achieve short-term results that may not be sustainable in the long term.
long-term. Our Committee may also consider specific performance measures or grants based on specific events or particular strategic efforts or transactions.
Separation. The Committee may consider RSUs and options, as well as partnership units and other forms of compensation, in future grants.
HDUs have a stated capital account and are valued based upon such capital account which is initially based on the closing trading price of Class A common stock at the time the HDU right is granted. HDUs participate in quarterly partnership distributions and are not exchangeable into shares of Class A common stock unless such exchange rights are granted by the Committee.
diluted share count. The ratio of the grant of PPSUs to traditional units (i.e.(e.g., PSUs) is expected to approximate the compensatory tax rate applicable in the relevant country jurisdiction of the partner recipient. The determination price used to exchange PPSUs for cash is determined by the Compensation Committee on the date the grant of such unit and is based on a closing trading price of Class A common stock identified by the Committee on such date.
While we not have a general compensation recovery or “clawback” policy, and do not require our executive officers to meet general share ownership or hold-through-retirement requirements, our Compensation Committee believes that the extremely retentive nature of the NPSUs, PSUs and similar partnership units, which may be redeemed for zero at any time by the Committee, provides extraordinary discretion and superior clawback power to the Committee.
We generally intend that compensation paid to our Chairman and our other named executive officers not be subject to the limitation on tax deductibility under
BGC and Newmark Equity Plans and Participation Plans
In connection with our IPO in December 2017, we established the Equity Plan and the Incentive Plan, under which the Compensation Committee of our Board of Directors may pay compensation in the form of cash, shares of our common stock or other equity-based awards, to our directors, executive officers or other officers or employees. We also maintain the Participation Plan, under which the Committee may award Newmark Holdings interests to our directors, executive officers or other officers or employees. Prior to the IPO, our executive officers received awards under the BGC Compensation Plans.
As discussed in more detail above,
Base Salaries/Payments for 2017
2021
represents 50% of his base salary as reported by BGC Partners. The base rate for 2017 for Mr. Gosin was continued at $475,000, payable 50% in cash and 50% in partnership units but was raised to $1,000,000 for the portion of 2017 beginning with the execution of his new employment agreement in connection with the IPO, payable in cash. The 50% portion of Mr. Gosin’spre-IPO salary paid in partnership units was calculated on a monthly basis by dividing 50% of his monthly base salary by the closing price of our Class A common stock on the last day of the month in which the cash portion of his salary is paid. The base rate for Mr. Ficarro for 2017 was continued at $540,000. As discussed above, Mr. Ficarro spent approximately 90% of his full business time in 2017 on Newmark matters. The base rate for Mr. Rispoli for 2017 was increased to $415,000 for 2017.
Base Salaries/Payments for 2018
Base salary and similar cash payment rates for 20182021 were established in March 20182021 by our Compensation Committee with respect to each of our executive officers, based on their continuing qualifications, experience and responsibilities. For 2017 and until March 1, 2018, Mr. Lutnick’s base salary was $500,000, which represents 50% of his base salary as reported by BGC Partners. Effective on March 1, 2018, the base rate for 2018 for Mr. Lutnick was increased to $1,000,000 by Newmark, representing 50% of his salary from BGC Partners. Mr. Lutnick’s salary increase, effective March 1, 2018, was approved by the Compensation Committees of both Newmark and BGC Partners.
The base rate for 20182021 was continued at $1,000,000 for Mr.Messrs. Lutnick and Gosin. The base rate for Mr. Rispoli for 2021 was increased to $750,000 effective April 1, 2021, and the base rate for Mr. Merkel for 2021 was continued at $500,000. Mr. Rispoli’s $50,000 base salary increase was awarded due to his increased responsibilities in connection with strategic transactions and his leadership during the COVID-19 pandemic.
COVID-19 pandemic.
We believe that compensation should vary with corporate and individual performance and that a significant portion
Incentive Plan. The Compensation Committee believes that such performance-based compensation appropriately aligns the interests of our executive officers with the interests of our stockholders.
measures:
BGC
Prior to our IPO in December of 2017, we did not have an incentive plan. As such, during 2017 Mr. Lutnick was a participating executive in the BGC Incentive Plan, and salaries for 2017 for Messrs. Gosin, Ficarro and Rispoli were approved by Mr. Lutnick. Due to the IPO closing on December 19, 2017, the Newmark Compensation Committee did not set any incentive bonus targets for 2017.
2021
in each case subject to any appropriate corporate adjustment to reflect stock splits, reverse stock splits, mergers, spin-offs or any other extraordinary corporate transactions in accordance with the Bonus Plan, the Incentive Plan and the Participation Plan, as applicable.
BGC
2021
Mr. Gosin receivedone-time grants during both 2014 and 2015 which were intended to provide him with significant incentives with respect toCommittee’s discretion, thus incentivizing future performance and were given as an advance against future incentive pool allocation payments and in consideration for Mr. Gosin’s leadership inby aligning it with the substantial expansion of Newmark Knight Frank since being acquired by BGC. As such, Mr. Gosin did not receive a BGC Incentive Plan Bonus for 2017.
Company’s stock price.
In approving
Compensation for Mr. Gosin is generally determined in accordance with the employment agreement, as amended from time to time, which he entered into in connection with our IPO, effective as of December 1, 2017 (the “Gosin Employment Agreement”). Mr. Gosin continued to contribute to the business in 2017, including his leadership in connection withfinance, acquisitions and participationtreasury matters in our IPO. However, awarding his bonus for the year.
Mr. Gosin received commissions in 2017 in the amount of $437,102 payable in connection with brokerage transactions. This amount$1,000,000 was paid $500,000 in the form of 33,509current cash compensation and $500,000 in a long-term partnership award represented by 16,255 non-exchangeable BGC Newmark Holdings PSUs and 4,19316,255 non-exchangeable BGC Newmark Holdings APSUs.
PPSUs with a determination price of $15.38 per unit. The Compensation Committee noted his legal and regulatory guidance during the year.
In the first quarter of 2018,2022
Our Compensation Committee has also established special quarterly award opportunities under our Equity Plan for the grant of exchange rights and/or cash settlement awards under the Equity Plan relating to outstandingnon-exchangeable limited partnership units awarded under the Participation Plan. The Committee established specified performance goals for the quarter similar to the annual opportunities under the Incentive Plan. In each case, such quarterly award opportunities are subject to the Committee’s determination of whether such goals have been met and the Committee’s exercise of negative discretion.
NPSU Grants and Related
Previous BGC Partners Grants
During eachtime, the Compensation Committee generally approves monetization of 2015, 2016previously issued and 2017,outstanding units and shares in order to provide liquidity to the BGC compensation committee made additional discretionary awards of BGC Holdings NPSUs to Mr. Lutnick. The equity compensation discussed below reflects only those amounts BGC attributed to Mr. Lutnick’s services performed for Newmarkexecutives in accordance with applicable tax and excludesaccounting rules, taking into consideration the amounts attributable to his services performed on matters for BGC Partners and its affiliates (other than us), and represents a percentage (i.e., 50%)retentive impact of the total amount awardedremaining units held by BGCthe executives. The 2021 monetizations described below were approved by the Compensation Committee in connectionorder to provide liquidity to the executives in accordance with applicable tax and accounting rules, taking into consideration the performanceretentive impact of his duties during those times.
The BGC compensation committee granted the following BGC Holdings NPSUs to remaining units held by the executives.
respect to this event.
2015Year-End Compensation. On February 24, 2016, in connection withExchange Right Grants Related to the 2015year-end compensation process,2021 Equity Event” for a description of the BGC compensation committeeexchange rights and/or other monetizations rights granted 750,000 BGC Holdings NPSUs to Mr. Lutnick. Replacement of BGC Holdings NPSUs withnon-exchangeable BGC Holdings PSUs/PPSUs for Mr. Lutnick was determined to be (i) 25% per yearhim with respect to BGCthis event.
2016Year-End Compensation.exchange rights and/or other monetizations rights granted to him with respect to 2020 and waived one time by him with such future opportunities to be cumulative.
In January 2017, the requirement NHLP PPSUs in replacement of further approval of the BGC compensation committee to replace Mr. Lutnick’s BGC125,000 Newmark Holdings NPSUs was amended and changed into the requirement125,000 Newmark Holdings NPPSUs (which, upon replacement, shall be cancelled and no longer exist), provided that BGC,(i) Newmark, inclusive of its affiliates thereof, earn,earns, in aggregate, at least $5USD 5 million in gross revenues in the calendar quarter in which the applicable award ofnon-exchangeable BGC Newmark Holdings PSUs/PSUs or PPSUs is to be granted and such executive remaining(ii) except in the event of death prior to the applicable grant date, Mr. Lutnick remains an employee of Newmark or member of an affiliate of BGCthereof and having compliedhas at all times remained in compliance with the Newmark Holdings partnership agreement. Mr. Lutnick exercised his applicable employment or membership agreementrights on December 21, 2021 pursuant to the standing policy for Mr. Lutnick to redeem his remaining 250,000 Newmark Holdings NPPSUs issued effective April 1, 2019. Pursuant to this grant, on April 1, 2022, the Company granted Mr. Lutnick an aggregate award of 125,000 non-exchangeable PSUs in replacement of 125,000 NPSUs.
With respectNewmark Holdings’ partners who are independent contractors were redeemed or exchanged. Newmark also accelerated the payment of related withholding taxes to all of such awards, any grant of exchange rightsthem with respect to any of Mr. Lutnick’stheir Newmark Holdings units. Independent contractors received one BGC Class A common share for each redeemed non-preferred BGC Holdings PSUs/PPSUs issuedunit or cash and are responsible for paying any related withholding taxes.
As of March 31, 2018, Mr. Lutnick had no BGC Holdings NPSUs outstanding attributable to his Newmark compensation.
Replacement and Exchange Right Grants
Mr. Gosin
In December of 2017,cash were also redeemed in connection with the execution2021 Equity Event.
Due to theone-time grants Mr. Gosin previously received, noted above, Mr. Gosin was not granted additional exchangeability on previously awarded unitsCompensation Committee, in connection with the 2017year-end compensation process.
On March 12, 2018,2021 Equity Event, with respect to Newmark’s executive officers are set forth below. All of the Compensation Committee authorizedtransactions included in the Company2021 Equity Event with respect to redeemMessrs. Lutnick, Gosin and cancel 642,261non-exchangeableRispoli, were based on (i) the price for Newmark Holdings PSUs and to issue to Mr. Gosin in exchange $10.0 million of Newmark’s Class A common stock less applicable taxes and withholdings, based on the price of $15.57$12.50 per share, which wasas approved by the closing price of our Class A common stock on that date. This resulted inCompensation Committee; (ii) the issuance to Mr. Gosin of 327,746 shares of our Class A common stock.
Mr. Rispoli
On April 2, 2018, certain of Mr. Rispoli’s awards were replaced by an equivalent number of exchangeable awards as follows: (i) 17,211non-exchangeable BGC Holdings PSUs, and (ii) 14,082non-exchangeable BGC Holdings PPSUs, of which 9,381 BGC Holdings PPSUs have a determination price of $9.07 per unit and 4,701 BGC Holdings PPSUs have a determination price of $11.40 per unit. Mr. Rispoli has not elected to exchange such exchangeable units. As described herein, any exchange of such units shall also apply to the ratable portion of Newmark units that Mr. Rispoli held in association with such BGC Holdings units.
Mr. Ficarro
On April 1, 2016 and April 1, 2017, an additional 20,454 of Mr. Ficarro’s BGC Holdings NPSUs and 16,736 of his BGC Holdings NPPSUs awarded in 2014 were replaced by an equivalent number ofnon-exchangeable BGC Holdings PSUs and BGC Holdings PPSUs, respectively. The distributions from suchnon-exchangeable BGC Holdings PSUs and BGC Holdings PPSUs will be payable to Mr. Ficarro and will not be used to repay his outstanding loan (as described below). On May 2, 2016, an additional 7,177 of hisnon-exchangeable BGC Holdings PSUs and 4,765 of his BGC Holdings PPSUs were replaced by an equivalent number of exchangeable BGC Holdings PSUs and BGC Holdings PPSUs. On March 21, 2017, an additional 15,586 of hisnon-exchangeable BGC Holdings PSUs and 12,752 of his BGC Holdings PPSUs were replaced by an equivalent number of exchangeable BGC Holdings PSUs and BGC Holdings PPSUs. On April 24, 2017, an additional 12,373 of hisnon-exchangeable BGC Holdings PSUs and 10,123 of his BGC Holdings PPSUs were replaced by an equivalent number of exchangeable BGC Holdings PSUs and BGC Holdings PPSUs.
On April 2, 2018, certain of Mr. Ficarro’s awards were replaced by an equivalent number of exchangeable awards as follows: (i) 35,384non-exchangeable BGC Holdings PSUs, of which 90%, or 31,846non-exchangeable BGC Holdings PSUs were for his work on Newmark matters, and (ii) 28,015non-exchangeable BGC Holdings PPSUs, of which 90%, or 25,213non-exchangeable BGC Holdings PSUs were for his work on Newmark matters. With respect to the BGC Holdings PPSUs, 10,222 of the total BGC Holdings PPSUs have a determination price of $6.05 per unit and 17,993 of the total BGC Holdings PPSUs have a determination price of $11.40 per unit, 90% of such amounts are 9,200 BGC Holdings PPSUs and 16,140 BGC Holdings PPSUs, respectively. Mr. Ficarro has not elected to exchange such exchangeable units. In addition, Mr. Ficarro also has 22,728 BGC Holdings NPSUs and 18,595 BGC Holdings NPPSUs (which have a preferred value of $112,500) that were awarded in 2015 and vested into BGC Holdings PSUs and BGC Holdings PPSUs as of April 1, 2018. As described herein, any exchange or vesting of such units shall also apply to the ratable portion of Newmark Holdings units that Mr. Ficarro held in association with such BGC Holdings units.
As of April 2, 2018, Mr. Ficarro did not have any BGC Holdings NPSUs or any BGC Holdings NPPSUs outstanding.
On November 17, 2017, BGC Partners redeemed for cash (i) 66,393 exchangeable BGC Holdings PSUs held by Mr. Ficarro at a price of $15.68 per BGC Holdings PSU, which was the closing price of BGC Partners Class A common stock on such date,of $5.86; and (iii) the price of Nasdaq common stock of $177.11.
(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. |
2017 Newmark Awards
Our Compensation Committee did not make any awards of NPSUsClass A Common Stock on the open market with his net after-tax proceeds with respect to our executive officers in 2017.
2018 Newmark Awards
As of the date hereof, our Compensation Committee has not made any awards of NPSUs to our executive officers in 2018.
this payment.
Newmark
BGC
In December 2010, as amended in 2013, for a cash payment of $1,954,728, and as further amended in 2017,127,799 non-exchangeable Newmark Holdings NPPSUs for a cash payment of $1,284,376, both for which he previously waived, but then accepted, his right under the BGC audit committee and the BGC compensation committee approved aCompany’s standing policy substantiallyfor Mr. Lutnick; and (ii) received the right to monetize, and accepted the monetization of, his remaining 122,201 non-exchangeable Newmark Holdings NPPSUs for a cash payment of $1,228,124, under such standing policy. In connection with the foregoing, Mr. Lutnick accepted the right to monetize approximately $4,406,915 by way of the Company causing 286,511 of Mr. Lutnick’s non-exchangeable Newmark Holdings PSUs to be redeemed for zero and issuing 267,572 shares of Newmark Class A common stock, based upon the closing price of our Class A common stock on the same terms asdate the Committee approved the transaction (which was $16.47) and a 0.9339 exchange ratio, under the Company’s standing policy approved by our Compensation Committee described above, that gives Mr. Lutnick the same right, subject to certain conditions, to accept or waive opportunities that have previously been offered, or that may be offered in the future, to other BGC executive officers to participate in any opportunity to monetize or otherwise provide liquidity with respect to some or all of theirnon-exchangeable limited partnership units or to accelerate the lapse of or eliminate any restrictions on transferability with respect to shares of restricted stock.
On January 31, 2017, under the BGC standing policy, the BGC compensation committee granted exchange rights with respect to rights availableapplying to Mr. Lutnick, with respectsuch acceptance of rights granted in reference to some of hisnon-exchangeable BGC Holdings PSUs/PPSUs.Mr. Gosin’s December 2021 transactions to the extent necessary to effectuate the foregoing (and otherwise Mr. Lutnick elected to waive suchwaived all remaining rights as aone-time, waiver that is not cumulative. Also pursuant to the policy, the BGC compensation committee further approved a grant to Mr. Lutnick of 325,000non-exchangeable BGC Holdings PSUs, of which 162,500non-exchangeable BGC Holdings PSUs, or 50%, were attributable to his approximate time spent on Newmark matters, in replacement of 325,000 of his BGC Holdings NPSUs, of which 162,500 BGC Holdings NPSUs, or 50%, were attributable to his approximate time spent on Newmark matters, and a grant of 1,661,600non-exchangeable BGC Holdings PSUs, of which 830,800non-exchangeable BGC Holdings PSUs, or 50%, were attributable to his approximate time spent on Newmark matters, in replacement of his 1,661,600non-exchangeable BGC Holdings PPSUs, of which 830,800 BGC Holdings PPSUs, or 50%, were attributable to his approximate time spent on Newmark matters, for an aggregate total of 1,986,600non-exchangeable BGC Holdings PSUs, of which 993,300 BGC Holdings PSUs, or 50%, were attributable to his approximate time spent on Newmark matters. Such transactions were effective as of January 1, 2017 and represented all of the rights available to Mr. Lutnick at such time.
In addition, on February 16, 2018, under the BGC standing policy, the BGC compensation committee granted exchange rights with respect to rights available to Mr. Lutnick with respect to all of his of hisnon-exchangeable BGC Holdings PSUs/PPSUs (other than those issued in connection with 2017year-end compensation). Mr. Lutnick elected to waive such rights as aone-time waiver with future opportunities to exchange to be cumulative. In addition, under the BGC standing policy, allcumulative).
Employee Loans
For 2015, Mr. Ficarro was provided a loan in the amountto other contractual modifications sought by us. As part of $326,250 (representing the portion of such award attributablethese programs, we may also redeem limited partnership interests for cash and/or other units and grant exchangeability to his approximate time spent on Newmark matters), pursuant to which the actual amount of the loan when issued was $228,707, which is the result of $326,250 (the nominal gross amount) less $97,543 held in reserve for payment of tax liabilities. This loan was forgiven in October 2017.
For 2015, Mr. Rispoli was provided a loan in the amount of $192,500, pursuant to which the actual amount of the loan when issued was $118,893, which is the result of $192,500 (the nominal gross amount) less $73,607 held in reserve for payment of tax liabilities. This loan was forgiven in October 2017.
certain units.
$113,061.
THE COMPENSATION COMMITTEE |
Virginia S. Bauer, Chair |
Michael Snow |
Kenneth A. McIntyre |
(a) Name and Principal Position | (b) Year | (c) Salary ($) | (d) Bonus ($)(3) | (e) Stock Awards ($) | (f) Option Awards ($) | (g) Non-Equity Incentive Plan Compensation ($)(8) | (h) Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) | (i) All Other Compensation ($) | (j) Total ($) | |||||||||||||||||||||||||||
Howard W. Lutnick, | 2017 | (1)(2) | 500,000 | 7,000,000 | — | (4) | — | — | — | — | 7,500,000 | |||||||||||||||||||||||||
Chairman | 2016 | (1)(2) | 500,000 | 6,375,000 | — | (4) | — | — | — | — | 6,875,000 | |||||||||||||||||||||||||
2015 | (1)(2) | 500,000 | 5,875,000 | — | (4) | — | — | — | — | 6,375,000 | ||||||||||||||||||||||||||
— | ||||||||||||||||||||||||||||||||||||
Barry M. Gosin, | 2017 | (2) | 1,000,000 | (9) | — | — | (5) | — | — | — | 617,014 | (10)(11) | 1,617,014 | |||||||||||||||||||||||
Chief Executive Officer | 2016 | (2) | 475,000 | (9) | — | — | (5) | — | — | — | 514,617 | (10)(11) | 989,617 | |||||||||||||||||||||||
2015 | 475,000 | (9) | 2,436,600 | — | (5) | — | — | — | 26,752,219 | (10)(11) | 29,663,819 | |||||||||||||||||||||||||
— | ||||||||||||||||||||||||||||||||||||
James R. Ficarro, | 2017 | (2) | 540,000 | 675,000 | — | (6) | — | — | — | — | 1,215,000 | |||||||||||||||||||||||||
Chief Operating Officer | 2016 | (2) | 525,000 | 585,000 | — | (6) | — | — | — | — | 1,110,000 | |||||||||||||||||||||||||
2015 | (2) | 450,000 | 258,750 | — | (6) | — | — | — | 326,250 | (12) | 1,035,000 | |||||||||||||||||||||||||
— | ||||||||||||||||||||||||||||||||||||
Michael J. Rispoli, | 2017 | (2) | 415,000 | 485,000 | — | (7) | — | — | — | — | 900,000 | |||||||||||||||||||||||||
Chief Financial Officer | 2016 | (2) | 400,000 | 400,000 | — | (7) | — | — | — | — | 800,000 | |||||||||||||||||||||||||
2015 | (2) | 385,000 | 192,500 | — | (7) | — | — | — | 192,500 | (13) | 770,000 |
(a) Name and Principal Position | (b) Year (1) (2) | (c) Salary ($) (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 |
(2) | The amounts set forth in the table and corresponding footnotes reflect the total compensation awarded to |
(3) | On April 27, 2020, in response to the |
(4) | Column (d) includes $20,000,000 paid to Mr. Lutnick in 2021 in connection with the |
(5) | The 2021 amount of $5,025,000 under column (e) for Mr. Lutnick |
Mr. Ficarro’s bonus for 2016 was paid as follows: $321,744 in the form of 28,224non-exchangeable BGC Holdings PSUs and $263,249 in the form of 23,092non-exchangeable BGC Holdings PPSUs. Mr. Rispoli’s bonus for 2016 was paid as follows: $400,000 in the form of 19,298non-exchangeable BGC Holdings PSUs and 15,790non-exchangeable BGC Holdings PPSUs. Mr. Gosin did not receive a bonus for 2016. See footnote (10) below for further information.
Mr. Gosin’s, Mr. Ficarro’s and Mr. Rispoli’s bonuses for 2015 were paid as follows: (1) Mr. Gosin: $2,436,600 in the form of 153,861non-exchangeable BGC Holdings PSUs and 125,887non-exchangeable BGC Holdings PPSUs; (2) Mr. Ficarro: $258,750 in the form of 15,691non-exchangeable BGC Holdings PSUs and 12,838non-exchangeable BGC Holdings PPSUs; and (3) Mr. Rispoli: $192,500 in the form of 11,673non-exchangeable BGC Holdings PSUs and 9,551non-exchangeable BCG Holdings PPSUs. Mr. Gosin’s bonus for 2015 represents the amount earned in excess of the advance allocated to his 2015 bonus, which is described further in footnote (10) below.
In addition,
Of
Of the 2,000,000 BGC Holdings NPSUs granted to Mr. Lutnick inPPSUs were made exchangeable, on December 1, 2015, (i) in 2016, 500,000 were replaced by 275,000non-exchangeable196 BGC Holdings PSUs and 225,000non-exchangeable160 BGC Holdings PPSUs and (ii) in 2017, 500,000 were replaced by 360,000non-exchangeablemade exchangeable, on May 2, 2016, 4,755 BGC Holdings PSUs and 140,000non-exchangeable2,540 BGC Holdings PPSUs.
Of the 750,000 BGC Holdings NPSUs granted to Mr. Lutnick in 2016, inPPSUs were made exchangeable, and on April 17, 2017, 187,500 were replaced by 135,000non-exchangeable17,040 BGC Holdings PSUs and 52,500non-exchangeable13,942 BGC Holdings PPSUs.
PPSUs were made exchangeable. On February 16, 2018, pursuant to the BGC’s standing policy for Mr. Lutnick, all of Mr. Lutnick’s remaining BGC Holdings NPSUs were cancelled and replaced withJune 9, 2016, 4,755 BGC Holdings PSUs were exchanged for a value of $42,528 and 2,540 BGC Holdings PPSUs as follows: 568,813non-exchangeable BGC Holdings PSUs and 237,248non-exchangeable BGC Holdings PPSUs, in replacement of 806,061 BGC Holdings NPSUs, effective as of January 1, 2018. With respect to the replacement of BGC Holdings NPSUs in 2018, such replacement also applied to the ratable portion of the Newmark Holdings interests or units held in association with such replaced BGC Holdings NPSUs.
Column (e) also does not include the fairfor a value of grants of exchange rights to Mr. Lutnick in February 2016 with respect to 520,380 BGC Holdings PSUs and 425,765 BGC Holdings PPSUs, pursuant to the standing policy because each of those PSUs and PPSUs was originally granted to Mr. Lutnick in partial payment of bonuses awarded to him under the BGC Incentive Plan for prior years and reflected in column (g) of the table for each of those prior years at their full notional dollar values. See “Compensation Discussion and Analysis—NPSU Grants and Related Replacement and Exchange Right Grants.”
$16,993.
(6) |
For Mr. Ficarro, of the 81,818 BGC Holdings NPSUs granted to him in 2014, in 2015, 20,454 BGC Holdings NPSUs were made exchangeable.
Mr. Ficarro also has 20,455 BGC Holdings NPSUs and 16,736 BGC Holdings NPPSUs (which have a preferred value of $101,250) that were awarded in 2015 and vested into BGC Holdings PSUs and BGC Holdings PPSUs as of April 1, 2018. The vesting of such BGC Holdings NPSUs and BGC Holdings NPPSUs also applied to the ratable portion of the Newmark Holdings interests or units held in association with suchnon-exchangeable BGC Holdings NPSUs and BGC Holdings NPPSUs, as applicable.
The amounts in column (g) reflect the bonus awards to our named executive officers |
For 2015, Mr. Lutnick’s BGC Incentive Plan bonus was paid $1,500,000$2,000,000 in cash and $4,375,000$2,500,000 in the form of 375,000130,685 non-exchangeable BGC Newmark Holdings PSUs and 145,834130,685 non-exchangeable BGC Newmark Holdings PPSUs.
For 2015 and 2016,PPSUs; Mr. Gosin’s base salaryIncentive Plan bonus was $475,000, payable 50%paid $1,000,000 in cash and 50%$9,500,000 in the form of 496,602 non-exchangeable BGC Newmark Holdings APSUs. The 50% portion paid inPSUs and 496,602 non-exchangeable BGC Newmark Holdings APSUs was calculated on a monthly basis by dividing $19,792 by the closing price of Class A common stock on the last day of the month in which the cash portion of his salaryPPSUs; Mr. Rispoli’s bonus was paid $227,500 in cash and resulted in Mr. Gosin receiving 26,575$472,500 the form of 24,699 non-exchangeable BGC Newmark Holdings PSUs and 24,699 non- exchangeable Newmark Holdings PPSUs and Mr. Merkel’s bonus was paid $875,000 in 2015 and 26,548the form of 45,740 non-exchangeable BGC Newmark Holdings PSUs in 2016.
For |
For 2016, Mr. Gosin received commissions in the amount of $346,617 payable in connection with brokerage transactions. This amount was paid in the form of 34,888non-exchangeable BGC Holdings PSUs and 4,347non-exchangeable BGC Holdings APSUs. Suchnon-exchangeable BGC Holdings APSUs were not distribution eligible for 2016 or 2017 but are distribution eligible for 2018.
For 2015, Mr. Gosin received commissions in the amount of $2,592,183 payable in connection with brokerage transactions. This amount was paid in the form of 254,250non-exchangeable BGC Holdings PSUs and 31,784non-exchangeable BGC Holdings APSUs. Suchnon-exchangeable BGC Holdings APSUs were not distribution eligible for 2015, 2016 or 2017 but are distribution eligible for 2018.
In connection with his execution of a new employment agreement, on March 12, 2018, the Compensation Committee approved a grant of exchangeability with respect to 52,293 BGC Holdings APSUs, 1,146,696 BGC Holdings PSUs and 51,011 BGC Holdings PPSUs held by Mr. Gosin together with the ratable portion of the Newmark Holdings interests or units held in association with such BGC Holdings APSUs, PSUs and PPSUs.
In connection with an amendment to his existing employment agreement, on September 30, 2015, Mr. Gosin received aone-time grant of $24,000,164. This amount was paid in the form of 2,919,728non-exchangeable BGC Holdings PSUs. Such grant was given as an advance against future incentive pool allocation payments which reduced his incentive pool allocation in respect of each of fiscal years 2014, 2015 and 2016 pursuant to a fixed formula. The amount of theone-time grant was based on Mr. Gosin’s estimated target bonus in future years. On March 12, 2018, the Compensation Committee authorized the Company to issue Mr. Gosin a net 327,746 shares of our Class A common stock, based on the price of $15.57 per share, which was the closing price of our Class A common stock on that date, following the redemption and cancellation of an aggregate of 642,261non-exchangeable Newmark Holdings PSUs. For further information regarding Mr. Gosin’s bonus, please see “Compensation Discussion and Analysis—BGC Incentive Plan Bonuses and Other Bonuses Awarded for 2017” above.
Mr. Gosin receives the use of a car and driver in connection with Mr. Gosin’s duties. Such personal benefits had an aggregate incremental cost of approximately, |
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | (k) | (l) | |||||||||||||||||||||||||||||||||
Estimated Possible Payouts Under Non-Equity Incentive Plan Awards | Estimated Future Payouts Under Equity Incentive Plan Awards | All Other Grant Awards: Number of Shares of Stock or | All Other Option Awards: Number of Securities | Exercise or Base Price of Option | Grant Date Fair Value of Stock and Option | |||||||||||||||||||||||||||||||||||||||
Grant | Threshold | Target | Maximum | Threshold | Target | Maximum | Units | Underlying | Awards | Awards | ||||||||||||||||||||||||||||||||||
Name | Date | ($) | ($) | ($)(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 | ||||||||||||||||||||||||||||||||||||||||||||
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| — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Barry M. Gosin | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Michael J. Rispoli |
Of the 750,000 BGC Holdings NPSUs granted to Mr. Lutnick in 2016, which represents the portion of such BGC Holdings NPSUs attributable to his approximate time spent on Newmark matters, in 2017, 187,500 of such BGC Holdings NPSUs were replaced by 135,000non-exchangeable BGC Holdings PSUs and 52,500non-exchangeable BGC Holdings PPSUs.
On February 16, 2018, pursuant to the BGC’s standing policy for Mr. Lutnick, effective as of January 1, 2018, all of Mr. Lutnick’s remaining BGC Holdings NPSUs were cancelled and replaced with BGC Holdings PSUs and BGC Holdings PPSUs as follows: 568,813non-exchangeable BGC Holdings PSUs and 237,248non-exchangeable BGC Holdings PPSUs, in replacement of 806,061 BGC Holdings NPSUs. With respect to the replacement of BGC Holdings NPSUs in 2018, such replacement also applied to the ratable portion of the Newmark Holdings interests or units held in association with such replaced BGC Holdings NPSUs.
Columns (i) and (l) also do not include the fair value of grants of exchange rights to Mr. Lutnick in February 2016 with respect to 520,380 BGC Holdings PSUs and 425,765 BGC Holdings PPSUs pursuant to the standing policy, which represent the portion of such awards allocated to his approximate time spent on Newmark matters, because each of those BGC Holdings PSUs and PPSUs was originally granted to Mr. Lutnick in partial payment of bonuses awarded to him under the BGC Incentive Plan for prior years and reflected in column (g) of the Summary Compensation Table for each of those prior years at their full notional dollar values.
For each of the foregoing exchangeability transactions that occurred in 2018, such transaction also applied to the ratable portion of the Newmark Holdings interests or units held in association with such exchanged or redeemednon-exchangeable BGC Holdings PSUs andnon-exchangeable BGC Holdings PPSUs, as applicable.
Outstanding Equity Awards at Fiscal Year End
None of the named executive officers held any unexercised options as of December 31, 2017. The following table shows all exchangeable units representing a right to acquire shares of our Class A common stock held by each of the named executive officers as of December 31, 2017:
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| — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||
Stephen M. | ||||||||||||||||||||||||||||||||||||
| 0 | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
|
(1) | For Mr. Lutnick, column (b) represents |
For Mr. Ficarro, column (b) represents zero exchangeable Newmark Holdings PSUs held as of December 31, 2017.
2021.
2021.
The table above does not reflect the following exchangeable BGC Holdings PSUs or BGC Holdings APSUs held by the named executive officers as of December 31, 2017: Mr. Lutnick, 520,381 exchangeable BGC Holdings PSUs; Mr. Gosin, 149,328 exchangeable BGC Holdings APSUs and 1,978,728 exchangeable BGC Holdings PSUs; Mr. Ficarro, zero exchangeable BGC Holdings PSUs; and Mr. Rispoli, 19,775 exchangeable BGC Holdings PSUs.
These exchangeable BGC Holdings PSUs and exchangeable BGC Holdings APSUs were outstanding immediately prior to the separation and may be exchanged at any time on a 1:1 basis for shares of BGC’s Class A common stock so long as they exchanged together with the ratable portion of a number of the associated Newmark Holdings units, based on the exchange ratio in effect at the time (for more information on the exchange ratio, see “Item 13—Certain Relationships and Related Transactions, and Director Independence—Separation and Distribution Agreement”). $18.70.
Non-exchangeableExecutives held the following non-exchangeable Newmark Holdings PSUs, NPSUs or Newmark Holdings APSUs held as of December 31, 2017 that are eligible to be granted exchange rights into Newmark Class A common stock were as follows:stock: Mr. Lutnick, 1,664,770Lutnick: 1,144,365 units; Mr. Gosin, 2,239,640Gosin: 885,081 units; Mr. Ficarro, 38,895Rispoli: 69,115 units; and Mr. Rispoli, 13,983Merkel: 48,738 units. Thesenon-exchangeable Newmark Holdings PSUs/NPSUs/APSUs were issued in connection with the separationSeparation and distribution agreement.
Non-exchangeable BGC Holdings PSUs or BGC Holdings APSUs held asDistribution Agreement.
Non-exchangeable Newmark Holdings NPSUs held as of December 31, 2017 that are eligible to be replaced bynon-exchangeable Newmark Holdings PSUs/PPSUs, which in turn would be eligible to be granted exchange rights for shares of Newmark Class A common stock or cash were as follows: Mr. Lutnick, 863,363 units; Mr. Gosin, 0 units; Mr. Ficarro, 9,297 units; and Mr. Rispoli, 0 units. Thesenon-exchangeable Newmark Holdings NPSUs were issued in connection with the separation and distribution agreement.
BGC Holdings NPSUs held as of December 31, 2017 that are eligible to be replaced bynon-exchangeable BGC Holdings PSUs/PPSUs, which in turn would be eligible to be granted exchange rights for shares of Class A common stock or cash, were as follows: Mr. Lutnick, 1,900,000; Mr. Ficarro, 20,455; Mr. Rispoli, zero. Each of such units were issued 0.454545 related Newmark Holdings units in connection with the separation and distribution agreement, as described in “Item 13—Certain Relationships and Related Transactions, and Director Independence—Separation and Distribution Agreement.”
Unless otherwise noted, the number and value of awards in the table and this footnote reflect only those amounts attributable to the relevant executive’s services performed for us and excludes the amounts attributable to the relevant executives’ services performed on other matters for BGC Partners and its affiliates (other than us), and represents a percentage (i.e., for Mr. Lutnick, 50% of all compensation paid to him by BGC Partners; for Messrs. Gosin and Rispoli, 100% of all compensation; and for Mr. Ficarro, 90% of all compensation) of their total compensation based on each such executive’s approximate time spent on Newmark matters.
(2) | Column (c) does not includenon-exchangeable Newmark Holdings PPSUs held as of December 31, |
Column (c) does not includenon-exchangeable BGC Holdings PPSUs held as
Option Awards | ||||||||
(a) Name | (b) Number of BGC Shares acquired on exercise (#)(1) | (c) Value Realized on exercise ($) Unexercisable | ||||||
Howard W. Lutnick | 500,000 | 2,710,000 |
Name | Base Salary ($) | Bonus ($) | Earned but Unpaid Commissions | Non-Compete Payments ($) | Vesting of Equity Compensation ($) | Welfare Benefit Continuation ($) | Tax Gross- Up Payment ($)(6) | Total ($) | ||||||||||||||||||||||||
Howard W. Lutnick | ||||||||||||||||||||||||||||||||
Termination of Employment in connection with a Change in Control(1) | 1,000,000 | 14,000,000 | — | — | — | 26,018 | 8,876,344 | 23,902,362 | ||||||||||||||||||||||||
Extension of Employment in connection with a Change in Control | 500,000 | 7,000,000 | — | — | — | 26,018 | 3,774,997 | 11,301,015 | ||||||||||||||||||||||||
Barry M. Gosin | ||||||||||||||||||||||||||||||||
Termination of Employment without Cause Prior to a Change in Control(2) | 2,000,000 | (4) | — | 437,102 | 2,000,000 | (5) | — | — | — | 4,437,102 | ||||||||||||||||||||||
Termination of Employment without Cause in connection with a Change in Control(3) | 2,000,000 | (4) | — | 437,102 | 2,000,000 | (5) | — | — | — | 4,437,102 | ||||||||||||||||||||||
Any Termination of Employment | — | — | — | 2,000,000 | (5) | — | — | — | 2,000,000 |
Name | Base Salary | Bonus ($) (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, |
$20,469,731.
PPSU-Hs and PNPSUs.
In each case, the units exclude any units subject to redemption for zero or for cash in accordance with applicable agreements. See “—Change inof Control Agreements” below.
(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, |
(3) | Upon a change in control at December 31, |
$15,630,778.
(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 hisnon-compete for up to 24 months; provided that the Company may elect to release Mr. Gosin from hisnon-compete and cease making such payments at any time. If the Company elected to enforce Mr. Gosin’snon-compete for the full24-month period, the value of such payment would be $2,000,000. |
Mr. Lutnick is also entitled to a taxgross-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 |
(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 |
Equity Plan
Onmedian employee was an Administrative Assistant in the United States.
that are subjectChina, Poland, Republic of Mexico, Singapore, Switzerland, and the United Kingdom.
Subject to adjustment, the Equity Plan authorizes the issuance of up to 400 million shares of our Class A common stock (subject to adjustment) pursuant to the exercise or settlement ofequity awards granted underin 2021. Bonus awards can consist of discretionary bonuses, forgivable loans, cash advance distribution agreements and promissory notes. We annualized the Equity Plan. During any calendar year, no participant incompensation of employees and independent contractors and brokers who began employment during the Equity Plan may be granted awards (including options and stock appreciation rights) that may be settled by delivery of more than 15 million shares of our Class A common stock, subject to adjustment.fiscal year. In addition, with respectfor any persons who provide services to awards that may be settled solely in cash, no participant may be paid in any calendar year cash amounts relating toCantor and its affiliates (other than BGC Partners and its consolidated subsidiaries), the total compensation of such awards that exceed the greater of the fair market value of the number of shares of stock in the immediately preceding sentence at the date of grant or the date of settlement of the award. The Equity Plan treats these limitations as two separate limitations, such that awards that may be settled solely by delivery of stock will not operate to reduce the amount of cash-only awards, and vice-versa.
The Equity Plan is generally administered by our Compensation Committee, except that our Board of Directors performs the Committee’s functions under the Equity Planpersons for purposes of grantscalculating the pay ratio was consistent with the allocations used by the Company for financial accounting purposes in its 2021 consolidated financial statements. We then converted any compensation paid in foreign currency to U.S. dollars using the published rate for December 31, 2021 on
Our present and prospective directors, officers, employees, consultants and service providers and those of our parent, subsidiaries and affiliates will be eligible for awards under the Equity Plan. Since the selection of participants and their awards under the Equity Plan are to be determined in the discretion of our compensation committee or its designee, such individuals and their awards are not presently determinable, other than with respect to automatic grants tonon-employee directors, as discussed above, and the potential grant of exchange rights and cash settlement awards related tonon-exchangeable PSUs and other limited partnership units (for which exchange rights may be granted) awarded under the Participation Plan, including pursuant to the committee’s special quarterly performance-based award opportunities and change in control agreements and provisions discussed above.
The flexible terms of the Equity Plan are intended to, among other things, permit our Compensation Committee to impose performance conditions with respect to any award, thereby requiring forfeiture of all or part of an award if performance objectives are not met, or linking the grant, exercisability or settlement of an award to the achievement of performance conditions. The performance goals, to the extent designed to meet the requirements of Section 162(m) of the Code, will be based solely on one or more of the following measures:(i) pre-tax orafter-tax net income;(ii) pre-tax orafter-tax operating income; (iii) gross revenue; (iv) profit margin; (v) stock price, dividends and/or total stockholder
return; (vi) cash flow(s); (vii) market share;(viii) pre-tax orafter-tax earnings per share;(ix) pre-tax orafter-tax operating earnings per share; (x) expenses; (xi) return on equity; or (xii) strategic business criteria, consisting of one or more objectives based upon meeting specified revenue, market penetration or geographic business expansion goals, cost targets or goals relating to acquisitions or divestitures or any combination thereof. The determination of whether any performance goal is satisfied will be made in accordance with GAAP, to the extent relevant. However, in connection with any goal that is based upon operating income or operating earnings, the calculation may be made on the same basis as reflected in a release of earnings for a previously completed period as specified by the Committee.
If our Compensation Committee determines that any recapitalization, forward or reverse split, reorganization, merger, consolidation,spin-off, combination, repurchase or exchange of shares of our Class A common stock or other securities, stock dividend or other special, large and nonrecurring dividend or distribution (whether in the form of cash, securities or other property), liquidation, dissolution, or other similar corporate transaction or event affects our shares such that an adjustment is appropriate in order to prevent dilution or enlargement of the rights of participants under the Equity Plan, then the committee shall, in such manner as it may deem equitable, adjust any or all of (i) the number and kind of shares of stock reserved and available for awards under the Equity Plan; (ii) the number and kind of shares of stock specified in the annualper-person limitations under the Equity Plan; (iii) the number and kind of shares of outstanding restricted stock or other outstanding awards in connection with which shares have been issued; (iv) the number and kind of shares that may be issued in respect of other outstanding awards; and (v) the exercise price, grant price or purchase price relating to any award (or, if deemed appropriate, the committee may make provision for a cash payment, including, without limitation, payment based upon the intrinsic (i.e.,in-the-money) value, if any, with respect to any outstanding award). In addition, the committee shall make appropriate adjustments in the terms and conditions of, and the criteria included in, awards (including, without limitation, cancellation of unexercised or outstanding awards, or substitution of awards using stock of a successor or other entity) in recognition of unusual or nonrecurring events (including, without limitation, events described in the preceding sentence and events constituting a change in control) affecting us or our financial statements, or in response to changes in applicable law, regulation, or accounting principles.
Except as otherwise provided in individual award agreements, which need not be uniform, all conditions and restrictions relating to the continued performance of services with respect to the exercisability or full enjoyment of an award will accelerate or otherwise lapse immediately prior to a “change in control” (as defined in the Equity Plan, and which, prior to the distribution, will include a “change in control” of BGC Partners). Upon the consummation of any transaction whereby we become a wholly owned subsidiary of any unaffiliated corporation, all stock options outstanding under the Equity Plan will terminate (after taking into account any accelerated vesting), with or without the payment of any consideration therefor, including, without limitation, payment of the intrinsic (i.e.,in-the-money) value, if any, of such options, as determined by our compensation committee, unless such other corporation continues or assumes the Equity Plan as it relates to options then outstanding (in which case such other corporation will be treated as us for all purposes under the Equity Plan, and our Compensation Committee shall make appropriate adjustment in the number and kind of shares of stock subject thereto and the exercise price per share thereof to reflect consummation of such transaction). If the Equity Plan is not to be so assumed, we will notify participants at least 10 days in advance of the consummation of such transaction.
As to any award granted as a stock option or SAR, the Equity Plan includes a restriction providing that our compensation committee may not, without prior stockholder approval to the extent required under applicable law, regulation, or exchange rule, subsequently reduce the exercise price or grant price relating to such award, or take such other actions as may be considered a “repricing” of such award under GAAP. Adjustments to the exercise or grant price or number of shares of our Class A common stock subject to an option or SAR to reflect the effects of a stock split or other extraordinary corporate transaction will not constitute a “repricing.”
We may not, in connection with any award, extend, maintain, renew, guarantee or arrange for credit in the form of a personal loan to any participant who is our director or executive officer. With the consent of our compensation committee, and subject at all times to, and only to the extent, if any, permitted under, applicable law and regulation and other binding obligations or provisions applicable to us, we may extend, maintain, renew, guarantee or arrange for credit in the form of a personal loan to a participant who is not our director orprincipal executive officer in connection with any award, including, without limitation, the payment by such participant of any or all federal, state or local income or other taxes due in connection with any award.
The Equity Plan isnon-exclusive, and the Plan creates no limitations on our Board of Directors or Compensation Committee from adopting other compensatory arrangements. The Equity Plan may be amended, altered, suspended, discontinued or terminated by our Board without stockholder approval unless such approval is required by law or regulation, including, without limitation, under the applicable rules of any stock exchange. Stockholder approval will not be deemed to be required under laws or regulations that condition favorable tax treatment on such approval, although our Board may, in its discretion, seek stockholder approval in any circumstances in which it deems such approval advisable. Our compensation committee may waive any conditions or rights, or amend, alter, suspend, discontinue or terminate any award, under the Equity Plan. No such change to the Equity Plan or any award may, without the participant’s consent, materially impair the rights of the participant under an outstanding award except as provided in the Equity Plan or applicable award agreement.
Material Federal Income Tax Consequences of Our Equity Plan
The following is a brief description of the federal income tax consequences generally arising with respect to awards that may be granted under the Equity Plan. This discussion is intendedwas calculated for the information of our stockholders and not as tax guidance to individuals who may participate in the Equity Plan. The summary does not address the effects of other federal taxes or taxes imposed under state, local or foreign laws.
The grant of a stock option or SAR will create no tax consequences for the participant or us. A participant will not have taxable income upon exercising an ISO (except that the alternative minimum tax may apply), and we will receive no tax deduction at that time. Upon exercising an option other than an ISO, the participant must generally recognize ordinary income equal to the difference between the exercise price and the fair market value of the freely transferable andnon-forfeitable stock received. In each case, we will generally be entitled to a tax deduction equal to the amount recognized as ordinary income by the participant.
A participant’s disposition of stock acquired upon the exercise of a stock option or SAR generally will result in capital gain or loss measured by the difference between the sale price and the participant’s tax basis in such stock (or the exercise price of the option in the case of stock acquired by exercise of an ISO and held for the applicable ISO holding periods). Generally, there will be no tax consequences to us in connection with a disposition of stock acquired upon the exercise of an option or other award, except that we will generally be entitled to a tax deduction (and the participant will recognize ordinary taxable income) if stock acquired upon exercise of an ISO is disposed of before the applicable ISO holding periods have been satisfied.
With respect to awards granted under the Equity Plan that may be settled either in cash or in stock or other property that is either not restricted as to transferability or not subject to a substantial risk of forfeiture, the participant generally must recognize ordinary income equal to the cash or fair market value of stock or other property received. We will generally be entitled to a tax deduction for the same amount. With respect to awards involving stock or other property that is restricted as to transferability and subject to a substantial risk of forfeiture, the participant generally must recognize ordinary income equal to the fair market value of the stock or other property received at the first time the stock or other property becomes transferable or not subject to a substantial risk of forfeiture, whichever occurs earlier. We will generally be entitled to a tax deduction in an amount equal to the ordinary income recognized by the participant. A participant may elect to be taxed at the time of receipt of the stock or other property rather than upon the lapse of restrictions on transferability or substantial risk of forfeiture, but if the participant subsequently forfeits such stock or property, the participant would not be entitled to any tax deduction, including a capital loss, for the value of the stock or property on which the participant previously paid tax. Such election must be made and filed with the IRS within 30 days after the receipt of the stock or other property.
As discussed above, in certain cases the federal income tax deduction to which we otherwise are entitled may be limited by application of Section 162(m) of the Code, which generally disallows a publicly held corporation’s tax deduction for compensation paid to its chief executive officer and certain of its other most highly compensated named executive officers in excess of $1,000,000 in any year. We intend that stock options and SARs granted under the Equity Plan at the fair market value of our Class A common stock on the date of grant will qualify as performance-based compensation, to the extent applicable. Stock units, performance units, stock awards, dividend equivalents, exchange rights and other awards granted under the Equity Plan will qualify as performance-based compensation only when our Compensation Committee conditions the grant, exercise or settlement of such awards on the achievement of specified performance goals2021 fiscal year in accordance with the requirements of Section 162(m)Item 402(c)(2)(x) of Regulation S-K and the pay ratio was determined to be as follows:
Under Section 409Aratio of the Code, an award underannual total compensation of the Equity Plan may be taxableChairman to the participant at 20 percentage points above ordinary federal income tax rates at the time the award becomes vested, plus interest and penalties, even if that is prior to the delivery of cash or stock in settlementmedian employee of the award, ifCompany would have been approximately 174 to 1.
The Equity Plan provides that we have the rightmedian employee to require participants under the Equity Plan to pay us an amount necessary for us to satisfyMr. Gosin, our federal, state, local and foreign tax withholding obligations with respect to such awards. We may withhold from other amounts payable to such individual an amount necessary to satisfy these obligations. Unless the Compensation Committee or its designee determines otherwise, a participant may satisfy this withholding obligation by having shares acquired pursuant to the award withheld, or by transferring to us previously acquired shares of our Class A common stock.
Incentive Plan
On December 13, 2017, we adopted the Incentive Plan. The purpose of the Incentive Plan is to (i) attract, retain and reward key employees by providing them with the opportunity to earn bonuses that are based on the achievement of specified performance goals, and (ii) structure such bonus opportunities in a way that will qualify the payments madeChief Executive Officer, as “performance-based” for purposes of Section 162(m) of the Code so that we will be entitled to a federal income tax deduction for the payment of such incentive bonuses to such employees, to the extent applicable. The adoption of the Incentive Plan will not limit the power of our Board of Directors or of our Compensation Committee to adopt such other bonus or incentive arrangements as it may deem appropriate.
The Incentive Plan is administered by our Compensation Committee. The Committee has broad administrative authority to, among other things, designate participants, establish performance goals and performance periods, determine the timing of the payment of bonuses, and interpret and administer the Incentive Plan.
Participants in the Incentive Plan for any given performance period may include any of our key employees, including those of our subsidiaries, operating units and divisions, who is designated as a participant for such period by the Committee. The participants in the Plan for any given performance period will be designated by the Committee, in its sole discretion, before the end of the 90th day of such performance period or the date on which 25% of such performance period has been completed (which we refer to as the “Applicable Period”). This determination may vary from period to period. Bonuses paid under the Plan may be made in the form of cash, shares of our Class A common stock or other stock-based awards under our Equity Plan, or partnership unit awards under the Participation Plan.
Within the Applicable Period, our Compensation Committee will specify the applicable performance criteria and targets to be used under the Incentive Plan for such performance period. These performance criteria may vary from participant to participant and will be based on one or more of the following measures:(i) pre-tax orafter-tax net income;(ii) pre-tax orafter-tax operating income; (iii) gross revenue; (iv) profit margin; (v) stock price, dividends and/or total stockholder return; (vi) cash flow(s); (vii) market share;(viii) pre-tax orafter-tax earnings per share;(ix) pre-tax orafter-tax operating earnings per share; (x) expenses; (xi) return on equity; or (xii) strategic business criteria consisting of one or more objectives based upon meeting specified revenue, market penetration or geographic business expansion goals, cost targets and goals relating to acquisitions or divestitures, or any combination thereof. These performance criteria or goals may be: (a) expressed on an absolute or relative basis, including comparisons to the performance of other companies; (b) based on internal targets; (c) based on comparisons with prior performance; and (d) based on comparisons to capital, stockholders’ equity, shares outstanding, assets or net assets. The determination of whether any performance goal is satisfied will be made in accordance with GAAP, to the extent relevant, without regard to extraordinary items, changes in accounting, unless the committee determines otherwise, or nonrecurring acquisition expenses and restructuring charges, including various charges related to the merger. However, in connection with any goal that is based on operating income or operating earnings, the calculation may be madecalculated on the same basis as reflected in a release of earnings for a previously completed period, as specified by the Committee. For example, an income-based performance measure could be expressed in a number of ways, such as net earnings per share or return on equity, and with referencewas approximately 146 to meeting or exceeding a specific target, or with reference to growth above a specified level, such as a prior year’s performance or
current or previous peer group performance. The Incentive Plan provides that the achievement of such goals must be substantially uncertain at the time they are established, and bonus opportunities are subject to the Committee’s right to reduce the amount of any bonus payable as a result of such performance, as discussed below.
The bonus opportunity for each participant may be expressed as a dollar-denominated amount or by reference to a formula, such as a percentage share of a bonus pool to be created under the Incentive Plan or a multiple of annual base salary. If a pool approach is used, the total bonus opportunities represented by the shares designated for the participants may not exceed 100% of the pool. In all cases, our Compensation Committee has the sole discretion to reduce (but not to increase) the actual bonuses paid under the Incentive Plan. The actual bonus paid to any given participant at the end of a performance period will be based on the extent to which the applicable performance goals for such performance period are achieved, as determined by the committee. The maximum bonus payable under the Incentive Plan to any one individual in any one calendar year will be $25 million.
Our Board of Directors may at any time amend or terminate the Incentive Plan, provided that (i) without the participant’s written consent, no such amendment or termination may adversely affect the bonus rights (if any) of any already designated participant for a given performance period once the participant designations and performance goals for such performance period have been announced; and (ii) our Board will be authorized to make any amendments necessary to comply with applicable regulatory requirements, including, without limitation, Section 162(m) of the Code, to the extent applicable. Amendments to the Incentive Plan will require stockholder approval only if required under Section 162(m) of the Code or other applicable law or regulation.
Material Federal Income Tax Consequences of Our Incentive Plan
The following is a brief description of the federal income tax consequences generally arising with respect to bonuses paid under the Incentive Plan. This discussion is intended for the information of our stockholders and not as tax guidance to individuals who may participate in the Incentive Plan. This summary does not address the effects of other federal taxes or taxes imposed under state, local or foreign tax laws.
Section 162(m) of the Code generally disallows a publicly held corporation’s federal income tax deduction in excess of $1,000,000 for compensation paid to its chief executive officer and certain of its other most highly compensated named executive officers, subject to certain exceptions.
Under present federal income tax law, a participant will generally realize ordinary income equal to the amount of the bonus received under the Incentive Plan in the year of such receipt. We will receive a tax deduction for the amount constituting ordinary income to the participant, provided that the participant’s total compensation is below the limit established by Section 162(m) of the Code or the Incentive Plan award satisfies the requirements of an exception to the limits pursuant to Section 162(m) of the Code. We periodically review the potential consequences of Section 162(m) and may structure the performance-based portion of our executive compensation to comply with certain exemptions in Section 162(m), to the extent available. In December 2017, Section 162(m) of the Code was modified by the Tax Cuts and Jobs Act to remove the exemption for performance-based compensation over the $1,000,000 limit. We do not currently expect that decisions relating to compensation will be significantly impacted by Section 162(m) matters on a going forward basis. The Committee retains negative discretion to reduce or withhold performance-based compensation to our executive officers, and also reserves the right to use its judgment to authorize compensation payments that do not comply with the exemptions in Section 162(m) when it believes that such payments are appropriate, including after taking into consideration changing business conditions or the executive officer’s individual performance.
Under Section 409A of the Code, an award under the Incentive Plan may be taxable to the recipient at 20 percentage points above ordinary income tax rates at the time the award becomes vested, plus interest and penalties, if the award constitutes “deferred compensation” under Section 409A of the Code and the requirements of Section 409A of the Code are not satisfied.
The Incentive Plan provides that we have the right to withhold from any bonus payable to a participant an amount necessary to satisfy our federal, state and local tax withholding obligations.
Our Participation Plan
On December 13, 2017, we adopted the Participation Plan as a means to attract, retain, motivate and reward present or prospective officers, employees and consultants of and service providers to us and our affiliates, by enabling such persons to acquire or increase their ownership interests in Newmark Holdings.
The Participation Plan is administered by our Compensation Committee or its designee. The Participation Plan provides for the grant of Newmark Holdings limited partnership interests issuable pursuant to the Newmark Holdings limited partnership agreement as of the date of the Participation Plan or as may thereafter be issuable thereunder. The total number of Newmark Holdings limited partnership interests issuable under the Participation Plan will be determined from time to time by our Board of Directors, provided that interests exchangeable for or otherwise representing the right to acquire shares of our Class A common stock may only be granted to the extent such shares are available for issuance under the Equity Plan. The Committee has broad administrative authority to, among other things, select from among present and prospective officers, employees and consultants of and service providers to us and our affiliates entitled to receive bonus or purchase awards, determine the number and type of partnership interests covered by such awards, including whether such partnership interests will be exchangeable for or otherwise represent the right to receive shares of our Class A common stock, determine the purchase period and other terms and conditions of any purchase rights, and interpret and administer the Participation Plan. The Committee has the discretion to determine the price of any purchase right, which may be set at preferential or historical prices that are less than the prevailing fair market value of our Class A common stock.
The Participation Plan provides that our Compensation Committee may at any time amend or terminate the Participation Plan, provided that, without the participant’s written consent, no such amendment or termination will adversely affect any outstanding purchase rights. Amendments to the Participation Plan will require stockholder approval only if required by applicable laws or applicable regulatory requirements.
1.
(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 ($) | (h) Total ($) | |||||||||||||||||||||
John H. Dalton | — | 70,000 | — | — | — | — | 70,000 | |||||||||||||||||||||
Director | ||||||||||||||||||||||||||||
Michael Snow | — | 70,000 | — | — | — | — | 70,000 | |||||||||||||||||||||
Director |
(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 |
(3) | No options were granted |
(4) | Mr. Cervinka resigned effective April 29, 2021. |
For the portion of 2017 during which we had a
ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS |
Name | Class B Common Stock | Class A Common Stock | ||||||||||||||
Shares | % | Shares | % | |||||||||||||
5% Beneficial Owners(1): | ||||||||||||||||
BGC Partners, Inc. | 15,840,049 | (3) | 100.0 | (1) | 148,040,561 | (2) | 86.6 | (3) | ||||||||
Cantor Fitzgerald, L.P. | 39,641,396 | (4) | 100.0 | (5) | 171,841,908 | (6) | 88.2 | (7) | ||||||||
CF Group Management, Inc. (8) | 39,641,396 | (4) | 100.0 | (5) | 171,841,908 | (6) | 88.2 | (6) | ||||||||
Executive Officers and Directors(1): | ||||||||||||||||
Executive Officers | ||||||||||||||||
Howard W. Lutnick (9) | 39,641,396 | (4) | 100.0 | (5) | 172,314,871 | (10) | 88.2 | (7) | ||||||||
Barry M. Gosin | — | — | 1,295,044 | (12) | * | |||||||||||
James R. Ficarro | — | — | — | * | ||||||||||||
Michael J. Rispoli | — | — | 8,989 | (13) | * | |||||||||||
Directors | ||||||||||||||||
John H. Dalton | — | — | — | * | ||||||||||||
Michael Snow | — | — | — | * | ||||||||||||
All executive officers and directors as a group (6 persons) | 39,641,396 | 100.0 | (5) | 173,291,268 | (14) | 88.3 | (15) |
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 |
(4) | Consists of (a) 20,932,207 shares of our Class A common stock acquirable upon conversion of |
Percentage based on (a) |
Consists of (a) |
Consists of (a) |
Percentage based on (a) |
(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. |
CFGM is the managing general partner of Cantor. |
Mr. Lutnick is the Chairman and Chief Executive Officer of CFGM and |
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 |
(iv) | 353,326 shares of our Class A common stock acquirable upon conversion of |
(v) | 20,932,207 shares of |
(vi) | 24,609,471 shares of our Class A common stock acquirable upon exchange of |
(vii) | 3,591,626 shares of our Class A common stock acquirable upon exchange of |
(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 |
Percentage based on (a) |
(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, |
(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 |
|
Mr. Lutnick, receipt of which has been deferred, (f) 571,238 shares of our Class A common stock acquirable upon exchange of |
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 |
Underwriting Agreement
On December 14, 2017, we entered into all intercompany arrangements and agreements that were previously approved by the Underwriting Agreement byAudit Committee of BGC Partners with respect to BGC Partners and among Newmark and Goldman Sachs & Co. LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Citigroup Global Markets Inc.its subsidiaries and Cantor Fitzgerald & Co. (“CF&Co.”) as representativesand its subsidiaries were also approved by our Board of Directors with respect to the several Underwriters (“Underwriters”) named therein (the “Underwriting Agreement”),relationships between us and our subsidiaries and Cantor and its subsidiaries following our IPO on the terms and conditions approved by the BGC Audit Committee during such time that our business was owned by BGC Partners. These arrangements include, but are not limited to, the following: (i) an authorization to provide Cantor real estate and related services, including real estate advice, brokerage, property or facilities management, valuation and advisory and other services; (ii) an authorization to enter into brokerage and similar agreements with respect to the provision of ordinary course brokerage services in circumstances in which such entities customarily provide brokerage services to third-party customers; (iii) an authorization to enter into agreements with Cantor and/or its affiliates, to provide services, including finding and reviewing suitable acquisition or partner candidates, structuring transactions and negotiating and due diligence services in connection with the initial public offering of upacquisitions and other business strategies in commercial real estate and other businesses from time to 23,000,000 shares of Class A common stock, which included 3,000,000 shares of Class A common stock allocatedtime; and (iv) an arrangement to the Underwriters’ over-allotment option. Sandler O‘Neill & Partners, L.P. acted as the qualified independent underwriter for purposes of Financial Industry Regulatory Authority Rule 5121. On December 19, 2017, we completed the IPO of 20,000,000 shares of our Class A common stock at the IPO price of $14.00 per share ($13.23 per share after deducting underwriting discounts and commissions). Priorjointly manage exposure to the IPO, we were a wholly owned subsidiary of BGC Partners.
On December 26, 2017, we completed the sale of an additional 3,000,000 shares of our Class A common stock to the Underwriters of our IPO pursuant to the Underwriters’ full exercise of the overallotment option granted to the Underwriterschanges in connection with the IPO. We received approximately $304.3 million in aggregate net proceeds from the IPO, all of which we used to partially repay indebtedness under a certain term loan that we assumed from BGC Partners prior to the closing of our IPO.
foreign exchange rates.
The Separation and Contribution
The separation and distribution agreement identifies assets
Atprior to the closing of the separation, the BGC Partners group contributed, conveyed, transferred, assigned and delivered to us and our subsidiaries (including Newmark OpCo), and we and our subsidiaries (including Newmark OpCo) acquired and accepted from the BGC Partners group, all of the right, title and interest of the BGC Partners group to the transferred assets (which we refer to as the “contribution”), which include among others the following:
The BGC Partners group retained ownership to all of their other assets, which include among others the following:
In the separation, we, Newmark Holdings and Newmark OpCo assumed and became liable for, and will pay, perform and discharge as they become due, the transferred liabilities, which include among others the following:
The BGC Partners group retained and became liable for, and will pay, perform and discharge as they become due, the excluded liabilities, which include:
The parties to the separation and distribution agreement executed and delivered one or more agreements of assignment and assumption and/or bills of sale or such other instruments of transfer as BGC Partners requested for the purpose of effecting the separation.
No Representations and Warranties
No party to the separation and distribution agreement made any representations or warranties of any kind concerning the transactions contemplated by the separation and distribution agreement, transferred assets, transferred liabilities or the Newmark business or any consents or approvals required in such connection. The parties agree that we bear the economic and legal risk that the conveyance of the transferred assets is insufficient or that the title to those assets is not good, marketable and free from encumbrances.
Intercompany Agreements; Guarantee Obligations
Certain contracts, licenses, commitments or other arrangements between BGC Partners and us or any entity transferred to us in the separation will be terminated immediately prior to the distribution. Intercompany receivables outstanding under any of the terminated agreements as of the completion of the IPO will be net settled in cash within 90 days thereafter.
The parties will cooperate to have the applicable members of the BGC Partners group substituted or otherwise removed as guarantor or obligor in respect of all obligations of BGC Partners under any transferred liabilities for which BGC Partners may be liable, as guarantor, original tenant, primary obligor or otherwise, except, in each case, for any excluded liability. We (1) will indemnify and hold harmless BGC Partners for any resulting identifiable losses and (2) will not renew, extend the term of, increase its obligations under, or transfer to a third party, without BGC Partners’ prior written consent, any loan, lease, contract or other obligation for which BGC Partners may be liable.
The parties will cooperate to have the applicable members of the Newmark group substituted or otherwise removed as guarantor or obligor in respect of all obligations of Newmark under any excluded liabilities for which Newmark may be liable, as guarantor, original tenant, primary obligor or otherwise, except, in each case, for any transferred liability. BGC Partners (1) will indemnify us and hold us harmless for any resulting identifiable losses and (2) will not renew, extend the term of, increase its obligations under, or transfer to a third party, without our prior written consent, any loan, lease, contract or other obligation for which we may be liable.
New Newmark
Releases
As
As of the separation, the BGC Partners group agreed to release and forever discharge the Newmark group from:
The releases do not extend to (1) obligations or liabilities the release of which would result in the release of an unaffiliated third party or (2) obligations or liabilities under any agreements between the parties that remain in effect following the separation, including, but not limited to, the separation and distribution agreement, the administrative services agreement, the transition services agreement, the tax receivable agreement, the tax matters agreement, the registration rights agreement and the transfer documents in connection with the separation.
Employee Matters
Amendment
The separation and distribution agreement may be amended and modified only by a written agreement, signed by all parties to the separation distribution agreement.
OpCo Partnership Division
Prior to the completion of the IPO, in connection with the separation, BGC U.S. OpCo and its partners took a series of steps so that its assets and liabilities were divided between BGC U.S. OpCo and Newmark OpCo. We refer to these steps as the “OpCo Partnership Division.” Immediately following the OpCo Partnership Division, the limited partners of BGC U.S. OpCo held all of the outstanding Newmark OpCo limited partnership interests in the same aggregate proportions that such persons held in BGC U.S. OpCo, with the total number of Newmark OpCo limited partnership units equal to the total number of BGC U.S. OpCo limited partnership unitsmultiplied bythe contribution ratio (which at the time was one divided by 2.2).
Holdings Partnership Division
Prior to the completion of the IPO, in connection with the separation, BGC Holdings and its partners took a series of steps so that its assets and liabilities were divided between BGC Holdings and Newmark Holdings. We refer to these steps as the “Holdings Partnership Division.” Immediately following the Holdings Partnership Division, the limited partners of BGC Holdings held all of the outstanding Newmark Holdings limited partnership interests in the same aggregate proportions that such persons held in BGC Holdings, with the total number of Newmark Holdings limited partnership units equal to the total number of BGC Holdings limited partnership unitsmultiplied bythe contribution ratio.
Newmark Contribution
Prior to the completion of the IPO, in connection with the separation, BGC Partners contributed certain assets and liabilities to Newmark. In consideration of this contribution, effective as of the closing of the contribution, Newmark took such actions (through an issuance of additional shares of Newmark common stock to BGC Partners, a recapitalization, stock split or otherwise) such that after such action, (1) the aggregate number of shares of Newmark Class A common stock held by BGC Partners immediately following such action equaled the number of shares of BGC Partners Class A common stock outstanding immediately following such actionmultiplied bythe contribution ratio; and (ii) the aggregate number of shares of Newmark Class B common stock held by BGC Partners immediately following such action equaled the number of shares of BGC Partners Class B common stock outstanding immediately following such actionmultiplied bythe contribution ratio.
Assumption and Repayment of Indebtedness
The Distribution
The separation and distribution agreement also governs the rights and obligations of BGC Partners and Newmark regarding the potential distribution by BGC Partners to its stockholders of the shares of our common stock held by BGC Partners following the IPO. BGC Partners has advised us that it currently expects to accomplish the distribution through aspin-off, which is a pro rata distribution by BGC Partners of its shares of our common stock to holders of BGC Partners’ common stock, with our shares of Class A common stock held by it to be distributed to the holders of shares of Class A common stock of BGC Partners and our shares of Class B common stock held by it to be distributed to the holders of the shares of Class B common stock of BGC Partners.
To account for potential changes in the number of shares of Class A common stock and Class B common stock of BGC Partners and Newmark between the IPO and the distribution, and to ensure that the distribution (if it occurs) is pro rata to the stockholders of BGC Partners, immediately prior to the distribution, BGC Partners will convert any shares of Class B common stock of Newmark beneficially owned by BGC Partners into shares of Class A common stock of Newmark, or exchange any shares of Class A common stock of Newmark beneficially owned by BGC Partners for shares of Class B common stock of Newmark, so that the ratio of shares of Class B common stock of Newmark held by BGC Partners to the shares of Class A common stock of Newmark held by BGC Partners, in each case as of immediately prior to the distribution, equals the ratio of shares of outstanding Class B common stock of BGC Partners to the shares of outstanding Class A common stock of BGC Partners, in each case as of the record date of the distribution.
If the distribution were to have occurred immediately after the IPO, then each share of Class A common stock of BGC Partners would have received in the distribution a number of shares of Class A common stock of Newmark equal to the contribution ratio, and each share of Class B common stock of BGC Partners would have received in the distribution a number of shares of Class B common stock of Newmark equal to the contribution ratio. The precise distribution ratio, however, may change if there are changes in the number of outstanding shares of Class A or Class B common stock of BGC Partners, or the number of shares of Class A or Class B common stock of Newmark held by BGC Partners, between the date of the IPO and the date of the distribution.
There are various conditions to the completion of the distribution. In addition, BGC Partners may terminate its obligation to complete the distribution at any time if the Board of Directors of BGC Partners, in its sole discretion, determines that the distribution is not in the best interests of BGC Partners or its stockholders. Consequently, we cannot assure you as to when or whether the distribution will occur.
The separation and distribution agreement provides that BGC Partners’ obligation to complete the distribution will be subject to several conditions that must be satisfied (or waived by BGC Partners in its sole discretion), including, among others:
As described above, BGC Partners will have the right to terminate its obligation to complete the distribution if, at any time, the board of directors of BGC Partners determines, in its sole discretion, that the distribution is not in the best interests of BGC Partners or its stockholders. If such termination occurs after the separation, neither party will have any liability to the other party under the separation and distribution agreement in respect of the distribution.
If the board of directors of BGC Partners terminates BGC Partners’ obligation to complete the distribution or waives a material condition to the distribution, we intend to issue a press release disclosing this waiver, if any, or file a current report on Form8-K with the SEC.
We will cooperate with BGC Partners to accomplish the distribution and will, at BGC Partners’ direction, promptly take any and all actions necessary or desirable to effect the distribution, including, if necessary, the registration under the Securities Act of our Class A common stock on an appropriate registration form or forms to be designated by BGC Partners.
Operating Covenants
For so long as BGC Partners beneficially owns at least 50% of the total voting power of our outstanding capital stock entitled to vote in the election of directors, we will not, and will cause our subsidiaries to not (without BGC Partners’ prior written consent):
For so long as BGC Partners beneficially owns shares of our capital stock constituting “control” within the meaning of Section 368(c) of the Code, we will not (without BGC Partners’ prior written consent):
For so long as BGC Partners beneficially owns shares of our capital stock satisfying the stock ownership requirements set forth in Section 1504 of the Code, we will not (without BGC Partners’ prior written consent) issue any shares of our capital stock or any rights, warrants or options to acquire our capital stock, if this could cause BGC Partners, at any time prior to the distribution, to (1) fail to beneficially own shares of our capital stock satisfying the stock ownership requirements set forth in Section 1504 of the Code or (2) otherwise not be permitted to treat any member of the Newmark group as members of the “affiliated group” (within the meaning of Section 1504 of the Code) of which BGC Partners is the common parent.
Auditors and Audits; Annual Financial Statements and Accounting
For so long as BGC Partners is required to consolidate our results of operations and financial position or account for its investment in us under the equity method of accounting, we will:
Access to Information
Under the separation and distribution agreement, following the separation, we and BGC Partners are obligated to provide each other access to information as follows:
Expenses
Under the separation and distribution agreement, we were responsible for all third-party costs, fees and expenses relating to the IPO, including the SEC registration fee, the FINRA fee, the reimbursable expenses of the Underwriters pursuant to the underwriting agreement, all of the costs of producing, printing, mailing and otherwise distributing the prospectus, as well as the underwriting discounts and commissions. All third-party fees, costs and expenses paid or incurred in connection with the distribution will be paid by BGC Partners. Except as otherwise set forth above or as
provided in the separation and distribution agreement or other ancillary agreements, all other costs and expenses incurred in connection with the transactions contemplated by the separation and distribution agreement will be borne by the party incurring such costs and expenses.
Termination
The separation and distribution agreement may be terminated and the distribution may be amended, modified or abandoned at any time prior to the distribution by the mutual consent of BGC Partners and us. In addition, prior to the distribution, BGC Partners has the right to terminate its obligation to complete the distribution if, at any time, the Board of Directors of BGC Partners determines, in its sole discretion, that the distribution is not in the best interests of BGC Partners or its stockholders. If the separation and distribution agreement is terminated after the completion of the IPO, only the provisions of the separation and distribution agreement that obligate the parties to pursue the distribution will terminate. The other provisions of the separation and distribution agreement and the other ancillary agreements that BGC Partners and we entered into will remain in full force and effect.
BGC Partners Contribution of Newmark OpCo Units Prior to the Distribution
Prior to the distribution, unless otherwise agreed by BGC Partners, in order for a partner of BGC Holdings to exchange a BGC Holdings exchange right unit into a share of common stock of BGC Partners pursuant to the BGC Holdings limited partnership agreement, such partner must exchange both one BGC Holdings exchange right unit and a number of Newmark Holdings exchange right units calculated in accordance with the BGC Holdings limited partnership agreement, in order to receive one share of BGC Partners common stock. Prior to the distribution, to the extent that BGC Partners receives any Newmark OpCo units as a result of any exchange of Newmark Holdings exchange right unit as described in the immediately preceding sentence or as a result of any contribution by BGC Partners to Newmark OpCo, purchase by BGC Partners of Newmark OpCo units or otherwise (see “—Reinvestments in Newmark OpCo by BGC Partners”), then in each case, BGC Partners will contribute such Newmark OpCo units to Newmark in exchange for a number of shares of Newmark common stock equal to the number of such Newmark OpCo units multiplied by the exchange ratio, currentlyone-for-one, subject to adjustment (with the class of shares of our common stock corresponding to the class of shares of common stock that BGC Partners issued upon such exchange).
Exchange Agreement
In connection with the separationSeparation on December 13, 2017, we entered into the exchange agreement, which provides BGC Partners, Cantor, CFGM and any other qualified Class B Holder entitled to hold Class B common stock under our certificateAmended and Restated Certificate of incorporationIncorporation (our “certificate of incorporation”) with the right to exchange at any time and from time to time, on aone-to-one basis, shares of our Class A common stock now owned or subsequently acquired by such persons for shares of our Class B common stock, up to the number of shares of Class B common stock that are authorized but unissued under our certificate of incorporation. Prior to the distribution, however, without the prior consent of BGC Partners, the Cantor entities may not exchange such shares of our Class A common stock into shares of our Class B common stock. Our Audit Committee and Board of Directors have determined that the exchange agreement is in the best interests of Newmark and its stockholders because, among other things, it will help ensure that Cantor retains its exchangeable limited partnership units in Newmark Holdings, which is the same partnership in which Newmark’s partner employees participate, thus continuing to align the interests of Cantor with those of the partner employees.
set forth in the Separation and Distribution Agreement and was 0.9435 as of March 31, 2022.
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. |
Notwithstanding the foregoing, prior to the distribution, without the prior consent of BGC Partners, no Newmark Holdings limited partnership interests shall be exchangeable into our shares of common stock. Prior to the distribution, unless otherwise agreed by BGC Partners, in order for a partner to exchange exchangeable limited partnership interests in BGC Holdings or Newmark Holdings into shares of common stock of BGC Partners, such partner must exchange both units of a BGC Holdings exchangeable limited partnership interests together with the ratable portion of the associated units of Newmark Holdings exchangeable limited partnership interests, calculated in accordance with the BGC Holdings limited partnership agreement, in order to receive shares of BGC Partners common stock. Prior to the distribution, to the extent that BGC Partners receives any Newmark OpCo units as a result of any such exchange of Newmark Holdings exchangeable limited partnership interests or otherwise (as described below), then BGC Partners will contribute such Newmark OpCo units to us in exchange for a number of shares of our common stock equal to the exchange ratio, which is currentlyone-for-one, subject to adjustment (with the class of shares of our common stock corresponding to the class of shares of common stock that BGC Partners issued upon such exchange).
Partnership Enhancement Programs
We may from time to time undertake partnership redemption and compensation restructuring programs to enhance our employment arrangements by leveraging our unique partnership structure. Under these programs, participating partners generally may agree to extend the lengths
connection with compensatory arrangements.
Upon Redemption or Exchange of Newmark Holdings Founding Partner Interests
Any unit
number of Cantor units following such redemption or exchange.
March 31, 2022.
The “adjustment factor” means, with respect to any fiscal quarter in which there is reinvestment cash, an amount (which may be a positive or a negative number) equal to: (a) the reinvestment cash for such fiscal quarter,divided by(b) the Newmark OpCo per unit priceDistribution Agreement) as of the day prior to the date on which the adjustment to the exchange ratio with respect toExchange Ratio is made for such adjustment factor is made.fiscal quarter;
Current Market Price.
Reinvestments in Newmark OpCo by BGC Partners
Pursuant to the separation and distribution agreement, any net proceeds received by BGC Partners from any subsequent issuances of BGC Partners common stock (other than upon exchange of a combination of BGC Holdings exchangeable limited partnership interests and Newmark Holdings exchangeable limited partnership interests) will be, unless otherwise determined by BGC Partners’ board of directors, contributed to BGC U.S. OpCo, BGC Global OpCo and/or Newmark OpCo in exchange for (1) a BGC U.S. OpCo limited partnership interest consisting of a number of BGC U.S. OpCo units, (2) a BGC Global OpCo limited partnership interest consisting of a number of BGC Global OpCo units, and (3) a Newmark OpCo limited partnership interest consisting of a number of Newmark OpCo units, in each case calculated in accordance with the separation and distribution agreement. Any such contributions may also be made directly or indirectly into Newmark or Newmark Holdings or through BGC U.S. OpCo, BGC Global OpCo, or Newmark OpCo.
In addition, if BGC Partners exercises its right to purchase from BGC U.S. OpCo and BGC Global OpCo a number of BGC U.S. OpCo units and BGC Global OpCo units, unless otherwise determined by BGC Partners’ board of directors, BGC Partners will also purchase a certain number of Newmark OpCo units based on the then-applicable market price for shares of our Class A common stock.
For the year ended December 31, 2021 allocated expenses were $23.8 million for these services.
Transition Services Agreement
On December 13, 2017, we entered into a transition services agreement with BGC Partners which is described below.
The transition services agreement has a term of two years following the distribution, starting on the date of the separation. Any particular service provided under the transition services agreement may be cancelled by the receiving party, with at least 90 days’ prior written notice to the providing party, with no effect on the other services. The terminating party will be charged a termination fee equal to the costs incurred by the party providing services as a result of such termination, including any severance or cancellation fees.
BGC Partners is entitled to continued use of hardware and equipment it used prior to the date of the transition services agreement on the terms and conditions provided until two years following the distribution, even in the event we terminate the transition services agreement, although there is no requirement to repair or replace such hardware or equipment.
During the term of the transition services agreement, the parties will provide transition services to each other, including, among others, office space, personnel, hardware and equipment services; communication and data facilities; and any miscellaneous services to which the parties reasonably agree.
The transition services agreement includes provisions for allowing a provider or affiliate to arrange for a third party to provide for the services.
In consideration for the services provided, the providing party generally charges the other party an amount (including any applicable taxes) equal to (1) the direct cost that the providing party incurs in performing those services, including third-party charges incurred in providing services, plus (2) a reasonable allocation of other costs determined in a consistent and fair manner so as to cover the providing party’s appropriate costs or in such other manner as the parties agree.
The transition services agreement provides that the services recipient generally indemnifies the services provider for liabilities that it incurs arising from the provision of services other than liabilities arising from fraud or willful misconduct of the service provider.
BGC Partners,
Further, our regulators may require the consolidation, for regulatory purposes, of Cantor and/or its other affiliates and us or require other restructuring of the group. There is no assurance that such consolidation or restructuring would not result in a material expense or disruption to our business.
stock entitled to vote in the election of directors, we will not, and will cause our subsidiaries to not (without BGC Partners’ prior written consent) take certain actions, including, without limitation, acquiring any other businesses or assets or disposing of any of our assets, in each case with an aggregate value for all such transactions in excess of $100 million, or incurring any indebtedness, other than indebtedness not in excess of $50 million in the aggregate or any indebtedness some or all of the proceeds of which are used to repay the Term Loan, the Converted Term Loan or the BGC Notes. See “—Separation and Distribution Agreement—Operating Covenants.”
Certain Acquisitions and Dispositions of Interests
Equity Securities
Service Agreements
We have received administrative services including but not limited to, treasury, legal, accounting, information technology, payroll administration, human resources, incentive compensation plans and other support provided by Cantor and BGC Partners. Where it is possible to specifically attribute such expenses to our activities, these amounts have been expensed directly to us. Direct costs are primarily comprised of rent and equity and other incentive compensation expenses. Allocations of expenses not directly attributable to us are based on a services agreement between BGC Partners and Cantor which reflects the utilization of service provided or benefits received by us, such as headcount, square footage and revenue. For the year ended December 31, 2017, we incurred expenses of $14.2 million for these services. For the years ended December 31, 2016, 2015 and 2014, we incurred $18.0 million, $18.5 million and $11.2 million, respectively.
2021.
2021.
On March 11, 2015, we and CCRE entered into a note receivable/payable that allows for advances to or from CCRE at an interest rate of 1 month LIBOR plus 1.0%. On September 8, 2017, the note receivable/payable was terminated and all outstanding advances due were paid off. 2021.
For the year ended December 31, 2017, we purchased the primary servicing rights for $0.3 billion of loans originated by CCRE for $0.6 million.2021. We also service loans for CCRE on a “fee for service” basis, generally prior to a loan’s sale or securitization, and for which no mortgage servicing rightMSR is recognized. We recognized $2.8 million for the year ended December 31, 2017, of servicing revenuerevenues (excluding interest and placement fees) from loansservicing rights purchased from CCRE on a “fee for service” basis.
BP Transaction Agreementbasis of $3.6 million for the year ended December 31, 2021.
Berkeley Point Acquisition
Pursuant to the BP transaction agreement, BGC Partners purchased from CCRE all
Also
Under the Term Loan Credit Agreement and Revolving Credit Agreement, each as amended, BGC Partners guaranteed our repayment obligations under the Term Loan and the Converted Term Loan, respectively. As long as the Converted Term Loan remains unpaid in any portion, we will guarantee any draws by BGC Partners under the Revolving Credit Facility. Once the Term Loan and the Converted Term Loan have been paid in full, we will no longer have obligations as a borrower or as a guarantor under either the Term Loan Credit Agreement or the Revolving Credit Agreement. Upon repayment, no portion of the Term Loan or the Converted Term Loan may be reborrowed by us.
Grubb & Ellis Transaction
On April 13, 2012, we completed the acquisition of substantially all of the assets of Grubb & Ellis (which we refer to as “Grubb”). Grubb filed for protection under the U.S. Bankruptcy Code in February 2012 and sold most of its assets to us for a total consideration of approximately $47.1 million. This amount included the extinguishment of approximately $30.0 million (principal amount)pre-bankruptcy senior secured debt, which was purchased at a discount, and which had a fair value of approximately $25.6 million as of the acquisition date. The consideration transferred also included approximately $5.5 million underdebtor-in-possession loans and $16.0 million in cash to the bankruptcy estate for the benefit of Grubb’s unsecured creditors. Our Chief Financial Officer, Michael Rispoli, was the Chief Financial Officer of Grubb during this period and joined us in April 2012.
Related Party Receivables and Payables
On December 13, 2017, in connection with the separation and distribution agreement, Newmark assumed from BGC an aggregate of $300.0 million principal amount of its 5.375% Senior Notes due December 9, 2019 and $112.5 million principal amount of its 8.125% Senior Notes due June 26, 2042. As of December 31, 2017, these amounts were included in “long term debt payable to related parties” on our consolidated balance sheet.
On December 13, 2017, in connection with the separation and distribution agreement, BGC entered into an unsecured senior credit agreement with Newmark, as amended, restated, supplemented or otherwise modified from time to timeCantor (the “Intercompany“Cantor Credit Agreement”). The IntercompanyCantor Credit Agreement provides for each party to issue loans to the other party in the lender’s discretiondiscretion. Pursuant to the Cantor Credit Agreement, the parties and matures on December 13, 2018 (the “Intercompany Facility”). Thetheir respective subsidiaries (with respect to CFLP, other than BGC and its subsidiaries) may borrow up to an aggregate principal amount of $250.0 million from each other from time to time at an interest rate on the Intercompany Facilitywhich is the higher of BGC’sCFLP’s or Newmark’s short termshort-term borrowing rate then in effect, at such time plus 100 basis points. The interest rate as of December 31, 2017 was 5.21%1.0%. As of December 31, 2017, the amount2021 there were no borrowings outstanding under the Intercompany Facility was $40.0Cantor Credit Agreement.
the SPAC (the “Sponsor”), for $18.8 thousand, with Cantor retaining the remaining 25% equity interest in the Sponsor. Pursuant to an amended and restated limited liability company agreement of the Sponsor, Newmark OpCo is the managing member of the Sponsor, and Newmark OpCo and Cantor have agreed to make additional equity contributions to the Sponsor in order to fund the obligations of the Sponsor with respect to the SPAC in proportion to their equity ownership in the Sponsor. Also, in April 2021, the Sponsor agreed to lend to the SPAC up to $0.3 million without interest in order to cover expenses related to any initial public offering of the SPAC; the maturity date of the loans is the earlier of the consummation of the initial public offering of the SPAC and December 31, 2022. As of December 31, 2017,2021, there was no outstanding balance on this Pre-IPO loan.
AsCantor, on the terms that if the subsidiary monetized the sale of December 31, 2016,these assets, we would receive 10% of the related party receivables and payables were $108.8 million and $884.5 million, respectively.
Fees to related parties and allocationsproceeds of net income and grant of exchangeability to limited partnership units that are charged by BGC Partners and Cantor to us are reflected as cash flows from operating activities in our combined statement of cash flows for each period presented as if our IPO allocations and grant of exchangeability charges will becomenon-cash in nature to the extent they relate to our limited partnership units, and therefore will be excluded from cash flow operations. Prior tosale after the IPO, related party receivables were generated from our earnings as BGC Partners sweeps our excess cash to manage treasury centrally. Related party payables reflect borrowing of cash from BGC Partners to fund our operations and growth. These borrowings from and repayments to BGC Partners are reflected as cash flows from financing activities in our combined statement of cash flows for each period presented.
Loan Arrangements
For 2015, Mr. Ficarro was provided a loansubsidiary recoups its investment in the amountassets.
For 2015, Mr. Rispoli was provided30%. The arrangement includes a loanpotential profit participation consistent with other entrepreneurial arrangements in the amountevent of $192,500, pursuantcertain liquidity events related to which the actual amount of the loan when issued was $118,893, which is the result of $192,500 (the nominal gross amount) less $73,607businesses developed by him.
Charitable Donations
On November 16, 2017,by Mr. Ficarro donated an aggregate of 10,000Lutnick purchased 5,154 shares of BGC Partnersour Class A common stock to a charitable organization.
Investment Agreement
On March 7, 2018, BGC, including through its subsidiary BGC U.S. OpCo, purchased 16,606,726 newly issued exchangeable limited partnership units (the “Units”) of Newmark Holdings for approximately $242.0 million (the “Investment”). The price per Unit was based onfrom us at the $14.57 closing price of Newmark’sour Class A common stock on March 6, 2018that date of $10.67 per share. The transaction was approved by our Audit Committee.
BGC madetaxable income which was included as part of BGC’s consolidated tax return in the Investment on March 7, 2018 pursuant to an Investment Agreement, dated as of March 6, 2018, by and among BGC, BGC Holdings, BGC Partners, L.P., BGC Global Holdings, L.P., Newmark, Newmark Holdings and Newmark OpCo. The Investment and related transactions were approved by the Audit Committees of the Boards of Directors of BGC and Newmark (the “Boards”) and by the full Boards upon the recommendation of the Audit Committees.
BGC and BGC U.S. OpCo funded the Investment using the proceeds of its Controlled Equity Offering Class A common stock sales program pursuantperiods prior to the Sales Agreement dated April 1, 2017 between BGC Partners, Inc. and CF&Co. with respect to 20,000,000 sharesSpin-Off.
ITEM 14. | PRINCIPAL ACCOUNTANT FEES AND SERVICES |
Year Ended December 31, | ||||||||
2017 | 2016 | |||||||
Audit fees | $ | 1,725,025 | $ | 1,317,190 | ||||
Audit-related fees | — | — | ||||||
Tax fees | — | — | ||||||
All other fees | — | — | ||||||
|
|
|
| |||||
Total | $ | 1,725,025 | $ | 1,317,190 |
2021:
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 | ||||||
(a) (3) The following Exhibits are filed as part of this Amendment No. 1 to Annual Report on Form10-K/A as required by RegulationS-K.
Newmark Group, Inc. | ||
By: | /s/ | |
Name: | Howard W. Lutnick | |
Title: | Chairman |
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