| As of December 31, 2019, each of Mr. Costos, Mr. Hersch, Ms. Rafferty, Mr. Ryan and Mr. Whitney owned 2,781, 1,262, 1,229, 2,410 and 1,229 unvested restricted stock units, respectively. These amounts include restricted stock units credited as dividend equivalents on the underlying restricted stock units held by Mr. Costos, Mr. Hersch, Ms. Rafferty, Mr. Ryan and Mr. Whitney each owned 2,416 unvested restricted stock units. These amounts include restricted stock units credited as dividend equivalents on the underlying restricted stock units held by Ms. Rafferty and Messrs. Costos, Hersch, Ryan and Whitney in connection with dividends paid by the company to holders of its Class A common stock. Credited dividend equivalents are subject to the same terms and conditions as the underlying restricted stock units. (2) | Mr. Costos joined our Board of Directors in February 2017. Therefore, the amount reported for Mr. Costos reflects thepro-rated portion of his annual cash retainer earned from the date of appointment.
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COMPENSATION OF OUR EXECUTIVE OFFICERS Compensation Discussion and Analysis This section of our Proxy Statement discusses the principles underlying our executive compensation policies and decisions. In addition, this section provides qualitative information about the manner and context in which compensation is awarded to, and earned by, our Named Executive Officers, and places in context the data presented in the tables and narrative that follow. Throughout this Proxy Statement, our Named Executive Officers for the fiscal year ended December 31, 20172019 are as follows: Paul J. Taubman, our Chairman and Chief Executive Officer;CEO;Ji-Yeun Lee, our Managing Partner; Helen T. Meates, our Chief Financial Officer; and James W. Cuminale, our General Counsel (our “Named Executive Officers”). 20172019 Compensation Highlights
Mr. Taubman’s compensation continues to be based on a framework such that Mr. Taubman will receive an annual base salary of $1,000,000 through October 1, 2021, with no expectation of additional incentive compensation grants during this time-period. Base salaries for Ms. Lee, Ms. Meates and Mr. Cuminale remained flat in 2019 compared with 2018. Total awarded compensation for our Named Executive OfficersMs. Lee was flat for 2017the 2019 performance year compared towith the 2018 performance year. Ms. Lee’s total awarded compensation has been flat since the 2016 performance year. Total awarded compensation for Ms. Meates and Mr. Cuminale increased for the 2019 performance year compared with the 2018 performance year, reflective of firm-wide and individual performance and relative market positioning. Prior to the 2019 increase, total awarded compensation for Ms. Meates and Mr. Cuminale had been flat since the 2016 performance year. A significant portion of the total compensation paid to our Named Executive Officers was delivered as long-term incentive equity awards that vest over three years. For performance year 2019, the percentage of the Named Executive Officer’s total annual incentive compensation that was delivered as a long-term incentive in the form of restricted stock units that vest over three yearswas 47% for Ms. Lee, 42% for Ms. Meates and 39% for Mr. Cuminale. Our compensation structures are designedcontinue to encourage a focus on sustainable franchise growth and collaboration, and do not include individual revenuepay-outspay-outs. Long-term incentive compensation is subject to clawback provisions that can be applied in appropriate circumstancescircumstances. With respect to our 2019non-binding, advisory shareholder vote on executive compensation, or say on pay, our shareholders overwhelmingly approved our executive compensation program with over 96% of voted shares cast in favor of the say on pay proposal. We engage an independent compensation consultant to advisebelieve these results reflect strong shareholder support for our Compensation Committee, which is comprised solely of independent directors The independent compensation consultant performs a compensation benchmarking analysis using available data to ensure thatpay-for-performance linkage and our compensation programs are competitive with thosestructure that facilitates it, and therefore underscore the endorsement by our shareholders of other independent investment banksthe alignment between our executive compensation and performance.
Compensation Philosophy Our executive compensation program considers firm-wide financial measures to ensure alignment with stockholdersshareholders and a cohesive working environment amongstamong senior executives, in addition to goals targeted to each of the Named Executive Officers. In order toTo ensure that we are able to attract and retain executives and other professionals that will contribute to the long-term success of PJT Partners, our compensation program for the firm overall also aims to be market-competitive versus our peers (in both quantum and structure).
In order to meet these objectives, our compensation program includes: annual incentive compensation that places a strong emphasis on firm-wide financial performance, with the flexibility to assess company and individual performance; an appropriate link between compensation and the creation of stockholdershareholder value through equity awards; a focus on sustainable franchise growth and collaboration, and therefore does not include individual revenuepay-outs; recognition of the contribution to the firm’s goals of employee development (including a focus on leadership, diversity and inclusion); adherence to the firm’s culture of compliance with the many rules and regulations pertinent to the financial services industry; long-term incentives that do not promote excessive risk-taking.risk-taking; and a benchmarking analysis to help us understand compensation practices of our competitors. Roles of our Compensation Committee, Compensation Consultant and Management Compensation Committee Our Compensation Committee is comprised entirely of independent directors. Our Compensation Committee has overall responsibility for monitoring the performance of our Named Executive Officers and evaluating and approving our executive compensation plans, policies and programs. In addition, our Compensation Committee oversees the Omnibus Incentive Plan. Through October 1, 2018, Mr. Taubman is paid in accordance with his Partner Agreement (see “Narrative Disclosure RelatingWith respect to the Summarycompensation paid to our Chairman and CEO, our Compensation TableCommittee reviews and approves all components of Mr. Taubman’s compensation and ensures that compensation aligns with the Grants of Plan-Based Awards Table—Partner Agreements—Partner Agreements with Paul J. Taubman”).company’s strategic plan. With respect to the other Named Executive Officers, our Compensation Committee seeks input from our Chief Executive Officer,Chairman and CEO, reviews and approves all components of our other Named Executive Officers’ compensation and ensures that compensation aligns with the company’s strategic plan.
Compensation ConsultantUse of Independent Advisor
Since 2016, ourOur Compensation Committee has engaged Willis Towers Watson & Co., an outside compensation consultant, to provide guidance with respect to the development and implementation of our compensation programs. Willis Towers Watson provides our Compensation Committee with advice concerning the types and levels of compensation to be paid to our Named Executive Officers. Willis Towers Watson provides the committee with peer executive andnon-employee director compensation data, as well as expertise and advice on various matters brought before the
committee. The Compensation Committee utilizes Willis Towers Watson’s advice and insights to inform the eventual decision making process. Willis Towers Watson also assists management and the Compensation Committee by providing market data on the compensation practices and programs of our peer competitors and guidance on industry trends and best practices. The Compensation Committee has the sole authority to retain and terminate the independent compensation consultant and approve fees and other engagement terms. Our Compensation Committee requires that its consultant be independent of company management. Our Compensation Committee performs an annual assessment of the consultant’s independence to determine whether the consultant is independent. Our Compensation Committee most recently assessedIn assessing Willis Towers Watson’s independence, on February 22, 2018the Committee considered the six independence factors for compensation consultants listed in the NYSE listing requirements and confirmeddetermined that the work provided by Willis Towers Watson is independent and that Willis Towers Watson’s work hasdid not raisedraise any conflict of interests.interest. Management Our Chief Executive OfficerCEO attends Compensation Committee meetings, provides information as to the individual performance of the other Named Executive Officers and makes annual recommendations to our Compensation Committee of appropriate compensation levels. He also develops annual performance goals focused on the company’s tactical and strategic objectives against which our Named Executive Officers will generally be measured. Our Chief Executive OfficerCEO and our Global Head of Human Resources present an evaluation against those objectives to the Compensation Committee as part of the annual compensation process. The broader population compensation pool funding and structure is assessed considering the company’s tactical and strategic objectives as well as the performance of each business and is presented by our Chief Executive OfficerCEO and our Global Head of Human Resources to the Compensation Committee for approval. All components of our Named Executive Officers’ compensation must be approved by our Compensation Committee in its sole discretion. Benchmarking Process In developing our compensation programs, our Compensation Committee commissions a compensation benchmarking analysis to ensure that our programs are competitive with those of other independent investment banks, including consideration of the cost of equivalent talent in the markets in which we operate. Our Compensation Committee reviews our Named Executive Officer compensation in relation to other financial institutions, working with Willis Towers Watson, whowhich provides market data and practices for consideration, as well as executive compensation trends and developments. The available data reviewedOne of the challenges for PJT when establishing its peer group is the limited number of directly comparable organizations. Part of the Compensation Committee’s overall review of the executive compensation program over the past several years has included that of independentdeveloping underlying principles for identifying peers. These principles include operating in similar or comparable industry segments: investment banks as well as relevant roles at bulge brackets firms occupied by similarly experiencedbanking, comparable in size and scope and competitors for talent. The public competitors considered within the independent investment bank benchmarking data included Evercore Inc., Greenhill & Co., Inc., Houlihan Lokey, Inc., Lazard Ltd, and Moelis & Company. The members of our peer group are reviewed each year to determine relevance of the peer set while taking into consideration data availability.included: 2019 Compensation Peer Group | | | • Cowen Inc. • Evercore Inc. • Greenhill & Co | | • Houlihan Lokey, Inc. • Lazard Ltd • Moelis & Company |
For purposes of determining our overall level of executive compensation (i.e.(i.e., base salary and annual incentive compensation), our Compensation Committee generally reviews compensation in light of peer group anticipated median compensation levels, but does not limit target setting to a particular peer group percentile.percentile mechanically. Our Compensation Committee also takes into account other factors, including the executive’s role and experience, as compared to our peers’ executives. Ultimately, our Compensation Committee believes that appropriate compensation for a particular executive should be made based on the full review of company and individual performance, while also considering market data. Overall, as set forth below in “Elements of Our Compensation Program,” Willis Towers Watson determined that our executive compensation programs, as structured, are appropriately competitive relative to our peers. Elements of Our Compensation Program Compensation provided to our Named Executive Officers consists of base salary, annual incentive compensation, which includes cash bonus and long-term incentive awards granted in the form of restricted stock units, and other perquisites and benefits, each of which is described in more detail below. Base Salary The base salary payable to each Named Executive Officer provides a fixed component of compensation that reflects the executive’s position and responsibilities. Base salaries are reviewed annually by our Compensation Committee and may be adjusted to better match competitive market levels or to recognize an executive’s professional growth, development and increased responsibility. 20172019 Base Salaries.Salaries. We provided an annual base salary of $1,000,000, $1,000,000, $500,000 and $500,000 to each of Mr. Taubman, Ms. Lee, Ms. Meates and Mr. Cuminale, respectively. The amount of the base salary for the Named Executive Officers is set in accordance with the terms of their respective partner agreements with us, and may be adjusted from time to time in accordance with those agreements. These base salaries have not been adjusted since October 1, 2015 for Mr. Taubman, January 1, 2016 for Ms. Lee, October 1, 2015 for Ms. Meates and January 1, 2017 for Mr. Cuminale.
Annual Incentive Compensation Named Executive Officers are eligible to receive discretionary compensation on an annual basis to incentivize the achievement of key short- and long-term corporate strategic goals and to motivate certain desired individual behaviors. We do not set specific quantitative performance targets upon which the annual incentive compensation paid to our Named Executive Officers would become payable. Instead, the annual incentive compensation paid to our Named Executive Officers is determined based on a performance evaluation conducted by our Compensation Committee with the assistance of Mr. Taubman and our Head of Human Resources, other(other than with respect to compensation to be paid to Mr. Taubman.Taubman) and our Global Head of Human Resources. A portion of the annual incentive compensation is paid in cash and a portion is paid in the form of long-term incentive awards granted in the form of restricted stock units. The evaluation with respect to the annual incentive compensation paid to Ms. Lee, Ms. Meates and Mr. Cuminale for the 20172019 performance year involved an analysis of both (i) our overallfirm-wide company performance and (ii) the performance of the individual officer and his or her contributions to the company, including consideration of role-specific goals previously agreed to by the Compensation Committee. Overall company performance: The Compensation Committee’s executive compensation decisions consider firm-wide financial performance as a collective measure to ensure alignment with shareholders and to foster a cohesive working environment amongstamong senior executives. With respect to overall company performance, the factors considered for our Named Executive Officers were: operating revenue growth; adjustedpre-tax income; adjusted net income per share; and share price performance.performance, in each case taking into consideration performance versus the independent investment bank peers discussed above. Performance of the individual Named Executive Officer: Individual, role-specific performance goals have been identified as goals where the Named Executive Officer is most able to influence the relevant outcome, acknowledging they may not be solely responsible for such outcomes and that success against these goals is also the collective responsibility of the executive team. In defining these goals we have also considered their relevance to the stage of the company’s development.team and broader firm management. Ji-Yeun Lee: With respect to individual performance, the factors considered for Ms. Lee were her leadership and executive management role with our company, including: effectivelystrong leadership of the corporate functions; identifying opportunities for collaboration that have shown clear evidence of driving collaboration across businesses and corporate functions;cross-firm revenue generating opportunities; continued success in the attraction and retention of top talent to the company; and momentumfirm in our2019; taking a lead role in business selection; the continued growth of the Strategic Advisory buildout.business, including meaningful progress made in 2019 in its contribution to the overall success of the firm; and overseeing senior management focus and accountability on enterprise risk. Helen T. Meates: With respect to Ms. Meates, factors considered included: Ms. Meates’s leadership and oversight of our global finance function, including accurate reporting of financial results and compliance with public company requirements; the continued building and maintainingmaintenance of relationships with our investors;investors, clients, equity research community, auditors and regulators; continued refinement of the Financial Planning & Analysis models we use to forecast across the company; providing the necessary tools and analytics to facilitate effective guardianship of ournon-compensation costs.costs; and, in 2019, expanding her role by taking over leadership of our information technology function. James W. Cuminale: With respect to Mr. Cuminale, factors considered included: Mr. Cuminale’s leadership and oversight of our global legal and compliance functions;functions including the attraction of additional legal talent in 2019; effectively managing the firm’s risk exposure to any potential litigation and regulatory matters; and effectively developingoverseeing the firm’s compliance culture.culture; and advising our bankers with appropriate legal and regulatory advice from a deal perspective. Cash Bonus.Bonus. The portion of each Named Executive Officer’s 20172019 annual incentive compensation paid in cash was as follows: Ms. Lee—$1,562,500;1,867,500; Ms. Meates—$1,037,500;1,442,500; and Mr. Cuminale—$900,000.1,167,500. A portion of the cash bonus paid to Ms. Lee ($400,000) and Ms. Meates ($275,000) is subject to pro rata repayment in the event such Named Executive Officer’s services are terminated by the company for Cause (as defined below) or the Named Executive Officer resigns his or her services to the company for any reason within the next three years. Mr. Taubman has not received any cash compensation in excess of base salary with respect to performance years 2015 through 2017, and we do not anticipate paying Mr. Taubman annual incentive compensation through October 1, 2018, the third anniversary of the closing of ourspin-off, in accordance with the terms of Mr. Taubman’s Partner Agreement.2019. Long-Term Incentive Awards.Awards. The Compensation Committee believes that a substantial portion of each Named Executive Officer’s annual incentive compensation (other than Mr. Taubman, who received a $1,000,000 base salary as referenced above) should be in the form of long-term incentive awards which forin the form of either LTIP Units or restricted stock units. For performance year 2017 were granted2019, the percentage of the Named Executive Officer’s total annual incentive compensation that was delivered as a long-term incentive in the form of restricted stock units that will be satisfied by delivery of shares of our Class A common stock in equal annual installments over a three year vesting period. was 47% for Ms. Lee, 42% for Ms. Meates and 39% for Mr. Cuminale. Long-term incentive awards encourage management to create stockholdershareholder value over the long term, because the value of the equity awards is directly attributable to the price of our Class A common stock over time. In addition, equity awards are an effective tool for management retention because full vesting of the awards generally requires continued employment for multiple years. Long-term incentive awards for performance year 2019 were granted to Ms. Lee, Ms. Meates and Mr. Cuminale in the form of restricted stock units that will be satisfied by delivery of shares of our Class A common stock in equal annual installments over a three year vesting period. The portion of each Named Executive Officer’s 2017of Ms. Lee’s, Ms. Meates’s and Mr. Cuminale’s 2019 annual incentive bonuscompensation paid in the form of restricted stock units was as follows: Ms. Lee—$1,937,500;1,632,500; Ms. Meates—$962,500;1,057,500; and Mr. Cuminale—$850,000. The restricted stock units were granted on February 13, 2018.732,500. As these restricted stock units were granted in 2018,2020, pursuant to the rules of the SEC, the grant date fair value of these restricted stock unit awards will be reflected in the “Stock Awards” column in the “Summary Compensation Table” for 2018.2020. For performance year 2017, the percentage of the Named Executive Officer’s total annual incentive compensation that was delivered as a long-term incentive in the form of restricted stock units was approximately 55% for Ms. Lee, 48% for Ms. Meates and 49% for Mr. Cuminale.
Alternative Presentation of Annual Compensation The following table is presented to show how our Compensation Committee viewed 2017 to 2019 annual compensation for our Named Executive Officers, with respect to their 2017 performance, and includes base salary as well as cash bonus and long-term incentive awards with respect to their 2017 performance, which was granted in February 2018.as part of annual incentive compensation. This table differs substantially from the “Summary Compensation Table” below and is not a substitute for that table. TheUnlike the “Summary Compensation Table” provides compensation information as required by SEC regulations, and thereforeTable,” which reflects for 2017 the grant date fair value of long-term incentive awards granted during the 2017applicable calendar year (i.e., those(whether or not such awards were granted in February 2017 with respect to 2016 performance)the performance for such year), while not including the long-termfollowing table reflects, with respect to Ms. Lee, Ms. Meates and Mr. Cuminale, the dollar amounts of the annual incentive awardscompensation paid in the form of restricted stock units with respect to each applicable performance year (e.g., for 2019, the dollar amount of the restricted stock units that will actually be granted in February2020 with respect to 2019 performance). In addition, this table includes the grant value of that portion of theone-time grant of 60,000 LTIP Units awarded to Mr. Taubman in September 2018 for the period from October 1, 2018 to December 31, 2018 with respect to 2017 performance.performance year 2018 and for the period from January 1, 2019 to December 31, 2019 with respect to performance year 2019, as this award was intended by the Compensation Committee to serve as additional compensation for the three-year period from October 1, 2018 to October 1, 2021. | | | | | | | | | | | Name and Principal Position | | Year | | Salary
$ | | Cash Bonus(1)
$ | | Stock
Awards
$ | | Total(2)
$ | Paul J. Taubman | | 2017 | | 1,000,000 | | — | | — | | 1,000,000 | Chairman and CEO | | 2016 | | 1,000,000 | | — | | — | | 1,000,000 | | | 2015 | | 1,000,000 | | — | | — | | 1,000,000 | | | | | | | Ji-Yeun Lee | | 2017 | | 1,000,000 | | 1,562,500 | | 1,937,500 | | 4,500,000 | Managing Partner | | 2016 | | 1,000,000 | | 2,850,200 | | 649,800 | | 4,500,000 | | | 2015 | | 350,000 | | 650,000 | | — | | 1,000,000 | | | | | | | Helen T. Meates | | 2017 | | 500,000 | | 1,037,500 | | 962,500 | | 2,500,000 | Chief Financial Officer | | 2016 | | 500,000 | | 1,694,538 | | 305,462 | | 2,500,000 | | | 2015 | | 500,000 | | 1,750,000 | | — | | 2,250,000 | | | | | | | James W. Cuminale | | 2017 | | 500,000 | | 900,000 | | 850,000 | | 2,250,000 | General Counsel | | 2016 | | 350,000 | | 1,614,532 | | 285,468 | | 2,250,000 | | | 2015 | | 350,000 | | 1,562,500 | | — | | 1,912,500 |
| | | | | | | | | | | | | | | | | | | | | Name and Principal Position | | Year | | | Salary $ | | | Cash
Bonus $ | | | Stock
Awards(1) $ | | | Total $ | | Paul J. Taubman Chairman and CEO | | | 2019 | | | | 1,000,000 | | | | — | | | | 1,066,000 | | | | 2,066,000 | | | | | 2018 | | | | 1,000,000 | | | | — | | | | 266,500 | | | | 1,266,500 | | | | | | 2017 | | | | 1,000,000 | | | | — | | | | — | | | | 1,000,000 | | Ji-Yeun Lee Managing Partner | | | 2019 | | | | 1,000,000 | | | | 1,867,500 | | | | 1,632,500 | | | | 4,500,000 | | | | | 2018 | | | | 1,000,000 | | | | 2,037,500 | | | | 1,462,500 | | | | 4,500,000 | | | | | | 2017 | | | | 1,000,000 | | | | 1,562,500 | | | | 1,937,500 | | | | 4,500,000 | | Helen T. Meates Chief Financial Officer | | | 2019 | | | | 500,000 | | | | 1,442,500 | | | | 1,057,500 | | | | 3,000,000 | | | | | 2018 | | | | 500,000 | | | | 1,312,500 | | | | 687,500 | | | | 2,500,000 | | | | | | 2017 | | | | 500,000 | | | | 1,037,500 | | | | 962,500 | | | | 2,500,000 | | James W. Cuminale General Counsel | | | 2019 | | | | 500,000 | | | | 1,167,500 | | | | 732,500 | | | | 2,400,000 | | | | | 2018 | | | | 500,000 | | | | 1,175,000 | | | | 575,000 | | | | 2,250,000 | | | | | | 2017 | | | | 500,000 | | | | 900,000 | | | | 850,000 | | | | 2,250,000 | |
| (1) | For 2016 performance year, a portionThe dollar amounts of the cash bonus was paidrestricted stock units and/or LTIP units included in this column may differ from the grant date fair values of such awards as computed in accordance with GAAP and reported in the form of restricted cash subject to forfeiture over a three year period as follows: Ms. Lee—$812,700; Ms. Meates—$382,038 and Mr. Cuminale—$357,032. For 2015 performance year, a portion of the cash bonus was paid in the form of restricted cash subject to forfeiture over a three year period as follows: Ms. Lee—$120,000; Ms. Meates—$575,000 and Mr. Cuminale—$490,625.
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| (2) | Mr. Cuminale’s 2015 total compensation was adjusted from an annualized rate of $2,250,000 in consideration of his joining the company during the calendar year.“Summary Compensation Table.”
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Retirement Arrangements We have a 401(k) savings plan for eligible employees, including our Named Executive Officers, and may, in our sole discretion, provide annual matching contributions to certain 401(k) plan participants. We currently do not offer matching contributions to our Named Executive Officers. Employee Benefits Eligible employees, including our Named Executive Officers, participate in broad-based and comprehensive employee benefit programs, including medical, dental, vision, life and disability insurance coverage. Our Named Executive Officers participate in these programs on the same basis as eligible employees generally, but the company does not pay for any portion of such employee benefits for partners, including our Named Executive Officers. We make available to our partners, including our Named Executive Officers, financial planning services at a cost of $15,000 annually per partner paid by the company. In 2019, Mr. Taubman, Ms. Lee and Ms. Meates took advantage of this service. In addition, we make available to our partners, including our Named Executive Officers, personal use of a company leased business aircraft when the aircraft is not being used for business purposes, for which the Named Executive Officers pay the full incremental costs associated with such use. On occasion, certainfamily members of our Named Executive Officers and their familiesalso may make use of aircraft procured by the company, and any such personal use is charged toaccompany the Named Executive Officer basedOfficers on market rates and usage.the company leased business aircraft when the aircraft is being used for business purposes at de minimis incremental cost to us. Compensation Program Governance Features Clawback Policy Pursuant to the terms of the Omnibus Incentive Plan, all awards are subject to reduction, cancellation, forfeiture or recoupment to the extent necessary to comply with (i) any clawback, forfeiture or other similar policy adopted by our Board or the Compensation Committee and as in effect from time to time, and (ii) applicable law. To the extent that a participant receives any amount in excess of the amount that the participant should otherwise have received under the terms of the award for any reason (including, without limitation, by reason of a financial restatement, mistake in calculations or other administrative error), the participant will be required to repay any such excess amount to the company. Further, pursuant to the terms of the Omnibus Incentive Plan, to the extent a participant engages in (i) unauthorized disclosure of any confidential or proprietary information of the company; (ii) any activity that would be grounds to terminate the participant’s employment for Cause (as defined in the Omnibus Incentive Plan); or (iii) the breach of any noncompetition, nonsolicitation or other agreement containing restrictive covenants, the Compensation Committee may, in its sole discretion, provide for one or both of the following: cancellation of any or all of such participant’s outstanding awards, or forfeiture by the participant of any gain realized on the vesting or exercise of awards, and to repay any such gain promptly to the company. We have also incorporated rigorous clawback provisions in the PJT Partners Inc. 2015 Bonus Deferral Plan (the “Bonus Deferral Plan”),. Pursuant to the terms of the Bonus Deferral Plan, if at any time before an applicable restricted stock unit vesting date, the Compensation Committee determines, in its sole and absolute discretion, that any of the following events has occurred, the company is authorized to cancel (and the employee would forfeit) an appropriate portion of the then unvested portion of the employee’s award granted pursuant to the Bonus Deferral Plan and any rights to dividend equivalents thereon: misconduct by the employee in taking actions, or failing to take actions, that result in, or reasonably could be expected to result in, material detriment to the company or its business activities, including, without limitation, financial or reputational harm to the company or its business activities; fraud, material misrepresentation or other dishonest acts by the employee which resulted in a determination by the Compensation Committee of an amount of such employee’s annual bonus that was greater than the amount the employee would have otherwise been entitled to but for such fraud, material misrepresentation or other dishonest act; the employee’s gross negligence in, or other impropriety related to (including any failure to monitor or discharge supervisory or managerial responsibilities), failing to timely and reasonably identify, raise or assess issues and/or concerns with respect to risks material to the company or its business activities; or following the termination of the employee’s employment, the company determines that such employee’s employment could have been terminated by the company for cause. Nothing contained in the Bonus Deferral Plan limits or restricts the company from seeking repayment of any vested portions of an award made pursuant to the Bonus Deferral Plan already distributed to an employee, pursuant to any applicable clawback requirements imposed under applicable laws, rules and regulations. Accordingly, the clawback provisions contained in the Bonus Deferral Plan shall (i) be in addition to the requirements of Section 304 of the Sarbanes-Oxley Act of 2002 that are applicable to our Chief Executive Officer and Chief Financial Officer and (ii) otherwise be deemed automatically amended to include the requirements of Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, as it may be amended from time to time, and any related rules or regulations promulgated by the SEC or the NYSE. Our Compensation Committee intends to periodically review this clawback policy and, as appropriate, conform it to any applicable final rules adopted pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act. Hedging and Pledging of our Securities Our directors and employees, including our Named Executive Officers, are prohibited from engaging in a transaction meant to hedge or minimize losses in our securities, including engaging in transactions in forward contracts, equity swaps, collars, exchange funds, puts, calls, oroptions and other derivatives on our securities, or short-selling our securities. Our directors and employees, including our Named Executive Officers, are prohibited from pledging our securities as collateral for a loan unless such pledging is approved by our General Counsel. Minimum Equity Ownership Guidelines for Executive Officers In February 2018, ourOur Compensation Committee adoptedhas implemented minimum equity ownership guidelines that require each Named Executive Officer to maintain equity ownership in the company (including Partnership Units, LTIP Units or restricted stock units) having a market value equal to or greater than a multiple of such Named Executive Officer’s base salary (ten times base salary for the Chairman and Chief Executive OfficerCEO and five times base salary for the other Named Executive Officers). Each executive officerNamed Executive Officer must achieve the minimum equity investment within five years from the later of the adoption of the guidelines (for Named Executive Officers in place at that time of the adoption of the guidelines) and the date of such Named Executive Officer’s appointment (for subsequently appointed Named Executive Officers).
| | | | | Named Executive Officer/Director
| | Ownership
Requirement Multiple
| | Ownership
Requirement Value
| Paul J. Taubman
| | 10X Base Salary | | $10,000,000 | Ji-Yeun Lee
| | 5X Base Salary | | $5,000,000 | Helen T. Meates
| | 5X Base Salary | | $2,500,000 | James W. Cuminale
| | 5X Base Salary | | $2,500,000 |
Our Compensation Committee also adopted minimum equity ownership guidelines for ournon-management directors. See “Compensation of Directors—Minimum Equity Ownership Guidelines” above. | | | | | | | Named Executive Officer | | Ownership
Requirement
Multiple | | Ownership
Requirement
Value | | Paul J. Taubman | | 10X Base Salary | | $ | 10,000,000 | | Ji-Yeun Lee | | 5X Base Salary | | $ | 5,000,000 | | Helen T. Meates | | 5X Base Salary | | $ | 2,500,000 | | James W. Cuminale | | 5X Base Salary | | $ | 2,500,000 | |
Vesting of Equity Awards Our practice is to grant equity awards to our Named Executive Officers that generally vest over a period of several years, with the vesting of the first tranche of any such equity award at least one year from the grant date. No Individual RevenuePay-Outs We have a no individual revenuepay-outs philosophy as it relates to annual incentive compensation, and no contractual entitlement to severance. To provide further flexibility with respect to employment and compensation matters, we maintain a flexible termination practice with no contractual rights to continued employment (other than for a notice and garden leave period) and no contractual right to severance upon termination. Risk Considerations in ourOur Compensation Programs Our Compensation Committee has discussed the concept of risk as it relates to our compensation programs with management and Willis Towers Watson, and our Compensation Committee does not believe the goals or the underlying philosophy of our compensation programs encourage excessive or inappropriate risk taking. Our discretionary compensation program is designed to reflect the performance of our firm and the performance of the individual employee, and we believe its design discourages excessive risk taking. For example, paying a significant portion of discretionary compensation in the form of equity awards, all with multi-year vesting periods, encourages each of our senior professionals to be sensitive to long-term risk outcomes, as the value of their awards increase or decrease with the price of our Class A common stock. Our Named Executive Officers are prohibited from hedging their shares of our Class A common stock and from pledging such shares withoutpre-approval of our General Counsel. We believe these criteria will provide our employees additional incentives to prudently manage the range of risks inherent in our business. Based on this, we do not believe that our compensation policies and practices create risks that are reasonably likely to have a material adverse effect on the company. Award Timing
Annual equity awards were granted to Named Executive Officers and all other PJT Partners employees on February 13, 2018 following the company’s public announcement of its financial results for the prior fiscal year. The equity awards were delivered in the form of restricted stock units with aggregate number of restricted stock units determined on the basis of the average closing price of a share of Class A common stock over the five trading days immediately prior to and the five trading days immediately following the date that PJT Partners first publicly issued its earnings release for full year 2017, with grants made effective the final day of this window.
REPORT OF THE COMPENSATION COMMITTEE The following Compensation Committee report to stockholdersshareholders shall not, in accordance with the rules of the SEC, be incorporated by reference into any of our future filings made under the Exchange Act or under the Securities Act, and shall not be deemed to be soliciting material or to be filed under the Exchange Act or the Securities Act. Our Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of RegulationS-K with management and, based on such review and discussions, our Compensation Committee recommended to our Board of Directors that our Compensation Discussion and Analysis be included in this Proxy Statement. Submitted by our Compensation Committee: Thomas M. Ryan, Chair Dennis S. Hersch Summary Compensation Table The following table summarizes the total compensation paid to or earned by each of our Named Executive Officers in respect of fiscal years 2015, 20162017, 2018 and 2017,2019 under the rules of the SEC. | | | | | | | | | | | Name and Principal Position | | Year | | Salary
$ | | Bonus(1)
$ | | Stock
Awards(2)
$ | | Total
$ | Paul J. Taubman | | 2017 | | 1,000,000 | | — | | — | | 1,000,000 | Chairman and CEO | | 2016 | | 1,000,000 | | — | | — | | 1,000,000 | | | 2015 | | 250,000 | | — | | 75,202,100 | | 75,452,100 | | | | | | | Ji-Yeun Lee | | 2017 | | 1,000,000 | | 1,562,500 | | 649,800 | | 3,212,300 | Managing Partner | | 2016 | | 1,000,000 | | 2,850,200 | | — | | 3,850,200 | | | 2015 | | 87,500 | | 650,000 | | 12,272,950 | | 13,010,450 | | | | | | | Helen T. Meates | | 2017 | | 500,000 | | 1,037,500 | | 305,462 | | 1,842,962 | Chief Financial Officer | | 2016 | | 500,000 | | 1,694,538 | | — | | 2,194,538 | | | 2015 | | 125,000 | | 1,750,000 | | 2,386,100 | | 4,261,100 | | | | | | | James W. Cuminale | | 2017 | | 500,000 | | 900,000 | | 285,468 | | 1,685,468 | General Counsel | | 2016 | | 350,000 | | 1,614,532 | | — | | 1,964,532 | | | 2015 | | 87,500 | | 1,562,500 | | 2,529,150 | | 4,179,150 |
| | | | | | | | | | | | | | | | | | | | | | | | | Name and Principal Position | | Year | | | Salary $ | | | Bonus(1) $ | | | Stock
Awards(2) $ | | | Other(3) $ | | | Total $ | | Paul J. Taubman Chairman and CEO | | | 2019 | | | | 1,000,000 | | | | — | | | | — | | | | 15,000 | | | | 1,015,000 | | | | | 2018 | | | | 1,000,000 | | | | — | | | | 3,198,000 | | | | 15,000 | | | | 4,213,000 | | | | | | 2017 | | | | 1,000,000 | | | | — | | | | — | | | | — | | | | 1,000,000 | | Ji-Yeun Lee Managing Partner | | | 2019 | | | | 1,000,000 | | | | 1,867,500 | | | | 1,437,758 | | | | 15,000 | | | | 4,320,258 | | | | | 2018 | | | | 1,000,000 | | | | 2,037,500 | | | | 1,977,836 | | | | 15,000 | | | | 5,030,336 | | | | | | 2017 | | | | 1,000,000 | | | | 1,562,500 | | | | 702,112 | | | | — | | | | 3,264,612 | | Helen T. Meates Chief Financial Officer | | | 2019 | | | | 500,000 | | | | 1,442,500 | | | | 675,889 | | | | 15,000 | | | | 2,633,389 | | | | | 2018 | | | | 500,000 | | | | 1,312,500 | | | | 982,559 | | | | 15,000 | | | | 2,810,059 | | | | | | 2017 | | | | 500,000 | | | | 1,037,500 | | | | 330,050 | | | | — | | | | 1,867,550 | | James W. Cuminale General Counsel | | | 2019 | | | | 500,000 | | | | 1,167,500 | | | | 565,276 | | | | — | | | | 2,232,776 | | | | | 2018 | | | | 500,000 | | | | 1,175,000 | | | | 867,723 | | | | — | | | | 2,542,723 | | | | | | 2017 | | | | 500,000 | | | | 900,000 | | | | 308,457 | | | | — | | | | 1,708,457 | |
| (1) | 20172019 amounts represent the cash component of the annual incentive compensation earned for 20172019 performance and paid in the following year. A portion of the cash bonus paid to Ms. Lee ($400,000) and Ms. Meates ($275,000) is subject to pro rata repayment in the event such Named Executive Officer’s services are terminated by the company for Cause (as defined below) or the Named Executive Officer resigns his or her services to the company for any reason within the next three years. The remainder of the 20172019 performance year annual incentive compensation was paid in the form of restricted stock units, as discussed above in “Executive“Elements of Our Compensation Elements—Program—Annual Incentive Compensation—Long-Term Incentive Awards.” As these restricted stock units wereare granted on February 13, 2018,in 2020, pursuant to the rules of the SEC, the bonus amounts reported for 20172019 for Ms. Lee, Ms. Meates and Mr. Cuminale do not include their respective portion of the annual incentive compensation that was paid in restricted stock units. The amounts grantedpaid in the form of restricted stock units for performance year 20172019 were as follows: Ms. Lee—$1,937,500,1,632,500; Ms. Meates—$962,500,1,057,500; and Mr. Cuminale—$850,000.732,500.
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| (2) | The amounts included in this column represent the aggregate grant date fair value of the equity awards computed in accordance with ASC Topic 718. A discussion of the assumptions used in calculating these |
| values can be found in Note 1011 to our 20172019 audited financial statements included in our Annual Report on Form10-K for the year ended December 31, 2017.2019. For 2017,2019, the value represents the grant of restricted stock units on February 15, 2017May 1, 2019 for the 20162018 performance year.year for Ms. Lee, Ms. Meates and Mr. Cuminale that generally vestone-third ratably on each of March 1, 2020, 2021 and 2022, subject to continuous employment. |
| (3) | We make available to our partners, including our Named Executive Officers, financial planning services at a cost of $15,000 annually per partner paid by the company. In 2019, Mr. Taubman, Ms. Lee and Ms. Meates took advantage of this service. In addition, we make available to our partners, including our Named Executive Officers, personal use of a company leased business |
| aircraft when the aircraft is not being used for business purposes, for which the Named Executive Officers pay the full incremental costs associated with such use. On occasion, family members of our Named Executive Officers also may accompany the Named Executive Officers on the company leased business aircraft when the aircraft is being used for business purposes at de minimis incremental cost to us. |
Grants of Plan-Based Awards in 20172019 The following table discloses the number of plan-based awards granted in 20172019 to our Named Executive Officers and the grant date fair value of these awards. | | | | | | | | | Name | | Grant Date | | Action Date(1) | | All Other Stock Awards:
Number of Shares of
Stock or Stock Units(2)
(#) | | Grant Date Fair
Value of Stock
and Option Awards(3)
($) | Paul J. Taubman | | — | | — | | — | | — | Ji-Yeun Lee | | 2/15/17 | | 1/12/17 | | 19,152 | | 702,112 | Helen T. Meates | | 2/15/17 | | 1/12/17 | | 9,003 | | 330,050 | James W. Cuminale | | 2/15/17 | | 1/12/17 | | 8,414 | | 308,457 |
| | | | | | | | | | | | | | | | | Name | | Grant Date | | | Action Date | | | All Other
Stock Awards:
Number of
Shares of Stock
or Stock Units(2)
(#) | | | Grant Date
Fair Value
of Stock and
Option Awards
($) | | Paul J. Taubman | | | — | | | | — | | | | — | | | | — | | Ji-Yeun Lee | | | 5/1/19 | | | | 2/25/19 | (1) | | | 33,444 | | | | 1,437,758 | (3) | Helen T. Meates | | | 5/1/19 | | | | 2/25/19 | (1) | | | 15,722 | | | | 675,889 | (3) | James W. Cuminale | | | 5/1/19 | | | | 2/25/19 | (1) | | | 13,149 | | | | 565,276 | (3) |
| (1) | Restricted stock unit awards awarded as long-term incentives are granted in the year following the fiscal year performance period. For instance, the restricted stock units granted to each of the Named Executive Officers for 2017 wereperformance year 2019 are actually granted in February 20182020 and therefore, are not included in this table since they were not granted in 2017.2019. |
| | The Compensation Committee acted to awardyear-end equity based awards for the 20162018 performance period at its regularly scheduled meeting on January 12, 2017,February 25, 2019, with the grants becoming effective on February 15, 2017.May 1, 2019, following approval by the company’s shareholders of the Omnibus Incentive Plan at the 2019 Annual Meeting of Shareholders. |
| (2) | Represents restricted stock units granted to each Named Executive Officer, other than Mr. Taubman, for 20162018 performance. Any dividends paid by us on our Class A common stock will be accrued in additional restricted stock units on such restricted stock unit amounts and such additional dividend restricted stock units so credited shall be or become vested to the same extent as the restricted stock units that resulted in the crediting of such additional restricted stock units with respect to each vesting tranche of restricted stock units. |
| (3) | We used the average closing price of a share of our Class A common stock over the five trading days immediately prior to and the five trading days immediately following the date that we first publicly issued our earnings release for 2017fiscal year 2019 in order to determine the number of restricted stock units to be granted, with grants made effective on February 15, 2017, the final day of this window period.May 1, 2019. Since the grant date fair value of these restricted stock unit awards is computed in accordance with GAAP, the amounts reported generally differ from the dollar amount of the portion of the 20162018 performance year long-term incentive award grant. |
Outstanding Equity Awards at 2019 FiscalYear-End The following table sets forth the outstanding equity awards held by our Named Executive Officers as of December 31, 2019. | | | | | | | | | | | | | | | | | | | | Stock Awards | | Name | | Number of
Shares or
Units of
Stock That
Have Not
Vested (#) | | | Market
Value of
Shares or
Units of
Stock That
Have Not
Vested(5) ($) | | | Equity
Incentive
Plan Awards:
Number of
Unearned
Shares, Units
or Other
Rights That
Have Not
Vested(6) (#) | | | Equity
Incentive
Plan Awards:
Market or
Payout Value
of Unearned
Shares, Units
or Other
Rights That
Have Not
Vested(5) ($) | | Paul J. Taubman | | | 40,000 | (1) | | | 1,805,200 | | | | 1,830,000 | | | | 82,587,900 | | Ji-Yeun Lee | | | 67,974 | (2) | | | 3,067,667 | | | | 285,000 | | | | 12,862,050 | | Helen T. Meates | | | 32,704 | (3) | | | 1,475,932 | | | | 30,000 | | | | 1,353,900 | | James W. Cuminale | | | 28,302 | (4) | | | 1,277,269 | | | | 45,000 | | | | 2,030,850 | |
| (1) | This amount consists of 40,000 LTIP Units representing the unvested tranches of the 60,000 LTIP units awarded to Mr. Taubman on September 24, 2018, which vest ratably on each of October 1, 2020 and 2021. |
| (2) | This amount consists of (i) 6,384 restricted stock units that vest on March 1, 2020, (ii) 27,684 restricted stock units that vest ratably on March 1, 2020 and 2021, (iii) 33,444 restricted stock units that vest ratably on March 1, 2020, 2021 and 2022, and (iv) 462 unvested dividend equivalent restricted stock units. |
| (3) | This amount consists of (i) 3,001 restricted stock units that vest on March 1, 2020, (iii) 13,753 restricted stock units that vest ratably on March 1, 2020 and 2021, (iii) 15,722 restricted stock units that vest ratably on March 1, 2020, 2021 and 2022, and (iv) 228 unvested dividend equivalent restricted stock units. |
| (4) | This amount consists of (i) 2,805 restricted stock units that vest on March 1, 2020, (ii) 12,146 restricted stock units that vest ratably on March 1, 2020 and 2021, (iii) 13,149 restricted stock units that vest ratably on March 1, 2020, 2021 and 2022, and (iv) 202 unvested dividend equivalent restricted stock units. |
| (5) | Based on the closing price of our Class A common stock of $45.13 on December 31, 2019. |
| (6) | These amounts representEarn-Out Units (as defined below) acquired upon closing of the merger andspin-off transactions on October 1, 2015 that are subject to both time and performance vesting.Earn-Out Units have satisfied the five-year time-vesting requirement, with 20% vested on October 9, 2017, 30% vested on October 9, 2018, and 50% vested on October 9, 2019. Amounts reported consist of 60% of theEarn-Out Units granted as 20% of theEarn-Out Units were earned on each of March 20, 2018 and June 18, 2018 upon achieving certain share price targets. The performance vesting requirement for the remainingEarn-Out Units will be satisfied upon the shares of Class A common stock achieving the applicable share price targets described |
| below under “Narrative Disclosure Relating to the Summary Compensation Table, Grants of Plan-Based Awards Table, Outstanding Equity Awards at 2019 FiscalYear-End Table, and 2019 Option Exercises and Stock Vested Table—Partner Agreements—Merger andSpin-off Transaction Equity Grants—FounderEarn-Out Units.” The number ofEarn-Out Units reported reflects the total number of unvested units outstanding even though the performance period will not end until October 1, 2021. As vesting is contingent on meeting certain volume-weighted average share price targets, there is no assurance that the unvested portion of these units will be earned. See “Narrative Disclosure Relating to the Summary Compensation Table, Grants of Plan-Based Awards Table, Outstanding Equity Awards at 2019 FiscalYear-End Table, and 2019 Option Exercises and Stock Vested Table—Partner Agreements—Merger andSpin-off Transaction Equity Grants—FounderEarn-Out Units” for a description of theEarn-Out Units. |
2019 Option Exercises and Stock Vested The following table sets forth certain information regarding equity awards that vested in 2019 for our Named Executive Officers. | | | | | | | | | | | | Stock or Unit Awards | | Name | | Number of Shares
or Units Acquired
on Vesting(1)
(#) | | | Value Realized
on Vesting(2)
($) | | Paul J. Taubman | | | 2,005,000 | | | | 55,827,350 | | Ji-Yeun Lee | | | 342,836 | | | | 9,809,243 | | Helen T. Meates | | | 69,927 | | | | 1,995,874 | | James W. Cuminale | | | 73,923 | | | | 2,140,006 | |
| (1) | Represents the aggregate number of Founder Units,Earn-Out Units, and solely with respect to Ms. Lee, Ms. Meates and Mr. Cuminale, restricted stock units that vested in 2019. |
| (2) | The value realized on vesting of the equity awards is the product of (a) the closing price on the New York Stock Exchange of a share of our Class A common stock on the vesting date (or, if the vesting date was not a trading day, the immediately preceding trading day), multiplied by (b) the number of equity awards vested. |
Narrative Disclosure Relating to the Summary Compensation Table, and the Grants of Plan-Based Awards Table, Outstanding Equity Awards at 2019 FiscalYear-End Table, and 2019 Option Exercises and Stock Vested Table Partner Agreements Partner Agreement with Paul J. Taubman PJT Partners Holdings entered into a partner agreement with Mr. Taubman (the “CEO Agreement”) oneffective October 1, 2015. The CEO Agreement provides for an annual base salary of $1,000,000 through October 1, 2018, the third anniversary of the closing of the merger andspin-off transactions. Thereafter, Mr. Taubman’s compensation will be determined by our Compensation Committee, subject to a minimum annual base salary of $350,000. In 2018, the Compensation Committee agreed to extend this compensation framework such that Mr. Taubman will receive an annual base salary of $1,000,000 through October 1, 2021. On September 24, 2018, the Compensation Committee awarded Mr. Taubman a long-term incentive award of 60,000 LTIP Units. These LTIP Units vestone-third ratably on each of October 1, 2019, 2020 and 2021, subject to continuous employment. Mr. Taubman has not received any cash compensation in excess of his base salary since ourspin-off in 2015, and we do not currently anticipate granting Mr. Taubman any additional incentive compensation through October 1, 2021. Mr. Taubman is generally subject to covenants ofnon-competition andnon-solicitation of employees, consultants, clients and investors during his service to PJT Partners Holdings and for a period (the “Restriction Period”) ending on the later of (x) March 31, 2017 and (y) one year following the termination of his service to PJT Partners Holdings in the case of thenon-competition restrictions, and two years following the termination of his service to PJT Partners Holdings in the case of thenon-solicitation restrictions. If Mr. Taubman is terminated by PJT Partners Holdings without cause or he resigns for good reason, the foregoing periods of time during which he will be subject to thenon-competition restrictions will be reduced to 120 days and 90 days, respectively. If Mr. Taubman’s service with PJT Partners Holdings is terminated for any reason other than his resignation without Board Change Good Reason or a termination of service by PJT Partners Holdings for cause, in each case within 24 months following a Board Change of Control, then (1) the covenants ofnon-competition andnon-solicitation of clientclients and investors will expire upon termination, and (2) the covenants ofnon-solicitation of employees and consultants will expire six months after termination. Mr. Taubman is also subject to perpetual covenants of confidentiality andnon-disparagement. For purposes of the CEO Agreement: “cause” means the occurrence or existence of any of the following: (i) Mr. Taubman’s willful act of fraud, misappropriation, or embezzlement against PJT Partners Holdings that has a material adverse effect on the business of PJT Partners Holdings; (ii) Mr. Taubman’s conviction of a felony; or (iii) anun-appealable final determination by a court or regulatory body having authority with respect to securities laws that Mr. Taubman violated any applicable securities laws or any rules or regulations thereunder if such final determination (A) bars Mr. Taubman from employment in the securities industry or (B) renders Mr. Taubman unable to substantially perform his duties to PJT Partners Holdings; provided that, PJT Partners Holdings must provide a notice of termination to Mr. Taubman within 60 days of the occurrence of the event constituting “cause,” and, other than with respect to clause (ii) above, Mr. Taubman will have the opportunity to cure within 30 days of receiving such notice. “good reason” means the occurrence of any of the following events without Mr. Taubman’s written consent: (i) a material adverse change in Mr. Taubman’s titles, positions, authority, duties or responsibilities; (ii) the assignment of any duties materially inconsistent with Mr. Taubman’s positions; (iii) a reduction of Mr. Taubman’s salary; (iv) the relocation of Mr. Taubman’s principal place of service to anywhere other than PJT Partners Holdings’ principal office; (v) a material breach by PJT Partners Holdings or its affiliates of the CEO Agreement or any other material agreement with PJT Partners Holdings or its affiliates; (vi) the failure of PJT Partners Holdings to nominate Mr. Taubman or Mr. Taubman’s failure to be elected to our Board of Directors (other than as a result of Mr. Taubman’s voluntary resignation) or Mr. Taubman’s removal as a member of the boardBoard by PJT Partners Holdings (other than for “cause”); (vii) the hiring or firing of any executive officer; or (viii) the failure by PJT Partners Holdings to obtain written assumption of the Partner Agreement by a purchaser or successor of PJT Partners Holdings; provided that, Mr. Taubman must provide a notice of termination to PJT Partners Holdings within 60 days of the occurrence of the event constituting “good reason,” and PJT Partners Holdings will have the opportunity to cure within 30 days of receiving such notice. “Board Change Good Reason” means the occurrence of any of the following events without Mr. Taubman’s written consent: (i) a material adverse change in Mr. Taubman’s titles, positions, authority, duties or responsibilities; (ii) the assignment of any duties materially inconsistent with Mr. Taubman’s positions; (iii) a reduction of Mr. Taubman’s salary; (iv) the relocation of Mr. Taubman’s principal place of service to anywhere other than PJT Partners Holdings’ principal office; (v) a breach by PJT Partners Holdings or its affiliates of the CEO Agreement or any other material agreement with PJT Partners Holdings or its affiliates; (vi) the failure of PJT Partners Holdings to nominate Mr. Taubman or Mr. Taubman’s failure to be elected to our Board (other than as a result of Mr. Taubman’s voluntary resignation) or Mr. Taubman’s removal as a member of the Board by PJT Partners Holdings (other than for “cause”); (vii) the failure by PJT Partners Holdings to obtain written assumption of the CEO Agreement by a purchaser or successor of PJT Partners Holdings; (viii) PJT Partners Holdings or any of its affiliates effecting a material disposition, acquisition or other business combination; (ix) PJT Partners Holdings or any of its affiliates entering into a new significant business line or discontinuing a significant existing business line; (x) the hiring or firing of any executive officer; or (xi) PJT Partners Holdings or any of its affiliates making any material compensation decisions with respect to partners or employees other than Mr. Taubman or PJT Partners Holdings or any of its affiliates failing to implement any material compensation decision made by Mr. Taubman with respect to partners or employees; provided that, Mr. Taubman must provide a notice of termination to PJT Partners Holdings within 120 days of the occurrence of the event constituting “Board Change Good Reason,” and PJT Partners Holdings will have the opportunity to cure within 10 days of receiving such notice. | relocation of Mr. Taubman’s principal place of service to anywhere other than PJT Partners Holdings’ principal office; (v) a breach by PJT Partners Holdings or its affiliates of the CEO Agreement or any other material agreement with PJT Partners Holdings or its affiliates, (vi) the failure of PJT Partners Holdings to nominate Mr. Taubman or Mr. Taubman’s failure to be elected to our Board of Directors (other than as a result of Mr. Taubman’s voluntary resignation) or Mr. Taubman’s removal as a member of the board by PJT Partners Holdings (other than for “cause”); (vii) the failure by PJT Partners Holdings to obtain written assumption of the CEO Agreement by a purchaser or successor of PJT Partners Holdings, (viii) PJT Partners Holdings or any of its affiliates effecting a material disposition, acquisition or other business combination; (ix) PJT Partners Holdings or any of its affiliates entering into a new significant business line or discontinuing a significant existing business line, (x) the hiring or firing of any executive officer; or (xi) PJT Partners Holdings or any of its affiliates making any material compensation decisions with respect to partners or employees other than Mr. Taubman or PJT Partners Holdings or any of its affiliates failing to implement any material compensation decision made by Mr. Taubman with respect to partners or employees; provided that, Mr. Taubman must provide a notice of termination to PJT Partners Holdings within 120 days of the occurrence of the event constituting “Board Change Good Reason,” and PJT Partners Holdings will have the opportunity to cure within 10 days of receiving such notice.
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“Board Change of Control” means a majority of the members of our Board of Directors ceasing to be “continuing directors” which means any member of our Board of Directors who: (i) was a member of such board immediately following the merger andspin-off transactions on October 1, 2015; or (ii) was nominated for election or elected or appointed to the board with the approval of a majority of the “continuing directors” who were members of such board at the time of such nomination, election or appointment. Partner Agreements withJi-Yeun Lee, Helen T. Meates and James W. Cuminale PJT Partners Holdings entered into partner agreements with each of Ms. Lee, Ms. Meates and Mr. Cuminale oneffective October 1, 2015. The agreements generally set forth the terms of service of each officer, including their respective compensation and benefits, as described in “Elements of our ExecutiveOur Compensation Program.” These officers are generally subject to covenants ofnon-competition andnon-solicitation of employees, consultants, clients and investors during their service to PJT Partners Holdings and for a period (the “Restriction Period”) ending on the later of (x) March 31, 2017 and (y) one year following the termination of service to PJT Partners Holdings in the case of thenon-competition restrictions, and two years following the termination of service to PJT Partners Holdings in the case of thenon-solicitation restrictions. If the executive officer is terminated by PJT Partners Holdings without cause or the executive officer resigns for good reason, the foregoing periods of time during which they will be subject to thenon-competition restrictions will be reduced to 120 days and 90 days, respectively. The officers are also subject to perpetual covenants of confidentiality andnon-disparagement. For purposes of the partner agreements with Ms. Lee, Ms. Meates and Mr. Cuminale: “cause” means the occurrence or existence of any of the following: (i) (x) any material breach of the partner agreementagreements, (y) material breach of any material rules or regulations of PJT Partners Holdings applicable that have been provided that has a material adverse effect on the business of PJT Partners Holdings, or (z) deliberate and repeated failure to perform substantially the executive officer’s material duties to PJT Partners Holdings; provided that, in the case of any of the foregoing clauses (x), (y) or (z), PJT Partners Holdings has given the executive officer written notice within fifteen days after PJT Partners Holdings becomes aware of such action and, to the extent such action is curable, the executive officer fails to cure such breach, failure to perform or conduct or behavior within fifteen days after receipt by the executive officer of such notice (or such longer period, not to exceed an additional fifteen days, as shall be reasonably required for such cure, provided that the executive officer is diligently pursuing such cure); (ii) any act of fraud, misappropriation, embezzlement or similar conduct by the executive officer against PJT Partners Holdings; or (iii) conviction (on the basis of a trial or by an accepted plea of guilty or nolo contendere) of a felony or crime of moral turpitude, or a determination by a court of competent jurisdiction, by a regulatory body or by a self-regulatory body having authority with respect to securities laws, rules or regulations, that the executive officer individually has violated any securities laws or any rules or regulations thereunder, or any rules of any such self-regulatory body (including, without limitation, any licensing requirement), if such conviction or determination has a material adverse effect on (A) the executive officer’s ability to function as a partner, taking into account the services required of the executive officer and the nature of PJT Partners Holdings’ business, or (B) the business of PJT Partners Holdings. | Holdings has given the executive officer written notice within fifteen days after PJT Partners Holdings becomes aware of such action and, to the extent such action is curable, the executive officer fails to cure such breach, failure to perform or conduct or behavior within fifteen days after receipt by the executive officer of such notice (or such longer period, not to exceed an additional fifteen days, as shall be reasonably required for such cure, provided that the executive officer is diligently pursuing such cure); (ii) any act of fraud, misappropriation, embezzlement or similar conduct by the executive officer against PJT Partners Holdings; or (iii) conviction (on the basis of a trial or by an accepted plea of guilty or nolo contendere) of a felony or crime of moral turpitude, or a determination by a court of competent jurisdiction, by a regulatory body or by a self-regulatory body having authority with respect to securities laws, rules or regulations, that the executive officer individually has violated any securities laws or any rules or regulations thereunder, or any rules of any such self-regulatory body (including, without limitation, any licensing requirement), if such conviction or determination has a material adverse effect on (A) the executive officer’s ability to function as a partner, taking into account the services required of the executive officer and the nature of PJT Partners Holdings’ business, or (B) the business of PJT Partners Holdings.
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“good reason” means the occurrence of any of the following events without the executive officer’s written consent: (i) a material adverse change in the executive officer’s title, authority, duties or responsibilities; (ii) the relocation of the executive officer’s principal place of service by more than 50 miles; (iii) a material breach by PJT Partners Holdings or its affiliates of the partner agreement or any other material agreement with PJT Partners Holdings or its affiliates; or (iv) the failure by PJT Partners Holdings to obtain written assumption of the partner agreement by a purchaser or successor of PJT Partners Holdings; provided that, the executive officer must provide a notice of termination to PJT Partners Holdings within 60 days of the occurrence of the event constituting Good Reason, and in the event the executive officer provides notice of “good reason,” PJT Partners Holdings will have the opportunity to cure such event constituting “good reason” within 30 days of receiving such notice. Merger andSpin-off Transaction Equity Grants Founder Units. Pursuant to the partner agreements and the agreement governing the merger andspin-off transactions (the “Transaction Agreement”), certain of our partners, including our Named Executive Officers, acquired Partnership Units in PJT Partners Holdings at the time of the merger andspin-off transactions in 2015 (“Founder Units”). For purposes of this discussion, Founder Units also include “Founder LTIP Units” in PJT Partners Holdings, which are a series of LTIP Units that participate, from issuance, in all distributions by PJT Partners Holdings (other than liquidating distributions), ratably, on a per unit basis, with Partnership Units. Founder Units vest over a five year period, with 20% vestingvested on October 9, 2017 (the third anniversary of the signing of the Transaction Agreement), 30% vestingvested on October 9, 2018 (the fourth anniversary of the signing of the Transaction Agreement), and 50% vestingvested on October 9, 2019 (the fifth anniversary of the signing of the Transaction Agreement). FounderEarn-Out Units. Certain of our partners, including our Named Executive Officers, acquired LTIP Units in PJT Partners Holdings at the time of the merger andspin-off transactions in 2015 (referred to as“Earn-Out Units”), which are subject to both time and performance vesting.Earn-Out Units satisfy the time-vesting requirement over a five year period, with 20% vested on October 9, 2017 (the third anniversary of the signing of the Transaction Agreement), 30% vestingvested on October 9, 2018 (the fourth anniversary of the signing of the Transaction Agreement), and 50% vestingvested on October 9, 2019 (the fifth anniversary of the signing of the Transaction Agreement). The performance vesting requirement will be satisfied upon the shares of the company’s Class A common stock achieving certain volume-weighted average share price targets over any consecutive30-day trading period, as follows: 20% of theEarn-Out Units will bewere earned on March 20, 2018 upon achieving a volume-weighted average trading price of Class A common stock of $48 per share; 20% of theEarn-Out Units will bewere earned on June 18, 2018 upon achieving a volume-weighted average trading price of Class A common stock of $55 per share; 20% of theEarn-Out Units will be earned upon achieving a volume-weighted average trading price of Class A common stock of $63 per share; 20% of theEarn-Out Units will be earned upon achieving a volume-weighted average trading price of Class A common stock of $71 per share; and 20% of theEarn-Out Units will be earned upon achieving a volume-weighted average trading price of Class A common stock of $79 per share. The performance vesting requirements must be met prior to October 1, 2021, the sixth anniversary of the closing of the merger andspin-off transactions, and anyEarn-Out Units not meeting the designated requirements prior to such date will be forfeited. No portion of theEarn-Out Units will become vested until both the time-vesting and performance-vesting conditions have been satisfied. The Founder Units andEarn-Out Units are subject to the terms of the partnership agreement of PJT Partners Holdings, the Omnibus Incentive Plan and the applicable award agreements. The units are also subject to certain treatment in connection with a termination of service or a change in control. See “Potential Payments upon Termination of Employment or Change in Control—Merger andSpin-off Transaction Grants”Grants of Founder Units andEarn-Out Units” below. Outstanding Equity Awards at 2017 FiscalYear-End
The following table sets forth the outstanding equity awards held by our Named Executive Officers as of December 29, 2017.
| | | | | | | | | Name | | Stock Awards | | | Number of Shares
or Units of
Stock That Have
Not Vested
(#) | | Market Value of
Shares or Units
of Stock That
Have Not
Vested(5)
($) | | Equity Incentive
Plan Awards:
Number of
Unearned
Shares, Units or
Other Rights That
Have Not
Vested(6)
(#) | | Equity Incentive
Plan Awards: Market or
Payout Value of Unearned
Shares, Units or Other Rights
That Have Not Vested(5)
($) | Paul J. Taubman | | 2,200,000(1) | | 100,320,000 | | 3,050,000 | | 139,080,000 | Ji-Yeun Lee | | 383,251(2) | | 17,476,246 | | 475,000 | | 21,660,000 | Helen T. Meates | | 89,050(3) | | 4,060,659 | | 50,000 | | 2,280,000 | James W. Cuminale | | 88,458(4) | | 4,033,662 | | 75,000 | | 3,420,000 |
| (1) | This amount consists of 2,200,000 Founder Units representing the unvested tranches of the 2,750,000 units acquired by Mr. Taubman upon closing of the merger andspin-off transactions on October 1, 2015, of which 825,000 vest on October 9, 2018 and 1,375,000 vest on October 9, 2019.
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| (2) | This amount consists of (i) 364,000 Founder Units representing the unvested tranches of the 455,000 units acquired by Ms. Lee upon closing of the merger andspin-off transactions on October 1, 2015, of which 136,500 vest on October 9, 2018 and 227,500 vest on October 9, 2019, (ii) 19,152 restricted stock units that vest ratably on March 1, 2018, 2019 and 2020, and (iii) 99 unvested dividend equivalent restricted stock units.
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| (3) | This amount consists of (i) 80,000 Founder Units representing the unvested tranches of the 100,000 units acquired by Ms. Meates upon closing of the merger andspin-off transactions on October 1, 2015, of which 30,000 vest on October 9, 2018 and 50,000 vest on October 9, 2019, (ii) 9,003 restricted stock units that vest ratably on March 1, 2018, 2019 and 2020, and (iii) 47 unvested dividend equivalent restricted stock units.
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| (4) | This amount consists of (i) 80,000 Founder Units representing the unvested tranches of the 100,000 units acquired by Mr. Cuminale upon closing of the merger andspin-off transactions on October 1, 2015, of which 30,000 vest on October 9, 2018 and 50,000 vest on October 9, 2019, (ii) 8,414 restricted stock units that vest ratably on March 1, 2018, 2019 and 2020, and (iii) 44 unvested dividend equivalent restricted stock units
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| (5) | Based on the closing price of our Class A common stock of $45.60 on December 29, 2017.
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| (6) | Earn-Out Units acquired upon closing of the merger andspin-off transactions on October 1, 2015 (including 1,474,553 units for Mr. Taubman that were received in exchange for the contribution of his interest in PJT Capital LP, our predecessor firm) that are subject to both time and performance vesting.Earn-Out Units satisfy the time-vesting requirement over a five year period, with 20% vested on October 9, 2017, 30% vesting on October 9, 2018, and 50% vesting on October 9, 2019. The performance vesting requirement will be satisfied upon the shares of Class A common stock achieving the applicable share price targets described above under “Narrative Disclosure Relating to the Summary Compensation Table and the Grants of Plan-Based Awards Table—Merger andSpin-off Transaction Equity Grants—FounderEarn-Out Units.” The number ofEarn-Out Units reported reflects the total number of units granted even though the performance period will not end until October 1, 2021 and vesting is contingent on meeting certain volume-weighted average share price targets. Therefore, there is no assurance that any portion of these units will be earned. See “Partner Agreements—Merger andSpin-Off Transaction Equity Grants” for a description of theEarn-Out Units.
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2017 Option Exercises and Stock Vested
The following table sets forth certain information regarding equity awards that vested in 2017 for our Named Executive Officers.
| | | | | | | | | | | | Stock or Unit Awards | | Name | �� | Number of Shares or Units
Acquired on Vesting(1)
(#) | | | Value Realized on Vesting(2)
($) | | Paul J. Taubman | | | 550,000 | | | | 20,234,500 | | Ji-Yeun Lee | | | 91,000 | | | | 3,347,890 | | Helen T. Meates | | | 20,000 | | | | 735,800 | | James W. Cuminale | | | 20,000 | | | | 735,800 | |
| (1) | Represents the aggregate number of Founder Units that vested in 2017. These Founder Units were issued pursuant to the Omnibus Incentive Plan.
|
| (2) | The value realized on vesting of the Founder Units is the product of (a) the closing price on the New York Stock Exchange of a share of our Class A common stock on the vesting date (or, if the vesting date was not a trading day, the immediately preceding trading day), multiplied by (b) the number of Founder Units vesting.
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Potential Payments upon Termination of Employment or Change in Control Other than with respect to the potential continued or accelerated vesting of outstanding equity awards that each of our Named Executive Officers may be entitled to in connection with certain terminations of employment or a change in control, our Named Executive Officers are not entitled to any additional payments or benefits following a change in control or upon termination of employment, and are only entitled to payments and benefits that are available generally on anon-discriminatory basis to all salaried employees, such as continuation of health care benefits through the end of the month of the termination of employment. Merger andSpin-off Transaction Grants of Founder Units andEarn-Out Units Paul J. Taubman If Mr. Taubman’s service to PJT Partners Holdings terminates for any reason other than Mr. Taubman’s resignation without good reason or by PJT Partners Holdings for cause, then: (i) all unvested Founder Units will remain outstanding and continue to be eligible to vest during the Restriction Period (as defined above) and will vest in full upon the expiration of the Restriction Period (or, if earlier, the date of Mr. Taubman’s death); and (ii) the unvestedEarn-Out Units will remain outstanding and become vested upon the satisfaction of the applicable stock price performance conditions and continue to be eligible to time vest on their regularly scheduled vesting dates during the Restriction Period, with full time-vesting at the end of the Restriction Period (or, if earlier, the date of Mr. Taubman’s death). If Mr. Taubman’s service is terminated because of death (other than within 24 months following a Board Change of Control), the time-vesting conditions for theEarn-Out Units will be deemed satisfied and all unvestedEarn-Out Units will remain outstanding and become fully vested upon the satisfaction of the applicable stock price performance conditions. Notwithstanding the foregoing, if Mr. Taubman’s service to PJT Partners Holdings is terminated for any reason other than his resignation without Board Change Good Reason (as defined above), or termination by PJT Partners Holdings for cause, in each case within 24 months following a Board Change of Control (as defined above), then all of Mr. Taubman’s unvested Founder Units andEarn-Out Units will fully vest upon such termination, without regard to any applicable service or performance vesting conditions. In the event of any other termination of Mr. Taubman’s service or his uncured breach of thenon-competition ornon-solicitation covenants contained in his partner agreement, his unvested Founder Units andEarn-Out Units will be forfeited automatically. Upon a change in control of PJT Partners, then (i) all unvested Founder Units will vest in full immediately, and (ii) the time-vesting conditions for theEarn-Out Units will be deemed satisfied, but the performance-vesting conditions will be satisfied only if the applicable share price targets are achieved in connection with such change in control. For these purposes, “cause” and “good reason” have the same meanings ascribed to such terms in Mr. Taubman’s partner agreement. See “Narrative Disclosure Relating to the Summary Compensation Table, and the Grants of Plan-Based Awards Table,— Outstanding Equity Awards at 2019 FiscalYear-End Table, and 2019 Option Exercises and Stock Vested Table—Partner Agreements—Partner Agreement with Paul J. Taubman” above. Ji-Yeun Lee, Helen T. Meates and James W. Cuminale If Ms. Lee’s, Ms. Meates’s or Mr. Cuminale’s service terminates for any reason other than such officer’s resignation without good reason or by PJT Partners Holdings for cause, then (i) all of such officer’s unvested Founder Units will remain outstanding and continue to be eligible to vest on their regularly scheduled vesting dates during the Restriction Period (as defined above) and will vest in full upon the expiration of the Restriction Period (or, if earlier, the date of such officer’s death), and (ii) the unvestedEarn-Out Units will become vested to the extent the applicable stock price performance conditions are met on or prior to the date of termination of service and, unless otherwise determined by Mr. Taubman, all remaining unvestedEarn-Out Units will be forfeited. In the event of any other termination of the officer’s service or uncured breach of thenon-competition ornon-solicitation covenants (described below), such officer’s unvested Founder Units andEarn-Out Units will be forfeited automatically. Upon a change in control of PJT Partners, then (i) all unvested Founder Units vest in full immediately, and (ii) the time-vesting conditions for theEarn-Out Units will be deemed satisfied, but the performance-vesting conditions will be satisfied only if the applicable share price targets are achieved in connection with such change in control. For these purposes, “cause” and “good reason” have the same meanings ascribed to such terms in the partner agreements with each of Ms. Lee, Ms. Meates and Mr. Cuminale. See “Narrative Disclosure Relating to the Summary Compensation Table, and the Grants of Plan-Based Awards Table,— Outstanding Equity Awards at 2019 FiscalYear-End Table, and 2019 Option Exercises and Stock Vested Table—Partner Agreements—Partner Agreements withJi-Yeun Lee, Helen T. Meates and James W. Cuminale”above. Restricted Stock Unit Awards If the participant’s employment is terminated for cause, the participant’s undelivered restricted stock units (vested and unvested) will be immediately forfeited, and if the participant resigns, the participant’s unvested restricted stock units will be immediately forfeited. Upon a change in control or termination of the participant’s services because of death, disability or without cause by the company, the shares underlying any outstanding restricted stock units (vested and unvested) will become immediately deliverable. In connection with a qualifying retirement, restricted stock units will continue to vest and be delivered over the applicable vesting period, subject to forfeiture if the participant violates any applicable provision of his or her employment or partner agreement or engages in any competitive activity. LTIP Unit Awards If the participant’s employment is terminated for cause, the participant’s undelivered LTIP Units (vested and unvested) will be immediately forfeited, and if the participant resigns, the participant’s unvested LTIP Units will be immediately forfeited. Upon a change in control or termination of the participant’s services because of death, disability or without cause by the company, the shares underlying any outstanding LTIP Units (vested and unvested) will become immediately deliverable. In connection with a qualifying retirement, LTIP Units will continue to vest and be delivered over the applicable vesting period, subject to forfeiture if the participant violates any applicable provision of his or her employment or partner agreement or engages in any competitive activity. The following table quantifies the value of our Named Executive Officers’ outstanding equity awards that would accelerate and vest upon certain terminations of employment or a change in control. All calculations in this table are based on an assumed termination or change in control date of December 29, 2017. | | | | | | | | | | | | | Name | | Accelerated
Vesting of Equity
Awards: Founder
Units(1)
($) | | | Accelerated Vesting
of Equity Awards:
FounderEarn-Out
Units(1)
($) | | | Accelerated Vesting of
Equity Awards:
Restricted Stock
Units(1)
($) | | Paul J. Taubman | | | | | | | | | | | | | Termination by us with “cause” or resignation by employee without “good reason” | | | — | | | | — | | | | N/A | | Termination by us without “cause” or resignation by employee for “good reason”not within 24 months following a “Board Change of Control” | | | —(2) | | | | —(3) | | | | N/A | | Termination by us without “cause” or resignation by employee for “Board Change Good Reason” within 24 months following a “Board Change of Control” | | | 100,320,000 | | | | 139,080,000 | | | | N/A | | Disability | | | N/A | | | | N/A | | | | N/A | | Deathnot within 24 months following “Board Change of Control” | | | 100,320,000 | | | | —(4) | | | | N/A | | Death within 24 months following “Board Change of Control” | | | 100,320,000 | | | | 139,080,000 | | | | N/A | | Change in control | | | 100,320,000 | | | | —(5) | | | | N/A | | | | | | Ji-Yeun Lee | | | | | | | | | | | | | Termination by us with “cause” or resignation by employee without “good reason” | | | — | | | | — | | | | — | | Termination by us without “cause” | | | —(2) | | | | —(6) | | | | 877,846 | | Resignation by employee for “good reason” | | | —(2) | | | | —(6) | | | | N/A | | Disability | | | N/A | | | | N/A | | | | 877,846 | | Death | | | 16,589,400 | | | | —(6) | | | | 877,846 | | Change in control | | | 16,589,400 | | | | —(5) | | | | 877,846 | | | | | | Helen T. Meates | | | | | | | | | | | | | Termination by us with “cause” or resignation by employee without “good reason” | | | — | | | | — | | | | — | | Termination by us without “cause” | | | —(2) | | | | —(6) | | | | 412,659 | | Resignation by employee for “good reason” | | | —(2) | | | | —(6) | | | | N/A | | Disability | | | N/A | | | | N/A | | | | 412,659 | | Death | | | 3,648,000 | | | | —(6) | | | | 412,659 | | Change in control | | | 3,648,000 | | | | —(5) | | | | 412,659 | | | | | | James W. Cuminale | | | | | | | | | | | | | Termination by us with “cause” or resignation by employee without “good reason” | | | — | | | | — | | | | — | | Termination by us without “cause” | | | —(2) | | | | —(6) | | | | 385,662 | | Resignation by employee for “good reason” | | | —(2) | | | | —(6) | | | | N/A | | Disability | | | N/A | | | | N/A | | | | 385,662 | | Death | | | 3,648,000 | | | | —(6) | | | | 385,662 | | Change in control | | | 3,648,000 | | | | —(5) | | | | 385,662 | |
31, 2019. | | | | | | | | | Name | | Accelerated
Vesting of
Equity Awards:
Founder Earn-
Out Units(1) ($) | | | Accelerated
Vesting of
Equity Awards:
LTIP Units and
Restricted
Stock Units(1) ($) | | Paul J. Taubman | | | | | | | | | Termination by us with “cause” or resignation by employee without “good reason” | | | — | | | | N/A | | Termination by us without “cause” or resignation by employee for “good reason” not within 24 months following a “Board Change of Control” | | | — | (2) | | | N/A | | Termination by us without “cause” or resignation by employee for “Board Change Good Reason” within 24 months following a “Board Change of Control” | | | 82,587,900 | | | | N/A | | Termination by us with “cause” | | | N/A | | | | 1,805,200 | | Disability | | | N/A | | | | 1,805,200 | | Death not within 24 months following “Board Change of Control” | | | — | (2) | | | N/A | | Death within 24 months following “Board Change of Control” | | | 82,587,900 | | | | N/A | | Death | | | N/A | | | | 1,805,200 | | Change in control | | | — | (3) | | | 1,805,200 | | Ji-Yeun Lee | | | | | | | | | Termination by us with “cause” or resignation by employee without “good reason” | | | — | | | | — | | Termination by us without “cause” | | | — | (4) | | | 3,067,667 | | Resignation by employee for “good reason” | | | — | (4) | | | N/A | | Disability | | | N/A | | | | 3,067,667 | | Death | | | — | (4) | | | 3,067,667 | | Change in control | | | — | (3) | | | 3,067,667 | | Helen T. Meates | | | | | | | | | Termination by us with “cause” or resignation by employee without “good reason” | | | — | | | | — | | Termination by us without “cause” | | | — | (4) | | | 1,475,932 | | Resignation by employee for “good reason” | | | — | (4) | | | N/A | | Disability | | | N/A | | | | 1,475,932 | | Death | | | — | (4) | | | 1,475,932 | | Change in control | | | — | (3) | | | 1,475,932 | |
| | | | | | | | | Name | | Accelerated
Vesting of
Equity Awards:
Founder Earn-
Out Units(1) ($) | | | Accelerated
Vesting of
Equity Awards:
LTIP Units and
Restricted
Stock Units(1) ($) | | James W. Cuminale | | | | | | | | | Termination by us with “cause” or resignation by employee without “good reason” | | | — | | | | — | | Termination by us without “cause” | | | — | (4) | | | 1,277,269 | | Resignation by employee for “good reason” | | | — | (4) | | | N/A | | Disability | | | N/A | | | | 1,277,269 | | Death | | | — | (4) | | | 1,277,269 | | Change in control | | | — | (3) | | | 1,277,269 | |
| (1) | The value of accelerated equity awards, for purposes of this table, was determined by multiplying the applicable number of equity awards (including associated restricted stock unit dividend equivalents) that would vest upon termination or change in control by $45.60,$45.13, the closing price of our Class A common stock on December 29, 2017.31, 2019. |
| (2) | All unvested Founder Units will remain outstanding and continue to be eligible to vest on their regularly scheduled vesting dates during the Restriction Period (as defined above) and will vest in full upon the expiration of the Restriction Period (or, if earlier, the date of the executive’s death). |
| (3) | All unvestedEarn-Out Units will remain outstanding and become vested upon the satisfaction of the applicable stock price performance conditions and continue to be eligible to time vest on their regularly scheduled vesting dates during the Restriction Period, with full time-vesting at the end of the Restriction Period (or, if earlier, the date of the executive’s death).
|
| (4) | The time-vesting conditions for theEarn-Out Units will be deemed satisfied and all unvestedEarn-Out Units will remain outstanding and become vested upon the satisfaction of the applicable stock price performance conditions.
|
| (5)(3) | Upon a change in control, the time-vestingperformance vesting conditions for theEarn-Out Units will be deemed satisfied, but the performance-vesting conditions will be satisfied only if the applicable share price targets are achieved in connection with such change in control. Amount reported assumes that the price paid in connection with a change in control would have been $45.60,$45.13, the closing price of our Class A Commoncommon stock on December 29, 2017,31, 2019, and therefore none of the remaining performance vesting price targets would have been achieved and all of the executive’sofficer’s unvestedEarn-Out Units would have been forfeited. |
| (6)(4) | All unvestedEarn-Out Units will become vested to the extent the applicable stock price performance conditions are met on or prior to the date of termination of service and, unless otherwise determined by Mr. Taubman, all remaining unvestedEarn-Out Units will be forfeited. OnAs of December 29, 2017, none31, 2019, two of the applicable stock price performance conditions had been met and the amounts reported assume that Mr. Taubman would not have exercised his discretion to vest all the unvestedEarn-Out Units. As a result, all of the executive’sofficer’s unvestedEarn-Out Units would have been forfeited. |
CEO Pay Ratio Presented below is the ratio of annual total compensation of Mr. Taubman, our CEO, to the median annual total compensation for all our employees (other than our CEO) as of December 31, 2019 (the “CEO Pay Ratio”). We believe the pay ratio included below is a reasonable estimate determined under relevant SEC rules. However, due to the flexibility afforded by Item 402(u) of RegulationS-K in calculating the CEO Pay Ratio, our CEO Pay Ratio may not be comparable to the CEO pay ratios presented by other companies. For 2019, the annual total compensation of our median employee, the annual total compensation of our CEO, pursuant to the methodology described below and in accordance with the requirements for determining total compensation in the Summary Compensation Table, and the resulting pay ratio are shown in the table below: | | | | | | | | 2019 Annual Total Compensation | | CEO | | $ | 1,015,000 | | Median Employee | | $ | 278,329 | | CEO Pay Ratio | | | 4:1 | |
The 2018 total compensation included in the Summary Compensation Table for Mr. Taubman included a grant of 60,000 LTIP Units with a grant date fair value of $3,198,000, which vest over a three year period. If the 2019 annual compensation for Mr. Taubman was calculated based on the methodology applied in the table under “Compensation of Our Executive Officers—Elements of Our Compensation Program—Alternative Presentation of Annual Compensation,” which is reflective of compensation related to the 2019 performance year and includes the prorated portion of the 60,000 LTIPs for the twelve months in 2019, the total annual compensation for Mr. Taubman for 2019 would be $2,066,000, resulting in a ratio of the annual total compensation of Mr. Taubman to the annual total compensation of our median employee of approximately 7 to 1. Background. There has been no significant change in the structure of our employee population, our employee compensation arrangements or our median employee’s circumstances that we believe would significantly impact our pay ratio disclosure. Thus, as permitted by SEC rules, we calculated the 2019 pay ratio set forth above using the same median employee that we used to calculate our 2018 pay ratio. As required by SEC rules, after determining that our median employee will be the median employee for purposes of this pay ratio, we calculated 2019 annual total compensation for both our median employee and Mr. Taubman using the same methodology that we use to determine our named executive officers’ annual total compensation for the Summary Compensation Table. We identified our median employee using our employee population, excluding Mr. Taubman as well as independent contractors and consultants, as of December 31, 2018. To identify our median employee, we used (1) base salary, (2) cash bonus awarded in respect of such year’s performance, and (3) long-term incentives awarded in respect of such year’s performance. We believe this consistently applied compensation measure reasonably reflects annual compensation across our employee base. This methodology was also applied to compensation reflected for our Named Executive Officers in the table under “Compensation of Our Executive Officers—Elements of Our Compensation Program—Alternative Presentation of Annual Compensation” and represents compensation in the manner considered by our Compensation Committee for determining annual compensation. Equity Compensation Plan Information Our Omnibus Incentive Plan provides for grants of incentive stock options,non-qualified stock appreciation rights, restricted shares, restricted stock units and other equity-based awards, including Partnership Units and LTIP Units, and other stock-based or cash-based awards. The Omnibus Incentive Plan provides that the total number of shares of Class A common stock, Partnership Units or LTIP Units that may be issued for new awards granted under the Omnibus Incentive Plan is 7,000,000 (counting the number of shares of Class A common stock into which any Partnership Units or LTIP Units are, or may become, exchangeable and subject to the reallocation provisions of the Partnership Agreement). For further discussion of the Omnibus Incentive Plan, see Note 10 to our 2017 audited financial statements included in our Annual Report on Form10-K for the year ended December 31, 2017.
The following table presents certain information about our equity compensation plans as of December 29, 2017:31, 2019: | | | | | | | | | | | | | Plan Category | | Number of securities
to be issued
upon exercise of
outstanding options,
warrants and rights | | | Weighted-
average exercise
price of
outstanding
options, warrants
and rights | | | Number of securities
remaining available
for future issuance
under equity
compensation plans
(excluding securities
reflected in the first
column) | | Approved by security holders | | | | | | | | | | | | | Omnibus Incentive Plan | | | 6,768,411 | (1) | | | N/A | (1) | | | 10,231,589 | (2) | Not Approved by security holders | | | | | | | | | | | | | None | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | Plan Category
| | Number of
securities to be
issued
upon exercise of
outstanding
options, warrants
and rights | | | Weighted-
average exercise
price of
outstanding
options, warrants
and rights | | | Number of securities
remaining available
for future issuance
under equity
compensation plans
(excluding securities
reflected in the first
column) | | Approved
| | | | | | | | | | | | | PJT Partners Inc. 2015 Omnibus Incentive Plan
| | | 2,600,988(1) | | | | N/A(1) | | | | 4,399,012(2) | | Not Approved
| | | | | | | | | | | | | None
| | | — | | | | — | | | | — | |
| (1) | Consists of 2,600,988 restricted stock units and LTIP Units granted under the Omnibus Incentive Plan, which do not have an exercise price. |
| (2) | Consists of shares of Class A common stock issuable under the Omnibus Incentive Plan pursuant to various awards that the Compensation Committee may make, including stock options, stock appreciation rights, restricted shares, restricted stock units and other equity-based awards, including Partnership Units and LTIP Units. |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table sets forth, as of March 5, 2018,3, 2020, information regarding the beneficial ownership of our Class A common stock and Class B common stock and PJT Partners Holdings Partnership Units and Founder Units held by: (1) each person, or group of affiliated persons, known by us to beneficially own more than 5% of any class of our outstanding voting securities; (2) each of our directors; (3) each of our Named Executive Officers; and (4) all of our current directors and Named Executive Officers as a group. Percentage of beneficial ownership is based upon: (1) 19,158,33224,275,346 shares of our Class A common stock issued and outstanding; (2) 33,297,57439,861,228 Partnership Units outstanding, including 19,158,33224,275,346 Partnership Units held by PJT Partners Inc.; and (3) 19,158,54524,275,555 votes associated with Class A common stock and Class B common stock on director elections and 39,426,34943,397,216 votes associated with Class A common stock and Class B common stock on all other matters, in each case, as of March 5, 2018.3, 2020. To our knowledge, except as set forth in the footnotes to this table, and subject to applicable community property laws, each person named in the table has sole voting and investment power with respect to the shares set forth opposite such person’s name. The number of shares of Class A common stock, Class B common stock and Partnership Units shown as beneficially owned by each director and Named Executive Officer was determined in accordance with SEC rules, and the information is not necessarily indicative of beneficial ownership for any other purpose. Beneficial ownership includes any shares of Class A common stock as to which a person has the right to acquire within 60 days of March 3, 2020 through the delivery of shares of Class A common stock underlying restricted stock units. Except as otherwise indicated, the address of each of the persons in this table is as follows: c/o PJT Partners Inc., 280 Park Avenue, New York, New York 10017. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Shares of Class
A Common
Stock
Beneficially
Owned(1) | | | Shares of
Class B
Common
Stock
Beneficially
Owned(2) | | | Partnership
Units
Beneficially
Owned(1)(2)(3) | | | Combined
Voting Power
in Director
Elections and
Removals(2)(4)(5) % | | | Combined
Voting
Power in All
Other
Matters(2)(4)(5) % | | Name of Beneficial Owner | | Number | | | % of
Class | | | Number | | | % of
Class | | 5% Shareholders: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | BlackRock, Inc.(6) | | | 1,617,021 | | | | 6.7 | | | | — | | | | — | | | | — | | | | 8.5 | | | | 3.7 | | Eagle Asset Management, Inc.(7) | | | 1,358,443 | | | | 5.6 | | | | — | | | | — | | | | — | | | | 7.1 | | | | 3.1 | | Stephen A. Schwarzman(8) | | | 1,175,663 | | | | 4.8 | | | | 7 | | | | 4,600,074 | | | | 11.5 | | | | 6.1 | | | | 2.7 | | Directors and Executive Officers: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Paul J. Taubman | | | 460,000 | | | | 1.9 | | | | 1 | | | | 4,030,000 | | | | 10.1 | | | | 2.4 | | | | 27.8 | | James Costos(9) | | | 2,600 | | | | * | | | | — | | | | — | | | | — | | | | * | | | | * | | Dennis S. Hersch(9) | | | 22,861 | | | | * | | | | — | | | | — | | | | — | | | | * | | | | * | | Emily K. Rafferty(9) | | | 4,861 | | | | * | | | | — | | | | — | | | | — | | | | * | | | | * | | Thomas M. Ryan(9) | | | 14,861 | | | | * | | | | — | | | | — | | | | — | | | | * | | | | * | | Kenneth C. Whitney(9)(10) | | | 43,746 | | | | * | | | | 2 | | | | 152,149 | | | | * | | | | * | | | | * | | James W. Cuminale | | | 61,216 | (12) | | | * | | | | 1 | | | | 130,000 | (13) | | | * | | | | * | | | | * | | Ji-Yeun Lee | | | 105,874 | | | | * | | | | 1 | | | | 645,000 | | | | 1.6 | | | | * | | | | * | | Helen T. Meates(11) | | | 45,679 | | | | * | | | | 1 | | | | 120,000 | | | | * | | | | * | | | | * | | Directors and executive officers
as a group (9 persons) | | | 761,698 | | | | 3.1 | | | | 6 | | | | 5,077,149 | | | | 12.7 | | | | 4.0 | | | | 31.7 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Shares of Class A
Common Stock
Beneficially Owned(1) | | | Shares of
Class B
Common
Stock
Beneficially
Owned(2) | | | Partnership Units
Beneficially Owned
(1)(2)(3) | | | Combined
Voting
Power in
Director
Elections
and
Removals
(2)(4)(5) | | | Combined
Voting
Power in
All Other
Matters
(2)(4)(5) | | Name of Beneficial Owner | | Number | | | % of
Class | | | | Number | | | % of
Class | | | % | | | % | | 5% Stockholders: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | BlackRock, Inc.(6) | | | 1,224,652 | | | | 6.6 | | | | — | | | | — | | | | — | | | | 6.4 | | | | 3.1 | | Stephen A. Schwarzman(7) | | | 1,175,663 | | | | 6.3 | | | | 8 | | | | 4,600,074 | | | | 13.8 | | | | 6.1 | | | | 3.0 | | Sessa Capital IM, L.P.(8) | | | 1,427,008 | | | | 7.9 | | | | — | | | | — | | | | — | | | | 7.4 | | | | 3.6 | | | | | | | | | | Directors and Executive Officers: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Paul J. Taubman | | | 450,000 | | | | 2.3 | | | | 1 | | | | 2,750,000 | | | | 8.3 | | | | 2.3 | | | | 31.0 | | James Costos(9) | | | 2,600 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | Dennis S. Hersch(9) | | | 18,000 | | | | * | | | | — | | | | — | | | | — | | | | * | | | | * | | Emily K. Rafferty(9) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | Thomas M. Ryan(9) | | | 10,000 | | | | * | | | | — | | | | — | | | | — | | | | * | | | | * | | Kenneth C. Whitney(9)(10) | | | 38,885 | | | | * | | | | 2 | | | | 152,149 | | | | * | | | | * | | | | * | | Ji-Yeun Lee | | | 53,916 | | | | * | | | | 1 | | | | 455,000 | | | | 1.4 | | | | * | | | | * | | Helen T. Meates(11) | | | 20,515 | | | | * | | | | 1 | | | | 100,000 | | | | * | | | | * | | | | * | | James W. Cuminale | | | 52,318 | | | | * | | | | 1 | | | | 100,000(12) | | | | * | | | | * | | | | * | | Directors and executive officers as a group (9 persons) | | | 646,234 | | | | 3.4 | | | | 6 | | | | 3,557,149 | | | | 10.7 | | | | 3.4 | | | | 35.1 | |
| * | * Represents less than one percent.
|
| (1) | Subject to the terms of the Exchange Agreement, the Partnership Units may be exchanged for cash equal to the then-current market value of an equal number of shares of our Class A common stock (determined in accordance with and subject to adjustment under the Exchange Agreement), or, at our election, for shares of our Class A common stock on aone-for-one basis, subject to customary conversion rate adjustments for splits, unit distributions and reclassifications. See “Certain Relationships and Related |
| Person Transactions—Exchange Agreement.” Beneficial ownership of Partnership Units reflected in this table has not been reflected as beneficial ownership of shares of our Class A common stock for which such units may be exchanged. Percentage of Partnership Units treats Partnership Units held by PJT Partners as outstanding. |
| (2) | The shares of Class B common stock have no economic rights but entitle the stockholder,shareholder, without regard to the number of shares of Class B common stock held, to a number of votes that is equal to the aggregate number of vested and unvested Partnership Units and LTIP Units in PJT Partners Holdings held by such stockholdershareholder on all matters presented to stockholdersshareholders of PJT Partners other than director elections and removals. With respect to the election and removal of directors of PJT Partners, shares of Class B common stock will initially entitle stockholdersshareholders to only one vote per share, representing significantly less than one percent of the voting power entitled to vote thereon. However, the voting power of Class B common stock with respect to the election and removal of directors of PJT Partners may be increased to up to the number of votes to which a stockholdershareholder is then entitled on all other matters presented to stockholders.shareholders. The voting power on applicable matters afforded to holders of partnership interests by their shares of Class B common stock is automatically and correspondingly reduced as they exchange Partnership Units for cash or |
| for shares of Class A common stock pursuant to the Exchange Agreement. If at any time the ratio at which Partnership Units are exchangeable for shares of Class A common stock changes fromone-for-one as described under “Certain Relationships and Related Person Transactions—Exchange Agreement,” the number of votes to which Class B common stockholders are entitled on applicable matters will be adjusted accordingly. Holders of shares of our Class B common stock will vote together with holders of our Class A common stock as a single class on all matters on which stockholdersshareholders are entitled to vote generally, except as otherwise required by law. |
| (3) | Does not reflect 3,050,000, 475,0001,830,000, 285,000, 30,000 and 50,00045,000Earn-Out Units received by Mr. Taubman, Ms. Lee, and Ms. Meates and Mr. Cuminale, respectively, on October 1, 2015 in connection with the merger andspin-off transactions.transactions that have yet to satisfy performance vesting requirements. |
| (4) | Represents percentage of voting power of the Class A common stock and Class B common stock voting together as a single class. |
| (5) | In connection with the merger andspin-off transactions, Blackstone’s senior management, including Mr. Schwarzman and all of Blackstone’s other executive officers, have provided an irrevocable proxy to Mr. Taubman to vote their shares of Class B common stock for so long as Mr. Taubman is the CEO of PJT Partners. The combined voting power information in this table gives effect to such proxy. |
| (6) | Based solely on information provided on a Schedule 13G/A filed with the SEC on January 29, 2018.February 5, 2020. The business address of BlackRock, Inc. is 55 East 52nd52nd Street, New York, New York 10055. |
| (7) | (7)Based solely on information provided on a Schedule 13G/A filed with the SEC on January 6, 2020. The business address of Eagle Asset Management, Inc. is 880 Carillon Parkway, St. Petersburg, Florida 33716. |
| (8) | Based solely on representations made by agents of Mr. Schwarzman with respect to his direct and indirect beneficial ownership. The business address of Mr. Schwarzman is c/o The Blackstone Group L.P.Inc., 345 Park Avenue, New York, New York 10154. Includes the following shares and units held for the benefit of family members with respect to which Mr. Schwarzman disclaims beneficial ownership: 14,55015,360 shares of Class A common stock, 3 shares of Class B common stock and 56,93560,106 Partnership Units held in various trusts for which Mr. Schwarzman is the investment trustee; includes 3,1812,371 shares of Class A common stock, 2 shares1 share of Class B common stock and 12,4519,279 Partnership Units held in grantor retained annuity trusts for which Mr. Schwarzman is the investment trustee; and includes 7,320 shares of Class A common stock, 1 share of Class B common stock and 28,643 Partnership Units held by a corporation for which Mr. Schwarzman is the controlling stockholder.shareholder. Mr. Schwarzman also directly, or through a corporation for which he is the controlling stockholder,shareholder, beneficially owns an additional 2,218 shares of Class A common stock, 1 share of Class B common stock and 8,680 Partnership Units. In addition, the above table excludes Class A shares, Class B shares and Partnership Units held by Mr. Schwarzman’s children or in trusts for the benefit of his family as to which he has no voting or investment control. |
| (8) | Based solely on information provided on a Schedule 13G/A filed with the SEC on February 14, 2018. The business address of Sessa Capital IM, L.P. is 1350 Avenue of the Americas, New York, New York, 10019.
|
| (9) | Does not reflect 3,122, 17,107, 4,818, 16,6197,924, 16,369, 3,971, 19,846 and 4,8183,971 restricted stock units received by Mr. Costos, Mr. Hersch, Ms. Rafferty, Mr. Ryan and Mr. Whitney, respectively. |
| (10) | Includes 1,725 shares of Class A common stock, 1 share of Class B common stock and 6,750 Partnership Units held in a trust for which Mr. Whitney is the investment trustee. |
| (11) | Includes 286 shares of Class A common stock beneficially owned by Ms. Meates’s children, for which Ms. Meates disclaims beneficial ownership. |
| (12) | (12)Includes 23,641 shares of Class A common stock held by a grantor retained annuity trust, of which Mr. Cuminale serves as the trustee. |
| (13) | Founder Units held in a family limited liability company whichthat is controlled by Mr. Cuminale. |
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires our directors, executive officers and persons who own more than ten percent of a registered class of our equity securities to file reports of holdings of, and transactions in, our shares with the SEC. Reports filed with the SEC detailing purchases and sales of our equity securities by such persons may be found on our corporate website at www.pjtpartners.com under “Investor Relations/Financial Reports/SEC Filings.” To the best of our knowledge, based solely on copies of such reports and representations from these reporting persons, we believe that in 2017, our directors, executive officers and ten percent stockholders met all applicable SEC filing requirements.
CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS Our Board of Directors has adopted a written statement of policy regarding transactions with related persons, which we refer to as our “related person policy.” Our related person policy requires that a “related person” (as defined as in paragraph (a) of Item 404 ofRegulation S-K) must promptly disclose to our general counsel, or such other person designated by our board of directors,Board, any “related person transaction” (defined as any transaction that is anticipated would be reportable by us under Item 404(a) ofRegulation S-K in which we were or are to be a participant and the amount involved exceeds $120,000 and in which any related person had or will have a direct or indirect material interest) and all material facts with respect thereto. The general counsel, or such other person, will then promptly communicate that information to our Board of Directors.Board. No related person transaction will be executed without the approval or ratification of our Board of Directors or a duly authorized committee of our Board of Directors.Board. It is our policy that directors interested in a related person transaction will recuse themselves from any vote on a related person transaction in which they have an interest. Exchange Agreement We have entered into an exchange agreement with the limited partners of PJT Partners Holdings pursuant to which they (or certain permitted transferees) have the right, subject to the terms and conditions set forth in the limited partnership agreement of PJT Partners Holdings, on a quarterly basis, to exchange all or part of their Partnership Units for cash or, at our election, for shares of our Class A common stock on aone-for-one basis, subject to customary conversion rate adjustments for splits, unit distributions and reclassifications. Pursuant to the terms of the partnership agreement of PJT Partners Holdings, the company may also require holders of Partnership Units who are not service providersService Providers (as defined in the partnership agreement of PJT Partners Holdings) to the company to exchange their Partnership Units. The price per Partnership Unit to be received in a cash-settled exchange will be equal to the fair value of a share of our Class A common stock (determined in accordance with and subject to adjustment under the exchange agreement). In the event cash-settled exchanges of Partnership Units are funded with new issuances of Class A common stock, the fair value of a share of our Class A common stock will be deemed to be equal to the net proceeds per share of Class A common stock received by PJT Partners in the related issuance. Accordingly, in this event, the price per Partnership Unit to which an exchanging Partnership Unitholder will be entitled may be greater than or less than the then-current market value of our Class A common stock. The exchange agreement also provides that a holder of Partnership Units will not have the right to exchange Partnership Units in the event that PJT Partners determines that such exchange would be prohibited by law, would result in any breach of any debt agreement or other material contract of PJT Partners or PJT Partners Holdings, or, subject to certain limitations, would cause unreasonable financial burden on PJT Partners Holdings. Registration Rights Agreement We have entered into a registration rights agreement with the limited partners of PJT Partners Holdings pursuant to which we granted them, their affiliates and certain of their transferees the right, under certain circumstances and subject to certain restrictions, to require us to register under the Securities Act shares of Class A common stock delivered in exchange for Partnership Units. In addition, in the event that any holder or group of holders that elect to exchange Partnership Units with a cash value of at least $75 million (determined in accordance with the registration rights agreement) in respect of any quarterly exchange date, a demand committee comprised of certain Partnership Unitholders will have the right to request that we facilitate a registered underwritten offering with respect to (1) the sale by such holder(s) of Class A common stock delivered to such holder(s) in exchange for such Partnership Units (in the event that we elect to settle such exchange in shares of Class A common stock); or (2) the sale by us of Class A common stock to fund the cash-settled exchanges of such Partnership Units (in the event that we elect to settle such exchange in cash); provided, however, that we will not be obligated to effect any such requested registration within 180 days after the effective date of a previous registration pursuant to the registration rights agreement. In addition, we have the right to defer effecting a demand for a maximum of 60 days in certain circumstances, not to exceed 90 days in any365-day period, including if such demand could materially interfere with a bona fide business or financing transaction. Holders of Partnership Units also have the ability to exercise certain piggyback registration rights in respect of registered offerings requested by other registration rights holders or initiated by us, subject to customarycut-back provisions. Tax Receivable Agreement Holders of Partnership Units (other than PJT Partners) may, subject to the terms and conditions set forth in the partnership agreement of PJT Partners Holdings, on a quarterly basis (subject to the terms of the exchange agreement) exchange their Partnership Units for cash or, at our election, for shares of Class A common stock of PJT Partners on aone-for-one basis. PJT Partners Holdings intends to makehas made an election under Section 754 of the Internal Revenue Code of 1986 (the “Code”) effective for each taxable year in which an exchange of Partnership Units for cash or for shares of Class A common stock occurs, which is expected to result in increases to the tax basis of the assets of PJT Partners Holdings at the time of an exchange of Partnership Units. Stock-settled exchanges and certain of these cash-settled exchanges are expected to result in increases in the tax basis of the tangible and intangible assets of PJT Partners Holdings. These increases in tax basis may reduce the amount of tax that PJT Partners would otherwise be required to pay in the future. These increases in tax basis may also decrease gains (or increase losses) on future dispositions of certain capital assets to the extent tax basis is allocated to those capital assets. The Internal Revenue Service (the “IRS”) may challenge all or part of the tax basis increase and increased deductions, and a court could sustain such a challenge. We have entered into a tax receivable agreement with the holders of Partnership Units (other than PJT Partners) that provides for the payment by PJT Partners to exchanging holders of Partnership Units of 85% of the benefits, if any, that PJT Partners is deemed to realize as a result of these increases in tax basis related to such exchanges of Partnership Units and of certain other tax benefits related to entering into the tax receivable agreement, including tax benefits attributable to payments under the tax receivable agreement. This payment obligation is an obligation of PJT Partners and not of PJT Partners Holdings. PJT Partners expects to benefit from the remaining 15% of cash tax savings, if any, in income tax it realizes. For purposes of the tax receivable agreement, the cash tax savings in income tax is computed by comparing the actual income tax liability of PJT Partners (calculated with certain assumptions) to the amount of such taxes that PJT Partners would have been required to pay had there been no increase to the tax basis of the assets of PJT Partners Holdings as a result of the exchanges and had PJT Partners not entered into the tax receivable agreement. The term of the tax receivable agreement continues until all such tax benefits have been utilized or expired, unless PJT Partners exercises its right to terminate the tax receivable agreement for an amount based on the agreed payments remaining to be made under the agreement (as described in more detail below) or PJT Partners breaches any of its material obligations under the tax receivable agreement in which case all obligations generally will be accelerated and due as if PJT Partners had exercised its right to terminate the tax receivable agreement. Estimating the amount of payments that may be made under the tax receivable agreement is by its nature imprecise, insofar as the calculation of amounts payable depends on a variety of factors. The actual increase in tax basis, as well as the amount and timing of any payments under the tax receivable agreement, will vary depending upon a number of factors, including: | | • | | the timing of exchanges—for instance, the increase in any tax deductions will vary depending on the fair market value, which may fluctuate over time, of the depreciable or amortizable assets of PJT Partners Holdings at the time of each exchange; |
| | • | | the price of shares of our Class A common stock at the time of the exchange—the increase in any tax deductions, as well as the tax basis increase in other assets, of PJT Partners Holdings, is directly proportional to the cash price for the applicable Partnership Units (in the case of a cash-settled exchange) or the price of shares of our Class A common stock at the time of the exchange (in the case of a stock-settled exchange); |
| | • | | the extent to which such exchanges are taxable—if an exchange is not taxable for any reason, increased deductions will not be available; and |
| | • | | the amount and timing of our income—PJT Partners is required to pay 85% of the cash tax savings as and when realized, if any. If PJT Partners does not have taxable income, PJT Partners is not generally required (absent a change of control or circumstances requiring an early termination payment) to make payments under the tax receivable agreement for that taxable year because no cash tax savings will have been realized. However, any cash tax savings that do not result in realized benefits in a given tax year will likely generate tax attributes that may be utilized to generate benefits in previous or future tax years. The utilization of such tax attributes will result in payments under the tax receivables agreement. |
We will account for the effects of these increases in tax basis and associated payments under the tax receivable agreement arising from exchanges as follows: we record an increase in deferred tax assets for the estimated income tax effects of the increases in tax basis based on enacted federal, state and local tax rates at the date of the exchange; to the extent we estimate that we will not realize the full benefit represented by the deferred tax asset, based on an analysis that will consider, among other things, our expectation of future earnings, we reduce the deferred tax asset with a valuation allowance; and we record 85% of the estimated realizable tax benefit (which is the recorded deferred tax asset less any recorded valuation allowance) as an increase to the amount due pursuant to the tax receivable agreement and the remaining 15% of the estimated realizable tax benefit as an increase to additionalpaid-in capital. The effects of changes in estimates after the date of the redemption or exchange as well as subsequent changes in the enacted tax rates are included in net income. We expect that as a result of the size of the transfers and increases in the tax basis of the tangible and intangible assets of PJT Partners Holdings, the payments that we may make under the tax receivable agreement will be substantial. There may be a material negative effect on our liquidity if, as a result of timing discrepancies or otherwise, the payments under the tax receivable agreement exceed the actual cash tax savings that PJT Partners realizes in respect of the tax attributes subject to the tax receivable agreement and/or distributions to PJT Partners by PJT Partners Holdings are not sufficient to permit PJT Partners to make payments under the tax receivable agreement after it has paid taxes. Late payments under the tax receivable agreement generally will accrue interest at an uncapped rate equal to LIBOR plus 500 basis points. The payments under the tax receivable agreement are not conditioned upon continued ownership of us by holders of Partnership Units. In addition, the tax receivable agreement provides that upon certain changes of control, PJT Partners’ (or its successor’s) obligations with respect to acquired or exchanged Partnership Units (whether acquired or exchanged before or after such transaction) would be based on certain assumptions, including that PJT Partners would have sufficient taxable income to fully utilize the deductions arising from the increased tax deductions and tax basis and other benefits related to entering into the tax receivable agreement. Furthermore, PJT Partners may elect to terminate the tax receivable agreement early by making an immediate payment equal to the present value of the anticipated future cash tax savings. In determining such anticipated future cash tax savings, the tax receivable agreement includes several assumptions, including: (1) that any Partnership Units that have not been exchanged are deemed exchanged for the market value of the shares of Class A common stock at the time of termination; (2) PJT Partners will have sufficient taxable income in each future taxable year to fully realize all potential tax savings; (3) the tax rates for future years will be those specified in the law as in effect at the time of termination; and (4) certainnon-amortizable assets are deemed disposed of within specified time periods. In addition, the present value of such anticipated future cash tax savings are discounted at a rate equal to LIBOR plus 100 basis points. As a result of the change in control provisions and the early termination right, PJT Partners could be required to make payments under the tax receivable agreement that are greater than the specified percentage of the actual cash tax savings that PJT Partners realizes in respect of the tax attributes subject to the tax receivable agreement. In these situations, our obligations under the tax receivable agreement could have a substantial negative impact on our liquidity. Decisions made by our officers and directors in the course of running our business may influence the timing and amount of payments that are received by an exchanging or selling existing owner under the tax receivable agreement. For example, the earlier disposition of assets following an acquisition or exchange transaction generally will accelerate payments under the tax receivable agreement and increase the present value of such payments, and the disposition of assets before an acquisition or exchange transaction will increase an existing owner’s tax liability without giving rise to any rights of an existing owner to receive payments under the tax receivable agreement. Payments under the tax receivable agreement are based on the tax reporting positions that we determine. PJT Partners will not be reimbursed for any payments previously made under the tax receivable agreement if a tax basis increase is successfully challenged by the IRS. As a result, in certain circumstances, payments could be made under the tax receivable agreement in excess of PJT Partners’ cash tax savings. PJT Partners Holdings LP Amended and Restated Limited Partnership Agreement PJT Partners holds Partnership Units in PJT Partners Holdings and is the sole general partner of PJT Partners Holdings. Accordingly, PJT Partners operates and controls all of the business and affairs of PJT Partners Holdings and, through PJT Partners Holdings and its operating subsidiaries, conducts our business. The limited partnership agreement of PJT Partners Holdings provides that substantially all expenses incurred by or attributable to PJT Partners, (such as expenses incurred in connection with thespin-off), but not including obligations incurred under the tax receivable agreement by PJT Partners, income tax expenses of PJT Partners and payments on indebtedness incurred by PJT Partners, are borne by PJT Partners Holdings. Pursuant to the limited partnership agreement of PJT Partners Holdings, PJT Partners has the right to determine when distributions will be made to holders of Partnership Units and the amount of any such distributions (other than tax distributions described below). If a distribution is authorized, such distribution will be made to the holders of Partnership Units pro rata in accordance with the percentages of their respective partnership interests that are entitled to participate in distributions. The holders of Partnership Units, including PJT Partners, will incur U.S. federal, state and local income taxes on their proportionate share of any taxable income of PJT Partners Holdings. Except for the priority allocations of income in respect of LTIP Units described below, net profits and net losses of PJT Partners Holdings will generally be allocated to its holders (including PJT Partners) pro rata in accordance with the percentages of their respective partnership interests, except as otherwise required by law. In accordance with the partnership agreement, we intend to cause PJT Partners Holdings to make pro rata cash distributions, to the extent of available cash, to the holders of the partnership interests in PJT Partners Holdings in amounts equal to 50% of the taxable income allocated to such holders for purposes of funding their tax obligations in respect of the income of PJT Partners Holdings that is allocated to them. For 2017,2019, Mr. Taubman, Ms. Lee, Ms. Meates and Mr. Cuminale received $5,317,897, $852,697, $137,532$3,372,775, $482,214, $68,828 and $160,454,$74,465, respectively, as regular distributions on limited partnership units.their Partnership Units. The limited partnership agreement of PJT Partners Holdings provides that PJT Partners may not engage in, or cause or permit, a Termination Transaction (as defined below), other than with the consent of limited partners holding a majority of all the outstanding Partnership Units (other than Partnership Units held by PJT Partners and entities controlled by PJT Partners), including each limited partner that held, immediately following the closing of the merger andspin-off transactions in 2015, and, as of any subsequent date of determination, holds, not less than five percent (5%) of the total number of Partnership Units then outstanding (a “Significant Limited Partner”), or if the requirements discussed below are satisfied. A “Termination Transaction” means any direct or indirect transfer of all or any portion of PJT Partners’ interest in PJT Partners Holdings in connection with, or any other occurrence of: a merger, consolidation or other combination transaction involving PJT Partners; a sale, lease, exchange or other transfer of all or substantially all of the assets of PJT Partners not in the ordinary course of business, whether in a single transaction or a series of related transactions; a reclassification, recapitalization or change of the outstanding shares of our Class A common stock (other than a change in par value, or from par value to no par value, or as a result of a stock split, stock dividend or similar subdivision, including in connection with the distribution, exchange, redemption or exercise of rights under our stockholdershareholder rights agreement or securities issuable in respect of such rights); the adoption of any plan of liquidation or dissolution of PJT Partners; or any other direct or indirect transfer of all or any portion of PJT Partners’ interest in PJT Partners Holdings, other than certain permitted transfers to affiliated entities. Such consent of limited partners to a Termination Transaction is not required if either: (1) in connection with the Termination Transaction: (i) each holder of Partnership Units is entitled to receive the “transaction consideration,” defined as the fair market value, at the time of the Termination Transaction, of an amount of cash, securities or other property equal to the product of: the number of shares of our Class A common stock into which a Partnership Unit is then exchangeable; and the greatest amount of cash, securities or other property paid per share to the holder of any shares of our Class A common stock in consideration of such shares in connection with the Termination Transaction; provided that, if, in connection with the Termination Transaction, a purchase, tender or exchange offer is made to and accepted by the holders of a majority of the outstanding shares of our Class A common stock, the transaction consideration will refer to the fair market value of the greatest amount of cash, securities or other property which such holder would have received had it exercised its exchange right and received shares of our Class A common stock in exchange for its Partnership Units immediately prior to the expiration of such purchase, tender or exchange offer and had accepted such purchase, tender or exchange offer; and (ii) PJT Partners Holdings receives an opinion from nationally recognized tax counsel to the effect that such Termination Transaction will betax-free to each holder of Partnership Units (other than PJT Partners and entities controlled by PJT Partners) for U.S. federal income tax purposes (except to the extent of cash received); or (2) all of the following conditions are met: substantially all of the assets directly or indirectly owned by PJT Partners Holdings prior to the announcement of the Termination Transaction are, immediately after the Termination Transaction, owned directly or indirectly by (x) PJT Partners Holdings or (y) another limited partnership or limited liability company organized or existing under the laws of the United States, any state thereof, the District of Columbia, or any territory thereof, which is the survivor of a merger, consolidation or combination of assets with PJT Partners Holdings, which we refer to as the “surviving partnership,” the surviving partnership is classified as a partnership for U.S. federal income tax purposes; each holder of Partnership Units (other than PJT Partners and entities controlled by PJT Partners) that held Partnership Units immediately prior to the closing of such Termination Transaction owns a percentage interest of the surviving partnership based on the relative fair market value of the net assets of PJT Partners Holdings and the other net assets of the surviving partnership immediately prior to the consummation of such transaction; and the rights of such limited partners with respect to the surviving partnership are at least as favorable as those of limited partners prior to the consummation of such transaction and as those applicable to any other limited partners ornon-managing members of the surviving partnership, and such rights include: (a) if PJT Partners or its successor has a single class of publicly traded common equity securities, the right, to the same extent provided to holders of Partnership Units pursuant to the exchange agreement, to exchange their interests in the surviving partnership for either: (1) a number of such publicly traded common equity securities with a fair market value, as of the date of consummation of such Termination Transaction, equal to the transaction consideration referred to above, subject to customary conversion rate adjustments for splits, unit distributions and reclassifications, which we refer to as the “successor shares amount;” or (2) cash in an amount equal to the fair market value of the successor shares amount at the time of such exchange; or (b) if PJT Partners or its successor does not have a single class of publicly traded common equity securities, the right to exchange their interests in the surviving partnership on a quarterly basis for cash in an amount equal to the fair market value of such interest at the time of exchange, as determined at least once every calendar quarter by an independent appraisal firm of recognized national standing retained by the surviving partnership. For the purpose of determining compliance with the condition set forth in the third bullet above, the relative fair market values shall be reasonably determined by PJT Partners as of the time of such transaction and, to the extent applicable, shall be no less favorable to the holders of Partnership Units than the relative values reflected in the terms of such transaction. The limited partnership agreement of PJT Partners Holdings also provides the limited partners with certain consent rights in the event a majority of our board of directorsBoard ceases to be Continuing Directors (as defined below) (such event, a “Board Change of Control”). “Continuing Directors” means as of any date of determination, any member of our board of directorsBoard who: (1) was a member immediately following the consummation byof the merger andspin-off;spin-off transactions in 2015; or (2) was nominated for election or elected or appointed with the approval of a majority of the Continuing Directors who were members at the time of such nomination, election or appointment, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a person other than the board of directors.Board. From and after the occurrence of a Board Change of Control, the following actions will require the approval of limited partners representing a majority in interest of all limited partners (excluding any limited partners controlled by PJT Partners), including each Significant Limited Partner: any removal or appointment of any “officer,” as defined in Rule16a-1(f) of the Exchange Act, including the Chief Executive Officer,CEO, of PJT Partners; the creation, authorization or issuance of any new class or series of equity interest in PJT Partners Holdings; the incurrence of any indebtedness (other than intercompany indebtedness) by PJT Partners Holdings or any of its subsidiaries or controlled affiliates that would, or is intended to, result in a material increase in the amount of consolidated indebtedness of PJT Partners Holdings as compared to immediately prior to such Board Change of Control; any extraordinary distribution of PJT Partners Holdings; any change in PJT Partners Holdings’ distribution policy that would, or that is intended to, result in a material increase in the amount or frequency of distributions as compared to levels prior to the Board Change of Control; any change in PJT Partners Holdings’ policy regarding Partnership Unit repurchases including without limitation from PJT Partners, that would, or that is intended to, result in a material increase in the amount or frequency of Partnership Unit repurchases as compared to levels prior to the Board Change of Control; any merger, consolidation or sale of all or any significant portion of the assets of PJT Partners Holdings; any voluntary liquidation, dissolution or winding up of PJT Partners Holdings or the commencement of a proceeding for bankruptcy, insolvency, receivership or similar action with respect to the PJT Partners Holdings or any of its subsidiaries or controlled affiliates; calling any meeting of the limited partners of PJT Partners Holdings or submitting any matter for the vote or consent of the limited partners of PJT Partners Holdings; any settlement or compromise of any litigation directly against or otherwise relating to indemnification of the PJT Partners or its directors or officers or their affiliates or representatives or any litigation regarding tax matters; or any amendment to the limited partnership agreement of PJT Partners Holdings. In addition, the limited partnership agreement of PJT Partners Holdings enables PJT Partners Holdings to issue LTIP Units pursuant to the Omnibus Incentive Plan. LTIP Units are a class of partnership interest that are intended to qualify as “profits interests” in PJT Partners Holdings for U.S. federal income tax purposes that, subject to certain conditions, shall automatically be converted into Partnership Units. LTIP Units initially do not have full parity, on a per unit basis, with Partnership Units with respect to liquidating distributions. Upon the occurrence of specified events, LTIP Units can over time achieve full parity with Partnership Units, at which time LTIP Units shall automatically be converted into Partnership Units on aone-for-one basis. The limited partnership agreement of PJT Partners Holdings provides that upon a sale of all or substantially all of the assets of PJT Partners Holdings, holders of LTIP Units will receive a priority allocation of income. The priority allocation will generally be made to the holders of LTIP Units until the capital account of each LTIP Unit equals the capital account of a Partnership Unit. In addition, the capital accounts of the LTIP Units will be increased in priority to the Partnership Units when PJT Partners Holdings revalues its assets. After the capital account balances of the LTIP Units have been increased such that each LTIP Unit has a capital account balance equal to that of a Partnership Unit, allocations of net income and net loss are made on aper-unit basis. The effect of these allocation provisions is to enable LTIP Units, which are issued with lower capital account balances than the Partnership Units, to participate in liquidating distributions of PJT Partners Holdings on the same basis as Partnership Units, assuming there is sufficient profit to allocate to the LTIP Units. LTIP Units may be issued to PJT Partners personnel and third parties from time to time in one or more series having the rights, powers, privileges, restrictions, qualifications and limitations set forth in the relevant award agreement or other documentation pursuant to which the LTIP Units of such series are granted or issued, including with respect to participation in distributions. PJT Partners Holdings has two series of LTIP Units outstanding, which were issued to certain individuals engaged in our business: a series of LTIP Units (“Participating LTIP Units”) issued to certain partners and employees that are subject to time-based vesting as described in “Narrative Disclosure Relating to the Summary Compensation Table, and the Grants of Plan-Based Awards Table, Outstanding Equity Awards at 2019 FiscalYear-End Table, and 2019 Option Exercises and Stock Vested Table—Merger andSpin-off Transaction Equity Grants—Founder Units,” and participate, from issuance, in all distributions of PJT Partners Holdings, other than liquidating distributions, ratably, on a per unit basis, with Partnership Units; and | Table—Merger andSpin-off Transaction Equity Grants—Founder Units,” and participate, from issuance, in all distributions of PJT Partners Holdings, other than liquidating distributions, ratably, on a per unit basis, with Partnership Units; and
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a series of LTIP Units(“Earn-Out Units”) issued to certain partners and employees of PJT Capital LP and other individuals engaged in our business that are subject to both time-based and performance-based vesting as described in “Narrative Disclosure Relating to the Summary Compensation Table, and the Grants of Plan-Based Awards Table, Outstanding Equity Awards at 2019 FiscalYear-End Table, and 2019 Option Exercises and Stock Vested Table—Merger andSpin-off Transaction Equity Grants—FounderEarn-Out Units,” and do not participate in any distributions of PJT Partners Holdings other than tax distributions unless and until the applicable performance vesting requirement for the relevant tranche is satisfied. Subject to the terms of any award or other applicable agreement, unvested partnership interests will be forfeited if the holder ceases to provide services to PJT Partners Holdings. Certain forfeited partnership interests will be subject to reallocation by our Compensation Committee in consultation with Mr. Taubman (or subject to other reallocations in accordance with the limited partnership agreement). In addition, the limited partnership agreement of PJT Partners Holdings provides that each Partnership Unit has attached to it a preferred unit purchase right. Such rights will become exercisable, if at all, at such time and to the same extent as the preferred stock purchase rights attached to shares of Class A common stock of PJT Partners shall become exercisable pursuant to the stockholder rights agreement we adopted prior to thespin-off. Each right entitles its holder to purchase at an exercise price per preferred unit equal to the exercise price per share of Series A preferred stock determined in accordance with the stockholder rights agreement (1) preferred units of PJT Partners Holdings, or (2) in lieu of such preferred units, a number of Partnership Units equal to the number of shares of Class A common stock that a holder of a right attached to a share of Class A common stock would be entitled to purchase pursuant to the stockholder rights agreement. In the event that holders of Class A common stock exercise or exchange the rights attached thereto for shares of Series A preferred stock, PJT Partners will exercise or exchange rights attached to Partnership Units held by PJT Partners for a corresponding number of preferred units of PJT Partners Holdings. In the event that holders of Class A common stock of PJT Partners exercise or exchange the rights attached thereto for additional shares of Class A common stock, PJT Partners will exercise or exchange rights attached to Partnership Units held by PJT Partners for a corresponding number of additional Partnership Units of PJT Partners Holdings. If at any time the ratio at which Partnership Units are exchangeable for shares of Class A common stock of PJT Partners changes fromone-for-one as described above under “—Exchange Agreement,” the number of preferred units or Partnership Units, as the case may be, to which a holder of Partnership Units is entitled to receive upon exercise of or in exchange for the preferred unit purchase rights attached thereto will be adjusted accordingly. Each preferred unit of PJT Partners Holdings has substantially the same rights and preferences with respect to distributions of PJT Partners Holdings in relation to Partnership Units as a share of Series A preferred stock of PJT Partners is entitled with respect to dividends and distributions of PJT Partners in relation to shares of Class A common stock.
REPORT OF THE AUDIT COMMITTEE The duties and responsibilities of the Audit Committee are set forth in our Audit Committee Charter, which can be found on our website, www.pjtpartners.com, under the “Investor Relations/Corporate Governance/Governance Documents” section. The Audit Committee has: selected the independent registered public accounting firm to audit our books and records; reviewed and discussed our audited financial statements for 20172019 with management and with Deloitte, our independent registered public accounting firm, and has held, as appropriate, executive sessions with Deloitte without the presence of management; discussed with our independent registered public accounting firm the matters required by the applicable standards of the Public Company Accounting Oversight Board (“PCAOB”) Auditing Standard No. 1301 “Communications with Audit Committees;”and the SEC; and received from Deloitte the written disclosures and the letter required by the applicable requirements of the PCAOB regarding the independent accountant’s communications with the Audit Committee concerning independence and has discussed with Deloitte its independence. In performing all of these functions, the Audit Committee acts in an oversight capacity. The Audit Committee reviews our quarterly and annual reports onForm 10-Q andForm 10-K, respectively, prior to filing with the SEC. In its oversight role, the Audit Committee relies on the work and assurances of: our management, which has the primary responsibility for establishing and maintaining adequate internal control over financial reporting and for preparing the financial statements, and other reports; and the independent registered public accounting firm, which is responsible for auditing our financial statements and expressing an opinion as to whether those audited financial statements fairly present, in all material respects, our financial position, results of operations, and cash flows in conformity with generally accepted accounting principles in the United States of America. Based on these reviews and discussions and the reports of the independent registered public accounting firm, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in ourForm 10-K for the fiscal year ended December 31, 20172019 filed with the SEC. Submitted by our Audit Committee: Kenneth C. Whitney, Chair Dennis S. Hersch Emily K. Rafferty The information in this report is not “soliciting material,” is not deemed filed with the SEC and is not to be incorporated by reference in any of our filings under the Securities Act or the Exchange Act whether made before or after the date hereof and irrespective of any general incorporation language in any such filings. PROPOSAL2—NON-BINDING ADVISORY VOTE ON EXECUTIVE COMPENSATION In accordance with the requirements of Section 14A of the Exchange Act and the related rules of the SEC, we are including in these proxy materials a separate resolution subject to stockholdershareholder vote to approve, in anon-binding advisory vote, the compensation of our Named Executive Officers as disclosed above. The text of the resolution in respect of Proposal 2 is as follows: “RESOLVED, that the compensation paid to the company’s Named Executive Officers as disclosed in this Proxy Statement pursuant to the rules of the SEC, including the Compensation Discussion and Analysis, compensation tables, and any related narrative discussion, is hereby APPROVED.” In considering their vote, stockholdersshareholders may wish to review with care the information on our compensation policies and decisions regarding the Named Executive Officers presented in the Compensation Discussion and Analysis set forth above. In particular, stockholdersshareholders should note that the Compensation Committee bases its executive compensation decisions on the following: Mr. Taubman’s total compensation is $1,000,000. Mr. Taubman did not receive annual incentive compensation with respect to performance years 2015 through 2017 and we do not anticipate paying Mr. Taubman annual incentive compensation through October 1, 2018, the third anniversary of the closing of the merger andspin-off transactions;
annual incentive compensation that places a strong emphasis on financial performance, with the flexibility to assess operational and individual performance; an appropriate link between compensation and the creation of stockholdershareholder value through equity awards; and long-term incentive awards that do not promote excessive risk taking. While the results of the vote arenon-binding and advisory in nature, the Board of Directors intends to carefully consider the results of the vote. Board of Directors Recommendation The Board of Directors recommends a vote “FOR”“FOR” the approval of the compensation of our Named Executive Officers. PROPOSAL 3—NON-BINDING ADVISORY VOTE ON THE FREQUENCY OF FUTURENON-BINDING ADVISORY VOTES ON EXECUTIVE COMPENSATION Section 14A of the Exchange Act enables our stockholders to vote on anon-binding, advisory basis how frequently we will submit “Say on Pay” proposals, similar to Proposal 2 to our stockholders in the future. Our stockholders have the following three alternatives to choose from: (1) every year (“1 year” on the proxy card), (2) every two years (“2 years” on the proxy card) or (3) every three years (“3 years” on the proxy card). In addition, our stockholders may choose to abstain from voting on this proposal.
The vote on this proposal is advisory in nature and will not be binding on or overrule any decisions by our Board of Directors. Our Compensation Committee values the opinions expressed by our stockholders and will take into account the outcome of the vote to determine the frequency of future advisory votes on executive compensation.
Board of Directors Recommendation
Our Board of Directors unanimously recommends that you vote for the holding of futurenon-binding advisory votes on the compensation of our Named Executive Officers every “1 YEAR”.
PROPOSAL 4—RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Our Audit Committee has selected Deloitte as our independent registered public accounting firm to perform the audit of our consolidated financial statements for 2018.2020. Representatives of Deloitte are expected to be present at our Annual Meeting, will have an opportunity to make a statement if they so desire and will be available to respond to appropriate questions. Board of Directors Recommendation The appointment of Deloitte as our independent registered public accounting firm is being submitted to our stockholdersshareholders for ratification at the Annual Meeting. Our Board of Directors recommends that the stockholdersshareholders vote “FOR” the ratification of the selection of Deloitte as our independent registered public accounting firm. The submission of the appointment of Deloitte is required neither by law nor by our Amended and Restated Bylaws. Our Board of Directors is nevertheless submitting it to our stockholdersshareholders to ascertain their views. If our stockholdersshareholders do not ratify the appointment, the selection of another independent registered public accounting firm may be considered by the Audit Committee. Even if the selection is ratified, the Audit Committee in its discretion may select a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of the company and our stockholders.shareholders. Audit Fees The following table sets forth aggregate fees billed to us by Deloitte for 20172018 and 2016:2019: | | | | Fiscal Year Ended December 31, | | Fiscal Year Ended
December 31, | | | | | 2017 | | 2016 | | 2018 | | | 2019 | | Audit Fees(1) | | $1,735,750 | | $1,647,030 | | $ | 1,747,600 | | | $ | 1,894,428 | | Audit Related Fees | | — | | — | | Audit-Related Fees | | | | — | | | | — | | Tax Fees(2) | | 1,097,100 | | 885,845 | | | 1,004,658 | | | | 981,454 | | All Other Fees | | — | | 95,000(3) | | | — | | | | — | | | | | | | | Total | | $2,832,850 | | $2,627,875 | | $ | 2,752,258 | | | $ | 2,875,882 | | | | | | | |
| (1) | Audit Fees include fees for services rendered for the audit and quarterly reviews of our consolidated financial statements filed with the SEC on Forms10-K and10-Q, respectively, as well as statutory and financial audits for our United States and foreign consolidated subsidiaries. |
| (2) | Tax fees represent fees for services performed by the independent registered public accounting firm’s tax personnel, except those services specifically related to the audit and review of the financial statements, and consisted of tax consulting and compliance professional services, including to our United States and foreign consolidated subsidiaries. |
| (3) | All Other Fees includes fees for services performed in connection with the company’s enterprise risk planning.
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Pre-Approval Policies and Procedures Our Audit Committee does not permit the engagement of our auditors withoutpre-approval by the Audit Committee. The engagement of Deloitte for permittednon-audit accounting and tax services is limited to circumstances where these services are considered integral to the audit services that Deloitte provides or where there is another compelling rationale for using Deloitte. All audit audit-related and permittednon-auditservices for which Deloitte was engaged during 20172019 werepre-approved by the Audit Committee in compliance with applicable SEC requirements. STOCKHOLDERSHAREHOLDER PROPOSALS AND NOMINATIONS FOR 20192021 ANNUAL MEETING
In order for a stockholdershareholder proposal to be included in our Proxy Statement to be issued in connection with our 20192021 Annual Meeting, that proposal must be received by our Corporate Secretary no later than November 19, 201820, 2020 (which is 120 calendar days before the anniversary of the date this Proxy Statement was first mailed or made available to stockholders)shareholders). In addition, eligible stockholdersshareholders who wish to submit director nominations or bring any business at the 20192021 Annual Meeting, including stockholdershareholder proposals to be included in our Proxy Statement, must comply with the advance notice procedures set forth in our Amended and Restated Bylaws. In order for such director nominations and other business to be deemed timely, notice of such director nominations and other business must be received by our Corporate Secretary (A) no earlier than January 1, 2019December 31, 2020 and no later than January 31, 201930, 2021 or (B) in the event that our 20192021 Annual Meeting of StockholdersShareholders is held prior to April 1, 2019March 31, 2021 or after July 10, 2019,9, 2021, notice by the stockholdershareholder must be so received no earlier than the 120th120th day prior to such Annual Meeting and no later than the close of business on the later of the 90th90th day prior to such Annual Meeting or the 10th10th day following the day on which public announcement of the date of the Annual Meeting is first made, and, in each case, must satisfy the notification, timeliness, consent and information requirements set forth in our Amended and Restated Bylaws. HOUSEHOLDING OF ANNUAL MEETING MATERIALS Some banks, brokers and other holders of record may be participating in the practice of “householding” proxy statements, annual reports or notices. This means that only one copy of our Proxy Materials or Notice of Availability, as applicable, may have been sent to multiple stockholdersshareholders in your household. If you want to receive separate copies of our Proxy Materials or Notice of Availability, or if you are receiving multiple copies and would like to receive only one copy per household, you should contact your bank, broker or other holder of record, or you may contact the Corporate Secretary as set forth above. OTHER MATTERS Our Board of Directors does not know of any other matters that are to be presented for action at the Annual Meeting. Should any other matter arise at the Annual Meeting; however, the persons named in the enclosed proxy will have discretionary authority to vote all proxies with respect to such matters in accordance with their judgment. BY ORDER OF THE BOARD OF DIRECTORS,  
Salvatore Rappa Managing Director, Corporate Counsel and Corporate Secretary March 16, 201819, 2020 Important Notice RegardingExhibit A
The following represent key performance measures that management uses in making resource allocation and/or compensation decisions. These measures should not be considered substitutes for, or superior to, financial measures prepared in accordance with GAAP. Management believes the Availabilityfollowingnon-GAAP measures, when presented together with comparable GAAP measures, are useful to investors in understanding the company’s operating results: Adjusted Pretax Income, Adjusted Net Income, and Adjusted Net Income,If-Converted, in total and on aper-share basis and Adjusted Earnings Per Share. Thesenon-GAAP measures, presented and discussed in this Proxy Statement, remove the significant accounting impact of: (a) transaction-related compensation expense, including expense related to Partnership Units with both time-based vesting and market conditions as well as equity-based and cash awards granted in connection with thespin-off from The Blackstone Group Inc. (“Blackstone”) and the acquisition of Proxy MaterialsCamberView Partners Holdings, LLC (“CamberView”); (b) intangible asset amortization associated with Blackstone’s initial public offering (“IPO”), the acquisition of PJT Capital LP, and the acquisition of CamberView; (c) impairment of CamberView’s former leased space; and (d) the amount the company has agreed to pay Blackstone related to the net realized cash benefit from certain compensation-related tax deductions. Reconciliations of thenon-GAAP measures to their most directly comparable GAAP measures and further detail regarding the adjustments are provided below. To help investors understand the effect of the company’s ownership structure on its Adjusted Net Income, the company has presented Adjusted Net Income,If-Converted. This measure illustrates the impact of taxes on Adjusted Pretax Income, assuming all Partnership Units (excluding the unvested partnership units that have yet to satisfy certain market conditions) were exchanged for shares of the company’s Class A common stock, resulting in all of the company’s income becoming subject to corporate-level tax, considering both current and deferred income tax effects. The following table provides a reconciliation of non-GAAP measures to their most directly comparable GAAP measures. (Dollars in Thousands, Except Share and Per Share Data) | | | | | | | | | | | | Year Ended
December 31, | | | | | 2019 | | | 2018 | | GAAP Net Income | | $ | 63,787 | | | $ | 42,558 | | Less: GAAP Provision (Benefit) for Taxes | | | 18,403 | | | | (1,045 | ) | GAAP Pretax Income | | | 82,190 | | | | 41,513 | | Adjustments to GAAP Pretax Income | | | | | | | | | Transaction-Related Compensation Expense(1) | | | 41,886 | | | | 52,566 | | Amortization of Intangible Assets(2) | | | 7,654 | | | | 3,735 | | Spin-Off-Related Payable Due to Blackstone(3) | | | 539 | | | | 1,145 | | Acquisition-Related Lease Impairment(4) | | | — | | | | 266 | | Adjusted Pretax Income | | | 132,269 | | | | 99,225 | | Adjusted Taxes(5) | | | 22,030 | | | | 16,513 | | Adjusted Net Income | | | 110,239 | | | | 82,712 | |
| | | | | | | | | | | | Year Ended
December 31, | | | | | 2019 | | | 2018 | | If-Converted Adjustments | | | | | | | | | Less: Adjusted Taxes(5) | | | (22,030 | ) | | | (16,513 | ) | Add:If-Converted Taxes(6) | | | 33,723 | | | | 22,718 | | Adjusted Net Income,If-Converted | | $ | 98,546 | | | $ | 76,507 | | GAAP Net Income Per Share of Class A Common Stock | | | | | | | | | Basic | | $ | 1.23 | | | $ | 1.23 | | Diluted | | $ | 1.21 | | | $ | 1.16 | | GAAP Weighted-Average Shares of Class A Common Stock Outstanding | | | | | | | | | Basic | | | 24,007,138 | | | | 21,879,574 | | Diluted | | | 25,014,569 | | | | 24,254,061 | | Adjusted Net Income,If-Converted Per Share | | $ | 2.41 | | | $ | 1.91 | | Weighted-Average Shares Outstanding,If-Converted | | | 40,967,316 | | | | 40,067,556 | |
The following table provides a summary of weighted-average shares outstanding for the Annual Meeting: three months and year ended December 31, 2019 and 2018 for both basic and diluted shares. The Noticetable also provides a reconciliation toIf-Converted Shares Outstanding assuming that all Partnership Units and unvested PJT Partners Inc. restricted stock units (“RSUs”) were converted to shares of Annual Meeting, Proxy Statement and Annual Report are available at www.proxyvote.com.the Company’s Class A common stock: | | | | | | | | | | | | Year Ended
December 31, | | | | | 2019 | | | 2018 | | Weighted-Average Shares Outstanding - GAAP | | | | | | | | | Shares of Class A Common Stock Outstanding | | | 23,117,559 | | | | 20,772,112 | | Vested, Undelivered RSUs | | | 889,579 | | | | 1,107,462 | | Basic Shares Outstanding, GAAP | | | 24,007,138 | | | | 21,879,574 | | Dilutive Impact of Unvested Common RSUs(7) | | | 1,007,431 | | | | 2,374,487 | | Dilutive Impact of Partnership Units(8) | | | — | | | | — | | Diluted Shares Outstanding, GAAP | | | 25,014,569 | | | | 24,254,061 | | Weighted-Average Shares Outstanding -If-Converted | | | | | | | | | Shares of Class A Common Stock Outstanding | | | 23,117,559 | | | | 20,772,112 | | Vested, Undelivered RSUs | | | 889,579 | | | | 1,107,462 | | Conversion of Unvested Common RSUs(7) | | | 1,007,431 | | | | 2,374,487 | | Conversion of Participating RSUs | | | 40,544 | | | | 139,519 | | Conversion of Partnership Units | | | 15,912,203 | | | | 15,673,976 | | If-Converted Shares Outstanding | | | 40,967,316 | | | | 40,067,556 | |
E40090-P02575
| (1) | This adjustment adds back to GAAP Pretax Income transaction-related compensation expense for Partnership Units with both time-based vesting and market conditions as well as equity-based and cash awards granted in connection with thespin-off from Blackstone and the acquisition of CamberView Partners Holdings, LLC (“CamberView”). |
| | | | | | (2) | This adjustment adds back to GAAP Pretax Income amounts for the amortization of intangible assets that are associated with Blackstone’s IPO, the acquisition of PJT PARTNERS INC. Annual MeetingCapital LP on October 1, 2015 and the acquisition of Stockholders
MayCamberView on October 1, 2018 8:30 A.M. Local Time2018.
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| (3) | This proxyadjustment adds back to GAAP Pretax Income the amount the company has agreed to pay Blackstone related to the net realized cash benefit from certain compensation-related tax deductions. Such expense is solicited byreflected in Other Expenses in the BoardCondensed Consolidated Statements of DirectorsOperations. |
| (4) | This adjustment adds back to GAAP Pretax income the impairment on CamberView’s former leased space. |
| (5) | Represents taxes on Adjusted Pretax Income, considering both current and deferred income tax effects for the current ownership structure. |
| (6) | Represents taxes on Adjusted Pretax Income, assuming all Partnership Units (excluding the unvested partnership units that have yet to satisfy market conditions) were exchanged for shares of the Company The stockholder(s) hereby appoint(s) James W. Cuminale and Salvatore Rappa, and each of them, as proxies, each with the full power of substitution, and hereby authorize(s) them to represent and to vote, as designated on the reverse side of this ballot,company’s Class A common stock, resulting in all of the shares of Class A Common Stockcompany’s income becoming subject to corporate-level tax, considering both current and Class B Common Stock of PJT PARTNERS INC. that the stockholder(s)is/are entitled to vote at the 2018 Annual Meeting of Stockholders to be held at 8:30 a.m. local time on May 1, 2018, at the company’s corporate headquarters located at 280 Park Ave., New York, NY 10017, and in their discretion, upon any matter that may properly come before the meeting or any adjournment of the meeting.deferred income tax effects.
This proxy, when properly executed, will be voted in accordance with instructions given on the reverse side. If no instructions are given, this proxy will be voted as recommended by the Board of Directors on the reverse side of this Proxy Card.
The stockholder(s) acknowledge(s) receipt with this proxy of a copy of the Notice of Annual Meeting, Proxy Statement and Annual Report describing more fully the matters set forth herein.
Continued and to be signed on reverse side
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| (7) | Represents the dilutive impact under the treasury method of unvested,non-participating restricted stock units that have a remaining service requirement. |
| (8) | Represents the number of shares assuming the conversion of vested Partnership Units as well as the dilutive impact of unvested Partnership Units with a remaining service requirement. |
| | | PJT PARTNERS INC. ATTN: SALVATORE RAPPA 280 PARK AVENUE, 16TH FLOOR NEW YORK, NY 10017 | | VOTE BY INTERNET Before The Meeting- Go towww.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Local timeEastern Time on April 30, 2018.29, 2020. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. During The Meeting - Go to www.virtualshareholdermeeting.com/PJT2020 You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions. VOTE BY PHONE -1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:until11:59 P.M. Local timeEastern Time on April 30, 2018.29, 2020. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. |
| | | | TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: | | | E40089-P02575D01547-P31957 | | KEEP THIS PORTION FOR YOUR RECORDS |
| | | | | DETACH AND RETURN THIS PORTION ONLY | | THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | PJT PARTNERS INC. | | | | | | | | | | | | | | | | | | | | | | | | | | | The Board of Directors recommends you vote “FOR” the election of each of its Nominees: | | | | | | | | | | | | | | | | | | | | | | | | | 1. Election of Directors | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Nominees: | | | | For | | | | Withhold | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1a. Kenneth C. WhitneyDennis S. Hersch | | | | ☐ | | | | ☐ | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1b. James CostosThomas M. Ryan | | | | ☐ | | | | ☐ | | | | | | | | | | | | | | | | | | | | | | | | | | | | The Board of Directors recommends you vote “FOR” the following proposal: | | For | | Against | | Abstain | | | | The Board of Directors recommends you vote “FOR” the following proposal:proposals: | | For | | | Against | | | Abstain | | | | | | | | | | | | | | 2. To approve, on an advisory basis, the compensation of our Named Executive Officers. | | ☐ | | ☐ | | ☐ | | | ☐ | | | | | | | | 4.3. To ratify the selection of Deloitte & Touche LLP as our independent registered public accounting firm for 2018.2020.
| | ☐ | | | ☐ | | | ☐ | | | | | | | | | | | | | | The Board of Directors recommends you vote 1 YEAR on the following proposal:
3. To approve, on an advisory basis, the frequency of advisory votes to approve the compensation of our Named Executive Officers.
| | 1 Year
☐
| | 2 Years
☐
| | 3 Years
☐
| | Abstain
☐
| | | | NOTE:In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting or any adjournment or postponement thereof. This proxy is solicited on behalf of the Board of Directors of PJT Partners Inc. This proxy, when properly executed, will be voted in accordance with the instructions given above. If no instructions are given, this proxy will be voted as recommended by the Board of Directors. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Signature [PLEASE SIGN WITHIN BOX] | | Date | | | | | | | | Signature (Joint Owners) | | Date | | | | | | | | |
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice of Annual Meeting, Proxy Statement and Annual Report are available at www.proxyvote.com. D01548-P31957 | | | | | | | | | PJT PARTNERS INC. Annual Meeting of Stockholders April 30, 2020 8:30 A.M. Eastern Time This proxy is solicited by the Board of Directors of the Company The stockholder(s) hereby appoint(s) James W. Cuminale and Salvatore Rappa, and each of them, as proxies, each with the full power of substitution, and hereby authorize(s) them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of Class A Common Stock and Class B Common Stock of PJT PARTNERS INC. that the stockholder(s)is/are entitled to vote at the 2020 Annual Meeting of Stockholders to be held at 8:30 A.M. Eastern Time on April 30, 2020, virtually at www.virtualshareholdermeeting.com/PJT2020, and in their discretion, upon any matter that may properly come before the meeting or any adjournment or postponement of the meeting. This proxy, when properly executed, will be voted in accordance with instructions given on the reverse side. If no instructions are given, this proxy will be voted as recommended by the Board of Directors on the reverse side of this Proxy Card. The stockholder(s) acknowledge(s) receipt with this proxy of a copy of the Notice of Annual Meeting, Proxy Statement and Annual Report describing more fully the matters set forth herein. Continued and to be signed on reverse side | | |
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