ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or Other Jurisdiction of Incorporation or Organization) |
(I.R.S. Employer Identification No.) | |
(Address of Principal Executive Offices) |
(Zip Code) |
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
☒ | Accelerated Filer | ☐ | ||||
Non-accelerated Filer | ☐ | Smaller Reporting Company | ||||
Emerging growth company |
Page |
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EXPLANATORY NOTE | 3 | |||||
4 | ||||||
ITEM 10. | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE | 4 | ||||
ITEM 11. | EXECUTIVE COMPENSATION | 13 | ||||
ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS | 57 | ||||
ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE | 62 | ||||
ITEM 14. | PRINCIPAL ACCOUNTANT FEES AND SERVICES | 109 | ||||
PART IV—OTHER INFORMATION | 109 | |||||
ITEM 15. | EXHIBITS AND FINANCIAL STATEMENT SCHEDULES | 109 |
ITEM 10. |
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE |
Name |
Age |
Director Since |
Biographies | |||
Howard W. Lutnick |
59 |
1999 |
Mr. Lutnick is the Chairman of our Board of Directors and our Chief Executive Officer, positions in which he has served from June 1999 to the present. Mr. Lutnick joined Cantor Fitzgerald, L.P. (“Cantor”) in 1983 and has served as President and Chief Executive Officer of Cantor since 1992 and as Chairman since 1996. Mr. Lutnick also served as President of Cantor from 1991 until 2017. Mr. Lutnick has been Chairman of Newmark Group, Inc. (“Newmark”) since 2016. In addition, Mr. Lutnick also holds offices at and provides services to various other affiliates of Cantor and provides services to our and Newmark’s operating partnerships and subsidiaries, including BGC Partners, L.P. (“BGC U.S. OpCo”), BGC Global Holdings, L.P. (“BGC Global OpCo”), and Newmark Partners, L.P. (“Newmark OpCo”). In addition, Mr. Lutnick’s company, CF Group Management, Inc. (“CFGM”), is the managing general partner of Cantor. Mr. Lutnick is a member of the Board of Directors of the Fisher Center for Alzheimer’s Research Foundation at Rockefeller University, the Board of Directors of the Horace Mann School, the Board of Directors of the National September 11 Memorial & Museum, the Board of Directors of the Partnership for New York City and the Board of Overseers of The Hoover Institution. Mr. Lutnick also served as the Chairman and Chief Executive Officer of CF Finance Acquisition Corp, from October 2015 until consummation of its business combination with GCM Grosvenor in November 2020 and as the Chairman and Chief Executive Officer of CF Finance Acquisition Corp. II from September 2019 until consummation of its business combination with View, Inc. in March 2021. Currently, Mr. Lutnick has served as Chairman and Chief Executive Officer of CF Finance Acquisition Corp. III since March 2016, CF Acquisition Corp. IV since January 2020, CF Acquisition Corp. V since April 2020, CF Acquisition Corp. VI since April 2020, CF Acquisition Corp VI since July 2020 and CF Acquisition Corp. VIII since July 2020, all of which are special purpose acquisition companies or “SPACS.” Additionally, Mr. Lutnick has served as Chairman and Chief Executive Officer of each of Cantor Fitzgerald Income Trust, Inc. (formerly known as Rodin Global Property Trust, Inc.) and Rodin Income Trust, Inc. since February 2017 and as President of Rodin Income Trust, Inc. since January 2018, which are non-traded real estate investment trusts, or REITs. Mr. Lutnick received an undergraduate degree from Haverford College. |
Stephen T. Curwood |
73 |
2009 |
Mr. Curwood has been a director of our Company since December 2009. Mr. Curwood has been President of the World Media Foundation, Inc., a non-profit media production company, since 1992 and Senior Managing Director of SENCAP LLC, a New York and New Hampshire-based investment group, since 2005. Mr. Curwood was a Principal in Mamawood (Pty) Ltd, a media holding company based in Johannesburg with investments in South Africa, from 2005 to 2017. He has been a member of the Haverford College Corporation since 2000 and a trustee of the Woods Hole Research Center since 1996. From 1996 to present, Mr. Curwood has been faculty associate of the Harvard University Center for the Environment and has lectured in Environmental Science and Public Policy. From 2017 to present, he has been a Professor of Practice for the University of Massachusetts at Boston School for the Environment. Mr. Curwood was a trustee of Pax World Funds, a $2.5 billion group of investment funds focused on sustainable and socially responsible investments based in Portsmouth, New Hampshire, from 2007 until 2009. Mr. Curwood is also currently a member of the Board of Trustees of the New England Aquarium. Mr. Curwood received an. A.B. from Harvard College. | |||
William J. Moran |
79 |
2013 |
Mr. Moran has been a director of our Company since June 2013. Mr. Moran retired from JPMorgan Chase & Co. in June 2005, after serving as its Executive Vice President since 1997 and General Auditor since 1992. Mr. Moran previously worked in public accounting for nine years at KPMG LLP, providing financial audit, tax and advisory professional services. He served as a director of eSpeed, Inc., the Company’s predecessor, from December 1999 to November 2005. Mr. Moran served as a member of the Board of Directors and as the Chairman of the Audit Committee of GFI from February 26, 2015 through the closing of our back-end merger with GFI in January 2016. Mr. Moran also served as a director of Sovereign Bancorp, Inc. from 2006 until it was acquired by Banco Santander, S.A. in 2009. He also serves on the Advisory Board of the School of Management of Marist College and previously served on the Board of Directors of The College of Technology. He also previously served as a director of Lighthouse International. He is a member of the American Institute of Certified Public Accountants and the New York Society of Certified Public Accountants, and was a member of the Bank Administration Institute and the Institute of Internal Auditors. Mr. Moran graduated with a B.A., cum laude, from Marist College and a M.B.A. from Columbia University. Mr. Moran also is a Certified Public Accountant. | |||
Linda A. Bell |
62 |
2013 |
Dr. Bell has been a director of our Company since July 2013. Dr. Bell has served as the Provost and Dean of the Faculty at Barnard College, Columbia University since 2012, where she is also a Professor of Economics. Prior to joining Barnard, Dr. Bell was the Provost and John B. Hurford Professor of Economics at Haverford College from 2007 and 2012 and a member of the faculty since 1992. |
Prior to her tenure at Haverford, Dr. Bell held visiting faculty appointments at Stanford University, the University of California, San Diego, the John F. Kennedy School of Government at Harvard University, and the Woodrow Wilson School of Public Administration at Princeton University, and has taught at the Leonard N. Stern School of Business at New York University. Dr. Bell has also served as a research fellow at the Institute for the Study of Labor (IZA) in Bonn, Germany since 2003, and as a senior consultant for the labor practice group of the National Economic Research Associates since 2006. Dr. Bell holds a Ph.D. in Economics from Harvard University. | ||||||
David P. Richards | 68 | 2017 | Mr. Richards has been a director of our Company since December 2017. Mr. Richards is the Chairman of Prodrive Holdings Ltd., a British motorsport and advanced engineering group, a position in which he has served since the firm’s founding in 1984. He previously served as Chairman of Aston Martin Lagonda Ltd., a British manufacturer of luxury sports cars, from 2007 until 2013, and as a non-executive director of BGC European GP Limited from May 2009 until June 2017. Mr. Richards currently serves in the role of Chairman of the UK governing body of the Motor Sports Association. Mr. Richards has been a director of Phytome Life Sciences, a U.K. plant-based medical research company since August 2019. In the 2005 Queen’s New Year’s Honours, Mr. Richards was made a Commander of the British Empire, CBE, for his services to motorsport. Mr Richards attended Brynhyfryd School in North Wales followed by five years of articles with a Liverpool firm of chartered accountants. He holds honorary doctorates and fellowships from the Universities of Wales, Coventry, Warwick and Cranfield. |
ITEM 11. |
EXECUTIVE COMPENSATION |
• | pre-tax or after-tax net income; |
• | pre-tax or after-tax operating income; |
• | gross revenue; |
• | profit margin; |
• | stock price, dividends and/or total stockholder return; |
• | cash flow(s); |
• | market share; |
• | pre-tax or after-tax earnings per share; |
• | pre-tax or after-tax operating earnings per share; |
• | expenses; |
• | return on equity; or |
• | strategic business criteria, consisting of one or more objectives based upon meeting specific revenue, market penetration, or geographic business expansion goals, cost targets and goals relating to acquisitions or dispositions. |
• | Mr. Lutnick’s 2020 award consisted of an aggregate BGC bonus of $11,000,000 paid $2,000,000 in current cash compensation and $9,000,000 in a long-term partnership award represented by 1,087,361 non-exchangeable BGC Holdings PSUs and 585,502 non-exchangeable BGC Holdings PPSUs. This long-term unit award aligns Mr. Lutnick’s compensation with the Company’s earnings and, over time, in the event such units become exchangeable, its stock performance with respect to the PSUs. The bonus for Mr. Lutnick represented a $250,000, or approximately 2.3%, increase from the prior year. The Committee focused on Mr. Lutnick’s efforts during the pandemic and the Company’s overall financial performance and the results of various businesses. |
• | Mr. Lynn’s 2020 award consisted of a long-term $2,500,000 partnership award, a reduction of approximately 16.7% as compared to the prior year. Mr. Lynn’s bonus was based on the contractual terms following his stepping down as President in October 2020. Mr. Lynn’s $2,500,000 2020 Incentive Plan award was represented by 86,199 non-exchangeable BGC Holdings NLPUs and 76,441 non-exchangeable BGC Holdings NPLPUs, as well as 196,329 non-exchangeable BGC Holdings LPU-NEWs and 105,716 BGC Holdings PLPU-NEWs, which shall have certain exchange rights beginning April 1, 2023 upon certain conditions set forth below. |
• | Mr. Merkel’s BGC bonus of $750,000 for 2020 was paid $312,500 in current cash compensation and $437,500 in a long-term partnership award represented by 40,660 non-exchangeable BGC Holdings NPSUs and 40,660 non-exchangeable BGC Holdings NPPSUs. The BGC standalone bonus for 2020 awarded to Mr. Merkel equaled his prior year’s allocated bonus. In awarding Mr. Merkel a 2020 bonus under the Incentive Plan, the Committee considered his role in managing legal issues during the pandemic and overall leadership of the Company’s complex business, legal and regulatory matters in 2020. |
• | Mr. Windeatt’s 2020 bonus of £1,300,000 ($1,781,000 as of April 8, 2021) was paid £75,000 in current cash compensation and £933,000 in a long-term partnership award represented by 21,324 non-exchangeable BGC Holdings NLPUs and 18,910 non-exchangeable BGC Holdings NPLPUs as well as 128,279 non-exchangeable BGC Holdings New LPU-NEWs and 69,073 BGC Holdings PLPU-NEWs, which shall have certain exchange rights beginning April 1, 2023 upon certain conditions set forth below. These exchange rights, accordingly, tie Mr. Windeatt’s compensation directly to stock performance over time and serve as a retention feature over the same period. Mr. Windeatt’s 2020 bonus represented a £83,333, or approximate 6.8 %, increase from the prior year. The foregoing also included 20% of a previously issued grant award to Mr. Windeatt in connection with his contract extension on November 5, 2020 represented by 91,685 non-exchangeable BGC Holdings LPUs and 49,369 non-exchangeable BGC Holdings PLPUs at $2.84 per unit. In determining the specific 2020 Incentive Plan bonus for Mr. Windeatt, the Committee considered his increased responsibilities and duties and the Company’s financial performance. |
• | Mr. Bisgay’s aggregate 2020 award of $1,250,000 was paid $1,025,000 in current cash compensation and $225,000 in a long-term partnership award represented by 20,911 non-exchangeable BGC Holdings NPSUs and 20,911 non-exchangeable BGC Holdings NPPSUs. In determining the specific 2020 Incentive Plan bonus for Mr. Bisgay, the Committee noted his overall efforts on behalf of the Company with respect to financial reporting and related projects and the Company’s financial performance. |
THE COMPENSATION COMMITTEE | ||
Stephen T. Curwood, Chair | ||
Linda A. Bell | ||
William J. Moran | ||
David P. Richards |
(a) Name and Principal Position |
(b) Year |
(c) Salary($) |
(d) Bonus ($) |
(e) Equity Awards (Related to Prior Periods) ($)(2) |
(f) Option Awards ($) |
(g) Non- Equity Incentive Plan Compensation ($)(3) |
(h) Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) |
(i) All Other Compensation ($) |
(j) Total ($) |
|||||||||||||||||||||||||||
Howard W. Lutnick, |
2020(1) | 1,000,000 | — | — | — | 11,000,000 | — | — | 12,000,000 | |||||||||||||||||||||||||||
Chairman of the Board of |
2019(1) | 1,000,000 | — | — | — | 10,750,000 | — | — | 11,750,000 | |||||||||||||||||||||||||||
Directors and Chief |
2018 BGC(1) | 1,000,000 | — | 5,000,000 | — | 11,750,000 | — | — | 17,750,000 | |||||||||||||||||||||||||||
Executive Officer of |
2018 Newmark(1) | 916,700 | — | 6,902,302 | — | 4,125,150 | — | — | 11,944,152 | |||||||||||||||||||||||||||
|
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|
|
|
|
|
|
|
|
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BGC and Chairman of Newmark |
2018 Total(1) | 1,916,700 | — | 11,902,302 | — | 15,875,150 | — | — | 29,694,152(1) | |||||||||||||||||||||||||||
Stephen M. Merkel, |
2020(1) | 1,000,000 | — | 530,400 | — | 750,000 | — | — | 2,280,400 | |||||||||||||||||||||||||||
Executive Vice President |
2019(1) | 1,000,000 | — | 1,096,054 | — | 750,000 | — | — | 2,846,054 | |||||||||||||||||||||||||||
and General Counsel |
2018(1) | 1,000,000 | — | 2,428,920 | — | 1,750,000 | — | — | 5,178,920 | |||||||||||||||||||||||||||
Sean A. Windeatt, |
2020(1) | 685,000 | — | 378,319 | — | 1,781,000 | — | — | 2,844,319 | |||||||||||||||||||||||||||
Chief Operating Officer(4) |
2019(1) | 616,056 | — | — | — | 1,550,764 | — | — | 2,166,820 | |||||||||||||||||||||||||||
2018(1) | 522,280 | — | — | — | 1,762,695 | — | — | 2,284,975 | ||||||||||||||||||||||||||||
Steven Bisgay, |
2020(1) | 750,000 | — | — | — | 1,250,000 | — | — | 2,000,000 | |||||||||||||||||||||||||||
Chief Financial Officer |
||||||||||||||||||||||||||||||||||||
Shaun D. Lynn, |
2020(1) | 1,000,000 | — | 764,237 | — | 2,500,000 | — | — | 4,264,237 | |||||||||||||||||||||||||||
Former President |
2019(1) | 1,000,000 | — | — | — | 3,000,000 | — | — | 4,000,000 | |||||||||||||||||||||||||||
2018(1) | 1,000,000 | — | — | — | 7,500,000 | — | — | 8,500,000 |
(1) | For 2020 and 2019, this table only reflects BGC compensation. The awards represented in column (g) for 2020 were made on April 8, 2021 and reflected a stock price of $5.38 per share. The awards represented in column (g) for 2019 were made on March 2, 2020 and reflected a stock price of $4.84 per share. The table includes all compensation paid on behalf of the Company as well as Newmark, where applicable for 2018. Compensation for Mr. Lutnick for 2018 includes separate lines for his BGC stand alone compensation and 11/12ths of his Newmark stand alone compensation, representing the portion paid during the period in which Newmark was a subsidiary of BGC. BGC completed the Spin-Off of Newmark on November 30, 2018. The two items are totaled for 2018 for Mr. Lutnick in accordance with SEC rules. |
(2) | 2018 amounts under column (e) for Mr. Lutnick represent the right to monetize certain units granted to Mr. Lutnick in 2014, 2015 and 2016. The $5,000,000 amount in column (e) for Mr. Lutnick for 2018 BGC represents the aggregate fair value of (i) the right to exchange 376,651 non-exchangeable BGC Holdings PSUs held by Mr. Lutnick into 376,651 non-exchangeable BGC Holdings partnership units with a capital account (HDUs) (which, based on the closing price of our Class A common stock of $6.21 per share on February 1, 2019, had a value of $2,339,000); and (ii) the right to exchange for cash 463,969 non-exchangeable BGC Holdings PPSUs held by Mr. Lutnick, for a payment of $2,661,000 for taxes when such PSUs are exchanged for HDUs. These PSUs and PPSUs were granted to Mr. Lutnick in exchange for certain long-term incentive awards in the form of NPSUs granted to Mr. Lutnick in 2014, 2015 and 2016. To date, Mr. Lutnick has not exercised this right to exchange and has not sold any shares in connection with these rights. PPSUs are not included in our fully-diluted share count. |
(3) | The amounts in column (g) reflect the bonus awards to the named executive officers under our Incentive Plan. |
(4) | For 2020, Mr. Windeatt’s base salary was £500,000, and the $685,000 base salary reflected in the table was calculated using an exchange rate of 1.37, the exchange rate in effect as of April 8, 2021.For 2019, Mr. Windeatt’s base salary was £500,000, effective March 1, 2019. For January and February 2019, Mr. Windeatt’s salary was based on his 2018 annual rate of £400,000. Mr. Windeatt therefore received approximately £483,333 in salary for 2019. The $616,056 salary reflected in the table was calculated using an exchange rate of 1.2746, the exchange rate in effect as of March 2, 2020. For 2018, Mr. Windeatt’s base salary was £400,000, and the $522,280 base salary reflected in the table was calculated using an exchange rate of 1.3057, the exchange rate in effect as of February 22, 2019. |
(a) |
(b) |
(c) |
(d) |
(e) |
(f) |
(g) |
(h) |
(i) |
(j) |
(k) |
(l) |
|||||||||||||||||||||||||||||||
Estimated Possible Payouts Under Non-Equity Incentive Plan Awards |
Estimated Future Payouts Under Equity Incentive Plan Awards |
All Other Grant Awards: Number of Shares of Stock or |
All Other Option Awards: Number of Securities |
Exercise or Base Price of Option |
Grant Date Fair Value of Stock and Option |
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Grant |
Threshold |
Target |
Maximum |
Threshold Target Maximum |
Units |
Underlying |
Awards |
Awards |
||||||||||||||||||||||||||||||||||
Name |
Date |
($) |
($) |
($)(1) |
(#) |
(#) |
(#) |
(#)(2) |
Options (#) |
($/Sh) |
($)(2) |
|||||||||||||||||||||||||||||||
Howard W. Lutnick |
1/1/20 | — | — | 25,000,000 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||
Shaun D. Lynn |
1/1/20 | — | — | 25,000,000 | — | — | — | 162,450 | — | — | 764,237 | |||||||||||||||||||||||||||||||
Stephen M. Merkel |
1/1/20 | — | — | 25,000,000 | — | — | — | 110,000 | — | — | 530,400 | |||||||||||||||||||||||||||||||
Sean A. Windeatt |
1/1/20 | — | — | 25,000,000 | — | — | — | 83,110 | — | — | 378,319 | |||||||||||||||||||||||||||||||
Steven Bisgay |
1/1/20 | — | — | 25,000,000 | — | — | — | — | — | — | — |
(1) | The amounts in column (e) reflect the maximum possible individual payment under our Incentive Plan. During 2020, there were no specific minimum and target levels under the Incentive Plan. The $25,000,000 maximum amount was the maximum annual amount available for payment to any one executive officer under the Incentive Plan for 2020, and our Compensation Committee retained negative discretion to award less than this amount. Actual amounts paid to each named executive officer for 2020 are set forth in column (g) of the Summary Compensation Table. |
(2) | The amounts in columns (i) and (l) reflect aggregate grants under the Incentive Plan for Messrs. Lynn, Windeatt and Merkel for 2020. For Mr. Lynn, the fair value of $764,237 represents the aggregate fair value of: (i) the redemption of 63,175 BGC Holdings PPSUs at the determination price of $5.00 per PPSU and redemption of 162,450 BGC Holdings PSUs for zero; and (ii) the issuance of 162,450 shares of BGC Class A common stock at $2.76 per share. For Mr. Windeatt, the fair value of $378,319 represents the aggregate fair value of: (i) the redemption of 15,238 BGC Holdings PPSUs at the determination price of $6.1184 per PPSU and the redemption of 76,973 BGC Holdings PSUs for zero; and (ii) the issuance of 76,973 shares of BGC Class A common stock at $2.90 per share, plus 6,137 Newmark LPUs made exchangeable by the Committee on August 5, 2020, and exchanged for 5,748 Newmark shares at $4.16 per share on August 6, 2020 based on the exchange ratio of 0.9366 and 2,387 Newmark PLPUs with a determination price of $15.90 which were made exchangeable by the Committee on August 5, 2020. For Mr. Merkel, the fair value of $530,400 represents the aggregate fair value of: (i) the redemption of 90,000 BGC Holdings PPSUs at the determination price of $2.52 per PPSU and the redemption of 110,000 BGC Holdings PSUs for zero; and (ii) the issuance of 110,000 shares of BGC Class A common stock at $2.76 per share. |
Option Awards |
Grant Awards |
|||||||||||||||||||||||||||||||||||
(b) Number of Securities Underlying Unexercised Options/ Exchangeable Units Exercisable/ |
(c) Number of Securities Underlying Unexercised Options/ Exchangeable Units Unexercisable/ |
(d) Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned |
(e) Option Exercise |
(f) Option |
(g) Number of Shares or Units of Stock That Have Not |
(h) Market Value of Shares or Units of Stock That |
(i) Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not |
(j) Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not |
||||||||||||||||||||||||||||
(a) |
Exchangeable |
Unexchangeable |
Options |
Price |
Expiration |
Vested |
Have Not |
Vested |
Vested |
|||||||||||||||||||||||||||
Name |
(#)(1)(2) |
(#)(3) |
(#) |
($)(1) |
Date |
(#) |
Vested |
(#) |
($) |
|||||||||||||||||||||||||||
Howard W. Lutnick |
2,549,185 | 0 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Shaun D. Lynn |
0 | 0 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Stephen M. Merkel |
0 | 0 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Sean A. Windeatt |
62,211 | 0 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Steven Bisgay |
0 | 0 | — | — | — | — | — | — | — |
(1) | Column (b) represents 1,040,760 exchangeable BGC Holdings PSUs held by Mr. Lutnick as of December 31, 2020. These exchangeable BGC Holdings units may be exchanged at any time on a 1:1 basis for shares of BGC’s Class A common stock. As of December 31, 2020, the closing market price of a share of our Class A common stock was $4.00. Column (b) also includes the right of Mr. Lutnick (i) from BGC to exchange 1,508,425 non-exchangeable BGC Holdings PSUs into 376,651 non-exchangeable BGC Holdings HDU partnership units (which, based on the closing price of our Class A common stock of $6.21 per share on grant date, had a value of $2,339,000) but excluding the related right to exchange for cash 463,969 non-exchangeable BGC Holdings PPSUs, for a payment of $2,661,000 for taxes when such PSUs are exchanged into HDUs; and (ii) from Newmark to exchange 1,131,774 non-exchangeable BGC Holdings PSUs into 1,131,774 non-exchangeable BGC Holdings HDU partnership units (which, based on the closing price of the BGC Class A common stock of $6.20 per share on the grant date, had a value of $7,017,000 but excluding the related right to exchange for cash 1,018,390 BGC Holdings non-exchangeable PPSUs (which had an average determination price of $7.8388 per unit), for a payment of $7,983,000 for taxes when such PSUs are exchanged into HDUs. |
(2) | Column (b) does not include 851,531 exchangeable BGC Holdings PPSUs and 1,482,359 non - exchangeable BGC Holdings PPSU-Hs. |
(3) | Column (c) does not include 1,354,393 non-exchangeable BGC Holdings PPSUs held by Mr. Lutnick, in addition to the PPSUs described in footnote 1 above, 1,536,750 non-exchangeable BGC Holdings PLPUs and 128,468 non-exchangeable BGC Holdings PLPU-NEWs held by Mr. Lynn, 250,659 non-exchangeable BGC Holdings PPSUs held by Mr. Merkel and 45,736 non- |
Name |
Base Salary ($) |
Bonus ($) |
Vesting of Equity Compensation ($)(1) |
Welfare Benefit Continuation ($) |
Tax Gross-Up Payment ($)(2) |
Total ($) |
||||||||||||||||||
Howard W. Lutnick |
||||||||||||||||||||||||
Termination of Employment |
2,000,000 | 22,000,000 | — | 96,548 | — | 24,096,548 | ||||||||||||||||||
Extension of Employment |
1,000,000 | 11,000,000 | — | 96,548 | — | 12,096,548 | ||||||||||||||||||
Shaun D. Lynn |
||||||||||||||||||||||||
Termination of Employment |
2,000,000 | 5,000,000 | — | 14,161 | — | 7,014,161 | ||||||||||||||||||
Extension of Employment |
1,000,000 | 2,500,000 | — | — | — | 3,500,000 | ||||||||||||||||||
Stephen M. Merkel |
||||||||||||||||||||||||
Termination of Employment |
2,000,000 | 1,500,000 | — | 105,028 | — | 3,605,028 | ||||||||||||||||||
Extension of Employment |
1,000,000 | 750,000 | — | 105,028 | — | 1,855,028 | ||||||||||||||||||
Sean A. Windeatt |
||||||||||||||||||||||||
Termination of Employment |
1,370,000 | (3) | 3,562,000 | (3) | — | 13,815 | — | 4,945,815 | ||||||||||||||||
Extension of Employment |
685,000 | (3) | 1,781,000 | (3) | — | — | — | 2,466,000 |
(1) | Upon a change in control at December 31, 2020, Messrs. Lutnick, Lynn, and Merkel would have had the right to receive (i) replacement of any partnership units ineligible for exchange rights with new partnership units eligible for such exchange rights, (ii) grants of immediately exchangeable exchange rights (into stock or cash, as applicable) with respect to any non-exchangeable limited partnership units (including those replacement units described in clause (i) (other than the Lynn 2016 NPSUs)); and (iii) the immediate lapse of any restrictions on transferability of any shares of restricted stock held by them at such time. With respect to the Lynn 2016 NPSUs, upon a change in control at December 31, 2020, Mr. Lynn would have the right to receive grants of exchange rights with respect to non-exchangeable BGC Holdings LPUs at the times and over the periods described below under “Employment Agreements and Deeds of Adherence—Shaun D. Lynn Agreements.” Upon a change in control at December 31, 2020, Mr. Windeatt would have the right to receive (ii) and (iii) above. With respect to the Windeatt 2017 NPSUs, upon a |
change in control at December 31, 2020, Mr. Windeatt would have the right to receive the replacement of the then remaining NPSUs with non-exchangeable BGC Holdings LPUs and grants of exchange rights at the times and over the periods described below under “Employment Agreements and Deeds of Adherence—Sean A. Windeatt Agreements.” |
(2) | Mr. Lutnick is also entitled to a tax gross-up for excess parachute payments, if any, that would be due in respect of the impact a change in control would have on certain of his outstanding partnership units as stated in footnote (1). The aggregate tax-gross up payment upon a termination of employment in connection with a change of control is $46,109,671 when calculated based upon the equity compensation in footnote (1), base salary, bonus, and welfare benefit continuation as of December 31, 2020. The aggregate tax-gross up payment upon an extension of employment in connection with a change of control is $37,703,003 when calculated based upon the equity compensation in footnote (1), base salary, bonus, and welfare benefit continuation as of December 31, 2020. |
(3) | For 2020, Mr. Windeatt received £500,000 in salary and his bonus was £1,300,000. The $685,000 salary and $1,781,000 bonus reflected in the table were calculated using an exchange rate of 1.37, the exchange rate in effect as of April 8, 2021. |
• | the annual total compensation of the median employee of all employees of the Company (other than the CEO) was $114,075; |
• | the annual total compensation of the CEO, as reported in the Summary Compensation Table, was $12,000,000; and |
• | the ratio of the annual total compensation of the CEO to the median employee of all employees of the Company was approximately 105 to 1. |
(a) Name (1) |
(b) Fees Earned or Paid in Cash ($) |
(c) Stock Awards ($)(2) |
(d) Option Awards ($)(3) |
(e) Non- Equity Incentive Plan Compensation ($) |
(f) Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) |
(g) All Other Compensation ($) |
(h) Total |
|||||||||||||||||||||
Stephen T. Curwood, |
||||||||||||||||||||||||||||
Director |
186,000 | 50,000 | — | — | — | — | 236,000 | |||||||||||||||||||||
William J. Moran, |
||||||||||||||||||||||||||||
Director |
201,000 | 50,000 | — | — | — | — | 251,000 | |||||||||||||||||||||
Linda A. Bell, |
||||||||||||||||||||||||||||
Director |
171,000 | 50,000 | — | — | — | — | 221,000 | |||||||||||||||||||||
David P. Richards, |
||||||||||||||||||||||||||||
Director |
162,000 | 50,000 | — | — | — | — | 212,000 |
(1) | Howard W. Lutnick, our Chairman of the Board and Chief Executive Officer, is not included in this table as he is an employee of our Company and thus received no compensation for his services as director. The compensation received by Mr. Lutnick as an employee of our Company is shown in the Summary Compensation Table. Table includes compensation paid with respect to 2020, including payments for 2020 that were made in January 2021. |
(2) | Reflects the grant date fair value of RSUs granted on June 11, 2020 to each of Messrs. Curwood, Moran and Richards and Dr. Bell. More information with respect to the calculation of these amounts is included in the footnotes to our consolidated financial statements included in Item 8 of our latest Annual Report on Form 10-K. In 2020, each of Messrs. Curwood, Moran and Richards and Dr. Bell was granted 17,422 RSUs. As of December 31, 2020, Messrs. Curwood, Moran and Richards and Dr. Bell each had 22,295 RSUs outstanding. |
(3) | No options were granted to non-employee directors in 2020. As of December 31, 2020, none of the non-employee directors had any options outstanding. |
Class B Common Stock |
Class A Common Stock |
|||||||||||||||
Name |
Shares |
% |
Shares |
% |
||||||||||||
5% Beneficial Owners(1): |
||||||||||||||||
Cantor Fitzgerald, L.P.(2) |
68,736,148 | (3) | 98.9 | (4) | 100,253,752 | (5) | 23.0 | (6) | ||||||||
CF Group Management, Inc. |
69,497,800 | (7) | 100.0 | (4) | 103,226,276 | (8) | 23.6 | (9) | ||||||||
The Vanguard Group |
— | — | 27,930,845 | 8.4 | ||||||||||||
BlackRock, Inc. |
— | — | 22,000,823 | 6.6 | ||||||||||||
Executive Officers and Directors(1): |
||||||||||||||||
Executive Officers |
||||||||||||||||
Howard W. Lutnick |
69,497,800 | (10) | 100.0 | (4) | 127,375,153 | (11) | 28.2 | (12) | ||||||||
Stephen M. Merkel |
— | — | 42,268 | (13) | * | |||||||||||
Steven Bisgay |
— | — | 1,503 | (14) | * | |||||||||||
Sean A. Windeatt |
— | — | — | * | ||||||||||||
Directors |
||||||||||||||||
Stephen T. Curwood |
— | — | 34,705 | (15) | * | |||||||||||
William J. Moran |
— | — | 68,719 | (16) | * | |||||||||||
Linda A. Bell |
— | — | 10,971 | (17) | * | |||||||||||
David P. Richards |
— | — | 15,929 | (18) | * | |||||||||||
All executive officers and directors as a group (8 persons) |
69,497,800 | 100.0 | 127,549,248 | 28.2 | (19) |
* | Less than 1% and percentages are based on 334,364,449 shares of our Class A common stock outstanding as of March 31, 2021. |
(1) | Based upon information supplied by directors, executive officers and 5% beneficial owners in filings under Sections 13(d) and 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). |
(2) | Cantor has pledged to a financial institution, pursuant to a Put and Pledge Agreement, dated as of July 21, 2017, 10,000,000 shares of our Class A common stock in connection with a loan program established for certain employees and partners of Cantor and its affiliates. On November 23, 2018, those Class A shares were converted into 10,000,000 shares of our Class B common stock and remain pledged in connection with the partner loan program. |
(3) | Consists of (i) 45,122,728 shares of our Class B common stock held directly and (ii) 23,613,420 shares of our Class B common stock acquirable upon exchange of 23,613,420 BGC Holdings exchangeable limited partnership interests. These exchangeable limited partnership interests held by Cantor are exchangeable with us at any time for shares of our Class B common stock (or, at Cantor’s option, or if there are no additional authorized but unissued shares of our Class B common stock, our Class A common stock) on a one-for-one basis (subject to customary anti-dilution adjustments). |
(4) | Percentage based on (i) 45,884,380 shares of our Class B common stock outstanding as of March 31, 2021, and (ii) 23,613,420 shares of our Class B common stock acquirable upon exchange of 23,613,420 BGC Holdings exchangeable limited partnership interests held by Cantor. |
(5) | Consists of (i) 45,122,728 shares of our Class A common stock acquirable upon conversion of 45,122,728 shares of our Class B common stock, and (ii) 55,131,024 shares of our Class A common stock acquirable upon exchange of 55,131,024 BGC Holdings exchangeable limited partnership interests. These amounts include an aggregate of 15,756,625 distribution rights shares consisting of (A) 13,999,105 April 2008 distribution rights shares and (B) 1,757,520 February 2012 distribution rights shares, which may generally be issued to certain Cantor partners upon request, or are scheduled to be distributed within 60 days of March 31, 2021. |
(6) | Percentage based on (i) 334,364,449 shares of our Class A common stock outstanding as of March 31, 2021, (ii) 45,884,380 shares of our Class A common stock acquirable upon conversion of 45,884,380 shares of our Class B common stock, and (iii) 55,131,024 shares of our Class A common stock acquirable upon exchange of 55,131,024 BGC Holdings exchangeable limited partnership interests. |
(7) | Consists of (i) 761,652 shares of our Class B common stock held by CFGM, (ii) 45,122,728 shares of our Class B common stock held by Cantor, and (iii) 23,613,420 shares of our Class B common stock acquirable upon exchange by Cantor of 23,613,420 BGC Holdings exchangeable limited partnership interests. CFGM is the managing general partner of Cantor. |
(8) | Consists of (i) 761,652 shares of our Class A common stock acquirable upon conversion of 761,652 shares of our Class B common stock held by CFGM, (ii) 2,050,197 April 2008 distribution rights shares held by CFGM, receipt of which has been deferred, (iii) 160,675 February 2012 distribution rights shares, receipt of which has been deferred, (iv) 45,122,728 shares of our Class A common stock acquirable upon conversion of 45,122,728 shares of our Class B common stock held by Cantor, and (v) 55,131,024 shares of our Class A common stock acquirable upon exchange of 55,131,024 BGC Holdings exchangeable limited partnership interests. These amounts include an aggregate of 15,756,625 distribution rights shares consisting of (A) 13,999,105 April 2008 distribution rights shares and (B) 1,757,520 February 2012 distribution rights shares, which may generally be issued to such partners upon request, or are scheduled to be distributed within 60 days of March 31, 2021. |
(9) | Percentage based on (i) 334,364,449 shares of our Class A common stock outstanding as of March 31, 2021, (ii) 45,884,380 shares of our Class A common stock acquirable upon conversion of 45,884,380 shares of our Class B common stock, (iii) 55,131,024 shares of our Class A common stock acquirable upon exchange of 55,131,024 BGC Holdings exchangeable limited partnership interests, (iv) 2,050,197 April 2008 distribution rights shares held by CFGM, receipt of which has been deferred, and (v) 160,675 February 2012 distribution rights shares held by CFGM, receipt of which has been deferred. |
(10) | Consists of (i) 761,652 shares of our Class B common stock held by CFGM, (ii) 45,122,728 shares of our Class B common stock held by Cantor, and (iii) 23,613,420 shares of our Class B common stock acquirable upon exchange by Cantor of 23,613,420 BGC Holdings exchangeable limited partnership interests. Mr. Lutnick is the Chairman and Chief Executive Officer of CFGM and also the trustee of an entity that is the sole shareholder of CFGM. CFGM is the managing general partner of Cantor. |
(11) | Mr. Lutnick’s holdings consist of: |
(i) | 5,033,338 shares of our Class A common stock held directly; |
(ii) | 590,940 of our Class A common stock held in Mr. Lutnick’s 401(k) account (as of March 31, 2021); |
(iii) | 3,741,303 shares of our Class A common stock held in various trust, retirement and custodial accounts consisting of (A) 1,095,925 shares held in Mr. Lutnick’s personal asset trust, of which he is the sole trustee, (B) 1,000,000 shares held in Mr. Lutnick’s GRAT I account, of which he is the sole trustee, (C) 768,133 shares held by a trust for the benefit of descendants of Mr. Lutnick and his immediate family (the “Trust”), of which Mr. Lutnick’s wife is one of two trustees and Mr. Lutnick has limited powers to remove and replace such trustees, (D) 283,392 shares held in a Keogh retirement account for Mr. Lutnick, (E) 539,154 shares held by trust accounts for the benefit of Mr. Lutnick and members of his immediate family, (F) 33,770 shares held in other retirement accounts, (G) 19,922 shares held in custodial accounts for the benefit of certain members of Mr. Lutnick’s family under the Uniform Gifts to Minors Act, and (H) 1.007 shares of Class A common stock held in other retirement accounts for the benefit of Mr. Lutnick’s spouse; |
(iv) | 761,652 shares of our Class A common stock acquirable upon conversion of 761,652 shares of our Class B common stock held by CFGM; |
(v) | 45,122,728 shares of our Class A common stock acquirable upon conversion of 45,122,728 shares of our Class B common stock held by Cantor; |
(vi) | 55,131,024 shares of our Class A common stock acquirable upon exchange of 55,131,024 BGC Holdings exchangeable limited partnership interests held by Cantor; |
(vii) | 7,742,325 April 2008 distribution rights shares acquirable by Mr. Lutnick, receipt of which has been deferred; |
(viii) | 1,231,396 February 2012 distribution rights shares acquirable by Mr. Lutnick, receipt of which has been deferred; |
(ix) | 2,050,197 April 2008 distribution rights shares acquirable by CFGM, receipt of which has been deferred; |
(x) | 160,675 February 2012 distribution rights shares acquirable by CFGM, receipt of which has been deferred; |
(xi) | 1,610,182 April 2008 distribution rights shares acquirable by the Trust, receipt of which has been deferred; |
(xii) | 2,048,000 April 2008 distribution rights shares acquirable by KBCR, by virtue of Mr. Lutnick being the managing member of KBCR, which is a non-managing General Partner of Cantor, receipt of which has been deferred; |
(xiii) | 287,967 February 2012 distribution rights shares acquirable by KBCR, receipt of which has been deferred; |
(xiv) | 161,842 April 2008 distribution rights shares acquirable by LFA, receipt of which has been deferred; |
(xv) | 16,193 February 2012 distribution rights shares acquirable by LFA, receipt of which has been deferred; |
(xvi) | 600,938 shares of our Class A common stock owned of record by KBCR; |
(xvii) | 43,693 shares of our Class A common stock owned of record by LFA; and |
(xviii) | 1,040,760 shares of Class A common stock acquirable upon exchange of 1,040,760 BGC Holdings exchangeable limited partnership units. |
(12) | Percentage based on (i) 334,364,449 shares of BGC Partners Class A common stock outstanding as of March 31, 2021, (ii) 45,884,380 shares of BGC Partners Class B common stock outstanding, (iii) 55,131,024 shares of BGC Partners Class A common stock acquirable upon exchange of 55,131,024 BGC Holdings exchangeable limited partnership interests held by Cantor, (iv) 7,742,325 April 2008 distribution rights shares acquirable by Mr. Lutnick, receipt of which has been deferred; (v) 1,231,396 February 2012 distribution rights shares acquirable by Mr. Lutnick, receipt of which has been deferred; (vi) 2,050,197 April 2008 distribution rights shares acquirable by CFGM, receipt of which has been deferred, (vii) 160,675 February 2012 distribution rights shares acquirable by CFGM, receipt of which has been deferred, (viii) 1,610,182 shares of BGC Partners Class A common stock receivable by pursuant to April 2008 distribution rights shares held by a trust for the benefit of Mr. Lutnick’ s family, receipt of which has been deferred, (ix) 2,048,000 shares of BGC Partners Class A common stock receivable pursuant to April 2008 distribution rights shares held by KBCR, receipt of which has been deferred, (x) 287,967 February 2012 distribution rights shares acquirable by KBCR, receipt of which has been deferred, (xi) 161,842 April 2008 distribution rights shares acquirable by LFA, receipt of which has been deferred, (xii) 16,193 February 2012 distribution rights shares acquirable by LFA, receipt of which has been deferred, and (xiii) 1,040,760 shares of BGC Partners Class A common stock acquirable upon exchange of 1,040,760 BGC Holdings exchangeable limited partnership units held directly by Mr. Lutnick. |
(13) | Mr. Merkel’s holdings consist of (i) 36,010 shares of our Class A common stock held in Mr. Merkel’s 401(k) account (as of March 31, 2021) and (ii) 6,258 shares of Class A common stock held in trusts for the benefit of Mr. Merkel’s immediate family, of which Mr. Merkel’s spouse is the sole trustee. |
(14) | Mr. Bisgay’s holdings consist of 1,503 shares of our Class A common stock held directly. |
(15) | Mr. Curwood’s holdings consist of 34,905 shares of our Class A common stock held directly. |
(16) | Mr. Moran’s holdings consist of 68,719 shares of our Class A common stock held directly. |
(17) | Ms. Bell’s holdings consist of 10,971 shares of our Class A common stock held directly. |
(18) | Mr. Richards’ holdings consist of 15,929 shares of our Class A common stock held directly. |
(19) | Percentage based on (i) 334,364,449 shares of our Class A common stock outstanding, (ii) 45,884,380 shares of our Class A common stock acquirable upon conversion of 45,884,380 shares of our Class B common stock outstanding, (iii) 55,131,024 shares of our Class A common stock acquirable upon exchange of 55,131,024 BGC Holdings exchangeable limited partnership interests held by Cantor, (iv) 1,040,760 shares of Class A common stock acquirable upon exchange of 1,040,760 BGC Holdings exchangeable limited partnership units held by Mr. Lutnick, and (v) 15,756,625 distribution rights shares, receipt of which has been deferred. |
Number of securities to be issued upon exercise of outstanding restricted stock units, options, warrants and rights (a) |
Weighted-average exercise price of outstanding options, warrants and rights (b) |
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) |
||||||||||
Equity Plan (approved by security holders) |
33,606,927 | $ | 3.93 | 118,508,180 | ||||||||
Equity compensation plans not approved by security holders |
||||||||||||
Total |
33,606,927 | $ | 3.93 | 118,508,180 |
• | the principal corporate transactions pursuant to which the BGC Group transferred to Newmark, Newmark Holdings and Newmark OpCo and their respective subsidiaries (the “Newmark Group”) the assets and liabilities of BGC, BGC Holdings, and BGC U.S. OpCo, and their respective subsidiaries (the “BGC Group”) relating to BGC’s Real Estate Services business, including BGC’s interests in both BPF and Real Estate LP; |
• | the proportional distribution in the Separation of interests in Newmark Holdings to holders of interests in BGC Holdings; |
• | the IPO and certain pre-IPO contributions of assets by BGC Partners to Newmark in exchange for additional shares thereof; |
• | the assumption and repayment of indebtedness by the BGC Group and the Newmark Group, as further described below; |
• | the Spin-Off, including the termination of certain arrangements between the BGC Group and the Newmark Group immediately prior thereto; |
• | the BGC Holdings distribution; |
• | indemnities by and among the BGC Group, the Newmark Group and Cantor and each of their respective directors, officers, general partners, managers and employees, from and against all liabilities with respect to liabilities retained or assumed by the BGC Group or the Newmark Group, as applicable, and/or resulting from breaches of the agreement; and |
• | future access to information, records and personnel necessary or appropriate to comply with regulatory requests or inquiries, for the preparation of financial statements or tax returns, or to conduct litigation. |
• | an apportionment of the existing economic attributes (including, among others, capital accounts and post-termination payments) of each BGC Holdings limited partnership unit outstanding immediately prior to the Separation (a “legacy BGC Holdings unit”) between such legacy BGC Holdings unit and the 0.4545 of a Newmark Holdings limited partnership unit issued in the Separation in respect of such legacy BGC Holdings unit (a “legacy Newmark Holdings unit”), based on the relative value of BGC and Newmark as of after the Newmark IPO; and |
• | a right of the employer of a partner (whether it be Newmark or BGC) to determine whether to grant exchangeability with respect to legacy BGC Holdings units or legacy Newmark Holdings units held by such partner. |
• | a general partnership interest, which is held indirectly by us; |
• | BGC Holdings exchangeable limited partnership interests, which are held by Cantor; |
• | BGC Holdings founding partner interests, which are limited partnership interests held by founding partners; |
• | BGC Holdings REU and AREU interests, which are limited partnership interests held by REU and AREU partners; |
• | a special voting limited partnership interest, which is held by us and which entitles us to remove and appoint the general partner of BGC Holdings; |
• | BGC Holdings working partner interests held by working partners; |
• | BGC Holdings RPU and ARPU interests, which are types of working partner interests held by RPU and ARPU partners; |
• | BGC Holdings PSI, PSE, APSI, PSU, APSU, HDUs, U.K. LPUs and N Units, which are types of working partner interests held by PSI, PSE, APSI, PSU, APSU, HDU, U.K. LPU and N Unit partners. HDUs are LPUs with capital accounts, which are liability awards recorded in “Accrued compensation” in our consolidated statements of financial condition. N Units are Non-distributing partnership units that may not be allocated any item of profit or loss and may not be made exchangeable into shares of our Class A common stock. Which units may include NREUs, NPREUs, NLPUs, NPLPUs, NPSUs, and NPPSUs; |
• | Certain BGC New LPUs and New PLPUs which are not entitled to distributions while non-exchangeable and that have certain employment-related conditions to exchangeability; and |
• | Preferred Units (“Preferred Units”), which are working partner units that may be awarded to holders of, or contemporaneous with the grant of, PSUs, PSIs, PSEs, LPUs, REUs, RPUs and AREUs and which carry the same name as the underlying unit, with the insertion of an additional “P” to designate them as Preferred Units. |
• | pursuant to the BGC separation, or as otherwise contemplated by the BGC separation agreement or the BGC Holdings limited partnership agreement; |
• | to Cantor and members of the Cantor group, in connection with a reinvestment in BGC Holdings; |
• | with respect to BGC Holdings founding/working partner interests, to an eligible recipient, which means any limited partner or member of the Cantor group or any affiliate, employee or partner thereof, in each case as directed by a BGC Holdings exchangeable limited partner majority in interest (provided that such person or entity is not primarily engaged in a business that competes with BGC Holdings or its subsidiaries); |
• | as otherwise agreed by us, as general partner, and a BGC Holdings exchangeable limited partner interest majority in interest; |
• | pursuant to the Participation Plan; |
• | to any then-current founding/working partner or limited partnership unit holder pursuant to the BGC Holdings limited partnership agreement; |
• | to any BGC Holdings partner in connection with a conversion of an issued unit and interest into a different class or type of unit and interest; and |
• | to Cantor in the event of a termination or bankruptcy of a founding/working partner or limited partnership unit holder or the redemption of a founding/working partner interest or limited partnership unit pursuant to the BGC Holdings limited partnership agreement. |
• | If the legacy BGC Holdings units and legacy Newmark Holdings unit are held by an employee of the BGC group providing services solely to the BGC group, then BGC Partners shall make such determination; |
• | If the legacy BGC Holdings units and legacy Newmark Holdings unit are held by an employee of the Newmark group providing services solely to the Newmark group, then Newmark shall make such determination; and |
• | If the legacy BGC Holdings units and legacy Newmark Holdings unit are held by an employee of the BGC group, the Newmark group or the Cantor group providing services to both the BGC group and the Newmark group, then BGC Partners shall make such determination to the extent that the grant of the exchange right relates to compensation for services by such employee to the BGC group, and Newmark shall make such determination to the extent that the grant of the exchange right relates to compensation for services by such employee to the Newmark group. Grants of exchangeability may be made at any time in the discretion of the relevant service recipient, and future grant practices may differ from prior practices, including without limitation in connection with performance achievement, changes in incentive arrangements, accounting principles, and tax laws (including deductibility of compensation) and other applicable laws. |
• | with respect to partners who are members of the Cantor group and the founding/working partners, on or prior to each estimated tax due date (the 15th day of each April, June, September and December in the case of a partner that is not an individual, and the 15th day of each April, June, September and January in the case of a partner who is an individual), such partner’s estimated proportionate quarterly tax distribution for such fiscal quarter; and |
• | as promptly as practicable after the end of each fiscal quarter, an amount equal to the excess, if any, of (a) the net positive cumulative amount allocated to such partner’s capital account pursuant to the BGC Holdings limited partnership agreement, over (b) the amount of any prior distributions to such partner. |
• | breach a founding/working partner’s or limited partnership unit holder’s, as the case may be, duty of loyalty to BGC Holdings, through the four-year period following the date on which such partner ceases, for any reason, to be a founding/working partner or limited partnership unit holder; |
• | engage in any activity of the nature set forth in clause (1) of the definition of the competitive activity (as defined below) through the two-year period following the date on which such partner ceases for any reason to be a founding/working partner or limited partnership unit holder; |
• | engage in any activity of the nature set forth in clauses (2) through (5) of the definition of competitive activity (as defined below) or take any action that results directly or indirectly in revenues or other benefit for that founding/working partner or limited partnership unit holder or any third party that is or could be considered to be engaged in any activity of the nature set forth in clauses (2) through (5) of the definition of competitive activity, except as otherwise agreed to in writing by BGC Holdings general partner, in its sole and absolute discretion, for the one-year period following the date on which such partner ceases, for any reason, to be a founding/working partner or limited partnership unit holder; |
• | make or participate in the making of (including through the applicable partner’s or any of his, her or its affiliates, respective agents or representatives) any comments to the media (print, broadcast, electronic or otherwise) that are disparaging regarding BGC Partners or the senior executive officers of BGC Partners or are otherwise contrary to the interests of BGC Partners as determined by the BGC Holdings general partner in its sole and absolute discretion, for the four-year period following the date on which such partner ceases, for any reason, to be a founding/working partner or a limited partnership unit holder, as the case may be; |
• | except as permitted with respect to corporate opportunities and fiduciary duties in the BGC Holdings limited partnership agreement (see “—Corporate Opportunity; Fiduciary Duty” below) take advantage of, or provide another person with the opportunity to take advantage of, a BGC Partners “corporate opportunity” (as such term would apply to BGC Holdings if it were a corporation) including opportunities related to intellectual property, which for this purpose requires granting BGC Partners a right of first refusal to acquire any assets, stock or other ownership interest in a business being sold by any partner or affiliate of such partner if an investment in such business would constitute a “corporate opportunity” (as such term would apply to BGC Holdings if it were a corporation), that has not been presented to and rejected by BGC Partners or that BGC Partners rejects but reserves for possible further action by BGC Partners in writing, unless otherwise consented to by BGC Holdings general partner in writing in its sole and absolute discretion, for a four-year period following the date on which such partner ceases, for any reason, to be a founding/working partner or a limited partnership unit holder, as the case may be; or |
• | otherwise take any action to harm, that harms or that reasonably could be expected to harm, BGC Partners for a four-year period following the date on which a founding/working partner or a limited partnership unit holder, as the case may be, ceases, for any reason, to be a founding/working partner or a limited partnership unit holder, as the case may be, including any breach of its confidentiality obligations. |
(1) | directly or indirectly, or by action in concert with others, solicits, induces, or influences, or attempts to solicit, induce or influence, any other partner, employee or consultant of Cantor, BGC Partners or any member of the Cantor group or affiliated entity to terminate their employment or other business arrangements with Cantor, BGC Partners or any member of the Cantor group or affiliated entity, or to engage in any competing business (as defined below) or hires, employs, engages (including as a consultant or partner) or otherwise enters into a competing business with any such person; |
(2) | solicits any of the customers of Cantor, BGC Partners or any member of the Cantor group or affiliated entity (or any of their employees), induces such customers or their employees to reduce their volume of business with, terminate their relationship with or otherwise adversely affect their relationship with, Cantor, BGC Partners or any member of the Cantor group or affiliated entity; |
(3) | does business with any person who was a customer of Cantor, BGC Partners or any member of the Cantor group or affiliated entity during the 12-month period prior to such partner becoming a terminated or bankrupt partner if such business would constitute a competing business; |
(4) | directly or indirectly engages in, represents in any way, or is connected with, any competing business, directly competing with the business of Cantor, BGC Partners or any member of the Cantor group or affiliated entity, whether such engagement will be as an officer, director, owner, employee, partner, consultant, affiliate or other participant in any competing business; or |
(5) | assists others in engaging in any competing business in the manner described in the foregoing clause (4). “Competing business” means an activity that (a) involves the development and operations of electronic trading systems, (b) involves the conduct of the wholesale or institutional brokerage business, (c) consists of marketing, manipulating or distributing financial price information of a type supplied by Cantor, BGC Partners, or any member of the Cantor group or affiliated entity to information distribution services or (d) competes with any other business conducted by Cantor, BGC Partners, any member of the Cantor group or affiliated entity if such business was first engaged in by Cantor or BGC Partners took substantial steps in anticipation of commencing such business and prior to the date on which such founding/working partner or limited partnership unit holder, as the case may be, ceases to be a founding/working partner or limited partnership unit holder, as the case may be. |
• | except as otherwise agreed to by each of the BGC Holdings general partner, the BGC Holdings exchangeable limited partners (by a majority in interest of the BGC Holdings exchangeable limited partnership interests) and the applicable founding partner, upon any termination or bankruptcy of a founding partner (or the termination or bankruptcy of the beneficial owner of the stock or other ownership interest of any such founding partner that is a corporation or other entity), BGC Holdings will purchase and redeem from such founding partner or his, her or its representative, and such founding partner or his, her or its representative will sell to BGC Holdings, all of the founding partner interests held by such founding partner (and, with the consent of the BGC Holdings general partner and Cantor, BGC Holdings may assign its right to purchase such founding partner interests to another partner); and |
• | except as otherwise agreed to by each of the BGC Holdings general partner and the applicable working partner or limited partnership unit holder, as the case may be, upon (1) any termination or bankruptcy of a working partner or limited partnership unit holder, as the case may be (or the termination or bankruptcy of the beneficial owner of the stock or other ownership interest of any such working partner or limited partnership unit holder that is a corporation or other entity) or (2) an election of the BGC Holdings general partner for any reason or for no reason whatsoever, BGC Holdings will purchase and redeem from such working partner or his, her or its representative, and such working partner or his, her or its representative will sell such REUs to BGC Holdings, all of the working partner interests held by such working partner (and, with the consent of the BGC Holdings general partner and Cantor, BGC Holdings may assign its right to purchase such partner interests to another partner). |
• | pursuant to a permitted exchange under the BGC limited partnership agreement; |
• | to any Cantor Company; |
• | in connection with an exchange with BGC Partners, if applicable; |
• | if the transferor limited partner is a member of the Cantor group, to any person; or |
• | with the prior written consent of the general partner and the exchangeable limited partners (by affirmative vote of a BGC Holdings exchangeable limited partnership interest majority in interest, not to be unreasonably withheld or delayed), provided that if such transfer could reasonably be expected to result in the partnership being classified or treated as a publicly traded partnership for U.S. federal income tax purposes, the withholding of consent to such transfer shall not be deemed unreasonable). |
• | in connection with an exchange with BGC Partners, if applicable; |
• | pursuant to a redemption; |
• | if the transferee limited partner is a member of the Cantor group (except that in the event such transferee ceases to be a member of the Cantor group, such interest will automatically transfer to Cantor); |
• | with the consent of the BGC Holdings exchangeable limited partnership interest majority in interest, to any other founding partner; or |
• | with the mutual consent of the general partner and the BGC Holdings exchangeable limited partnership interest majority in interest (which consent may be withheld for any reason or no reason), to any other person. |
• | pursuant to a redemption, in the case of working partners, and pursuant to the grants concurrently with the BGC separation, in the case of limited partnership unit holders; |
• | in connection with an exchange with BGC Partners, if applicable; |
• | if the transferee limited partner is a member of the Cantor group (except that in the event such transferee ceases to be a member of the Cantor group, such interest will automatically transfer to Cantor); or |
• | with the mutual consent of the general partner and the BGC Holdings exchangeable limited partnership interest majority in interest. |
• | to a new general partner as described below; or |
• | with the special voting limited partner’s prior written consent, to any other person. |
• | amend any provisions which require the consent of a specified percentage in interest of the limited partners without the consent of that specified percentage in interest of the limited partners; |
• | alter the interest of any partner in the amount or timing of distributions or the allocation of profits, losses or credits, if such alteration would either materially adversely affect the economic interest of a partner or would materially adversely affect the value of interests, without the consent of the partners holding at least two-thirds of all units, in the case of an amendment applying in substantially similar manner to all classes of interests, or two-thirds in interest of the affected class or classes of the partners, in the case of any other amendment; or |
• | alter the special voting limited partner’s ability to remove a general partner. |
• | a general partnership interest, which is held by BGC Holdings; |
• | limited partnership interests, which are directly and indirectly held by BGC Partners and BGC Holdings; and |
• | a special voting limited partnership interest, which is held by BGC Holdings and which entitles the holder thereof to remove and appoint the general partner of BGC U.S. OpCo or BGC Global OpCo, as the case may be. |
• | to BGC Partners and/or BGC Holdings and members of their group, as the case may be, in connection with an investment in BGC U.S. OpCo and BGC Global OpCo; |
• | to BGC Holdings or members of its group in connection with a redemption pursuant to the BGC Holdings limited partnership agreement as described in “—Second Amended and Restated BGC Holdings Limited Partnership Agreement—Redemption of BGC Holdings Founding/Working Partner Interests and Limited Partnership Units”; |
• | as otherwise agreed by each of the general partner and the limited partners (by affirmative vote of the limited partners holding a majority of the units underlying limited partnership interests outstanding of BGC U.S. OpCo or BGC Global OpCo, as the case may be (except that if BGC Holdings and its group holds a majority in interest and Cantor and its group holds a majority of units underlying the BGC Holdings exchangeable limited partnership interests, then majority of interest means Cantor), which we refer to as an “OpCos majority in interest”; |
• | to BGC Partners or BGC Holdings in connection with a grant of equity by BGC Partners or BGC Holdings; and |
• | to any BGC U.S. OpCo or BGC Global OpCo partner, as the case may be, in connection with a conversion of an issued unit and interest into a different class or type of unit and interest. |
• | on or prior to each estimated tax due date (the 15th day of each April, June, September and December, in the case of a partner that is not an individual, and the 15th day of each April, June, September and January in the case of a partner who is an individual, or, in each case, if earlier with respect to any quarter, the date on which BGC Partners is required to make an estimated tax payment), such partner’s estimated proportionate quarterly tax distribution for such fiscal quarter; |
• | on or prior to each estimated tax due date for partners who are members of the BGC Holdings group, an amount (positive or negative) for such fiscal quarter in respect of items of income, gain, loss or deduction allocated in respect of certain litigation matters; and |
• | as promptly as practicable after the end of each fiscal quarter (or on such other date and time as determined by the general partner) , an amount equal to (a) all amounts allocated to such partner’s capital account with respect to such quarter pursuant to the BGC U.S. OpCo limited partnership agreement or BGC Global OpCo limited partnership agreement, as the case may be, after the date of such agreement over (b) the amount of any prior distributions to such partner so long as such reduction does not bring the amount below zero. |
• | if the transferee limited partner will be a member of the BGC Partners group or the BGC Holdings group; or |
• | with the prior written consent of the general partner and the limited partners (by affirmative vote of an OpCos majority in interest, not to be unreasonably withheld or delayed). |
• | to a new general partner; or |
• | with the special voting limited partner’s prior written consent. |
• | amend any provisions which require the consent of a specified percentage in interest of the limited partners without the consent of that specified percentage in interest of the limited partners; |
• | alter the interest of any partner in the amount or timing of distributions or the allocation of profits, losses or credits, if such alteration would either materially adversely affect the economic interest of a partner or would materially adversely affect the value of interests, without the consent of the partners holding at least two-thirds of all units, in the case of an amendment applying in substantially similar manner to all classes of interests, or two-thirds in interest of the affected class or classes of the partners, in the case of any other amendment; or |
• | alter the special voting limited partner’s ability to remove a general partner. |
• | potential acquisitions and dispositions of businesses; |
• | the issuance or disposition of securities; |
• | the election of new or additional directors to the board of directors of either BGC or Newmark; |
• | the payment of dividends by either BGC or Newmark (if any), distribution of profits by BGC U.S., BGC Global and/or BGC Holdings or Newmark OpCo and/or Newmark Holdings, as applicable, and repurchases of shares of either company’s common stock or purchases of BGC Holdings or Newmark Holdings limited partnership interests or other equity interests in subsidiaries of either BGC or Newmark, as applicable, including from Cantor, BGC or executive officers of BGC or Newmark, other employees, partners and others, as applicable; |
• | business operations or business opportunities of BGC, Newmark and Cantor that would compete with the other party’s business opportunities; |
• | intellectual property matters; |
• | business combinations involving BGC or Newmark; |
• | conflicts between BGC’s agency trading for primary and secondary bond sales and Cantor’s investment banking bond origination business; |
• | competition between BGC’s and Cantor’s other equity derivatives and cash equity inter-dealer brokerage businesses; |
• | the terms of the Separation and Distribution agreement and the ancillary agreements BGC and Newmark entered into in connection with the Separation; |
• | the nature, quality and pricing of administrative services to be provided by BGC, Cantor and/or Tower Bridge; |
• | potential and existing loan arrangements; and |
• | provision of clearing capital pursuant to the Clearing Agreement and potential and existing loan arrangements. |
• | “BGC Partners Company” means BGC Partners or any of its affiliates (other than, if applicable, Newmark and Newmark’s subsidiaries); |
• | “Newmark Company” means Newmark or any of its affiliates; |
• | “representatives” means, with respect to any person, the directors, officers, employees, general partners or managing member of such person; and |
• | “corporate opportunity” means any business opportunity that BGC or Newmark, respectively, are financially able to undertake, that is, from its nature, in BGC’s or Newmark’s lines of business, respectively, is of practical advantage to BGC or Newmark, respectively, and is one in which BGC or Newmark, respectively has an interest or a reasonable expectancy, and in which, by embracing the opportunities, the self-interest of a BGC Partners Company, a Newmark Company or a Cantor Company or any of their respective representatives, as the case may be, will be brought into conflict with one another’s self-interest. |
• | Cantor is, in turn, controlled by CFGM, its managing general partner, and, ultimately, by Mr. Lutnick, who serves as our Chief Executive Officer and Chairman. Mr. Lutnick is also the Chairman of the Board and Chief Executive Officer of Cantor and the President and controlling stockholder of CFGM; |
• | Mr. Merkel, who serves as our Executive Vice President and General Counsel, is employed as Executive Managing Director, General Counsel and Secretary of Cantor. |
• | will be deemed to have fully satisfied and fulfilled any fiduciary duty that person has to us; |
• | will not be liable to us or any of our stockholders for breach of fiduciary duty by reason of such person’s action or inaction with respect to the corporate opportunity; |
• | will be deemed to have acted in good faith and in a manner that such person reasonably believed to be in, and not opposed to, our best interests; and |
• | will be deemed not to have breached such person’s duty of loyalty to us and our stockholders, and not to have derived an improper personal benefit therefrom. |
• | will be deemed to have fully satisfied and fulfilled any fiduciary duty that such person has to us as a representative of us with respect to such corporate opportunity; |
• | will not be liable to us or any of our stockholders for breach of fiduciary duty by reason of such person’s action or inaction with respect to such corporate opportunity; |
• | will be deemed to have acted in good faith and in a manner that such person reasonably believed to be in, and not opposed to, our best interests; and |
• | will be deemed not to have breached a duty of loyalty to us and our stockholders and not to have derived an improper personal benefit therefrom. |
• | such contract, agreement, arrangement or transaction is approved by BGC’s Board of Directors or any committee thereof by the affirmative vote of a majority of the disinterested directors, even if the disinterested directors constitute less than a quorum; |
• | such contract, agreement, arrangement or transaction is approved by BGC’s stockholders by the affirmative vote of a majority of the voting power of all of Newmark’s outstanding shares of capital stock entitled to vote thereon, excluding from such calculation shares of capital stock that are beneficially owned (as such term is defined in Rule 16a-1(a)(2) promulgated by the SEC under the Exchange Act) by a BGC Partners Company, a Newmark Company, or a Cantor Company, respectively; or |
• | such contract, agreement, arrangement or transaction, judged according to the circumstances at the time of the commitment, is fair to us. |
• | such contract, agreement, arrangement or transaction is approved by Newmark’s Board of Directors or any committee thereof by the affirmative vote of a majority of the disinterested directors, even if the disinterested directors constitute less than a quorum; |
• | such contract, agreement, arrangement or transaction is approved by Newmark’s stockholders by the affirmative vote of a majority of the voting power of all of Newmark’s outstanding shares of capital stock entitled to vote thereon, excluding from such calculation shares of capital stock that are beneficially owned (as such term is defined in Rule 16a-1(a)(2) promulgated by the SEC under the Exchange Act by a BGC Partners Company or a Cantor Company, respectively; or |
• | such contract, agreement, arrangement or transaction, judged according to the circumstances at the time of the commitment, is fair to us. |
ITEM 14. |
PRINCIPAL ACCOUNTANT FEES AND SERVICES |
Year Ended December 31, |
||||||||
2020 |
2019 |
|||||||
Audit fees |
$ | 9,286,774 | $ | 8,702,495 | ||||
Audit-related fees |
138,000 | 224,325 | ||||||
Tax fees |
3,024,904 | 1,854,395 | ||||||
All other fees |
— | — | ||||||
|
|
|
|
|||||
Total |
$ | 12,449,678 | $ | 10,781,215 |
ITEM 15. |
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES |
Exhibit Number |
Exhibit Title | |
101 | The following materials from BGC Partners’ Annual Report on Form 10-K for the period ended December 31, 2020 are formatted in inline eXtensible Business Reporting Language (iXBRL): (i) the Consolidated Statements of Financial Condition, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Comprehensive Income (Loss), (iv) the Consolidated Statements of Cash Flows, (v) the Consolidated Statements of Changes in Equity, (vi) Notes to the Consolidated Financial Statements, and (vii) Schedule I, Parent Company Only Financial Statements. The XBRL Instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the iXBRL document. | |
104 | The cover page from this Amendment No. 1 to Annual Report on Form 10-K/A, formatted in inline XBRL. |
BGC Partners, Inc. | ||
By: | /s/ Howard W. Lutnick | |
Name: Howard W. Lutnick | ||
Title: Chairman of the Board and Chief Executive Officer |