Stockholders' Equity

6 Months Ended

Jun. 30, 2014

Stockholders' Equity [Abstract]

Stockholders' Equity

H. Stockholders' Equity

Shares outstanding were 25.9 million, 26.1 million and 25.6 million on June 30, 2014, December 31, 2013 and June 30, 2013, respectively.

Dividends

	Payment Date	Record Date	Amount
Three months ended March 31, 2014	March 25, 2014	March 11, 2014	$	0.06
Three months ended June 30, 2014	June 24, 2014	June 10, 2014	$	0.06
Six months ended June 30, 2014			$	0.12
Three months ended March 31, 2013	March 26, 2013	March 12, 2013	$	0.05
Three months ended June 30, 2013	June 25, 2013	June 11, 2013	$	0.05
Six months ended June 30, 2013			$	0.10

Voting Rights

The holders of Class A Common stock ("Class A Stock") and Class B Common stock ("Class B Stock") have identical rights except that (i) holders of Class A Stock are entitled to one vote per share, while holders of Class B Stock are entitled to ten votes per share on all matters to be voted on by shareholders in general, and (ii) holders of Class A Stock are not eligible to vote on matters relating exclusively to Class B Stock and vice versa.

Stock Award and Incentive Plan

The Company maintains two plans approved by the shareholders, the 1999 Plan and the 2002 Plan, which are designed to provide incentives which will attract and retain individuals key to the success of GAMCO through direct or indirect ownership of our common stock.  Benefits under both the 1999 and 2002 Plans may be granted in any one or a combination of stock options, stock appreciation rights, restricted stock, restricted stock units, stock awards, dividend equivalents and other stock or cash based awards.  A maximum of 1.5 million shares of Class A Stock were originally reserved for issuance under each of the 1999 and 2002 Plans by a committee of the Board of Directors responsible for administering the Plans ("Compensation Committee").  In November 2013, the shareholders approved an amendment to the Company's 2002 Stock Award and Incentive Plan to increase the number of shares of Class A Stock authorized and reserved for issuance by 2 million.  Under the Plans, the committee may grant restricted stock awards ("RSA") and either incentive or nonqualified stock options with a term not to exceed ten years from the grant date and at an exercise price that the Compensation committee may determine.  Options granted under the plans typically vest 75% after three years and 100% after four years from the date of grant and expire after ten years.  RSA shares granted under the Plans typically vest 30% after three years and 100% after five years.

On January 9, 2014, the Company approved the granting of 2,100 RSA shares at a grant date fair value of $81.99 per share.  As of June 30, 2014 and December 31, 2013, there were 564,250 RSA shares and 566,950 RSA shares outstanding, respectively, that were previously issued at an average weighted grant price of $63.93 and $63.93, respectively.  All grants of the RSA shares were recommended by the Company's Chairman, who did not receive a RSA, and approved by the Compensation Committee.  This expense, net of estimated forfeitures, is recognized over the vesting period for these awards which is 30% over three years from the date of grant and 70% over five years from the date of grant, except for the August 2013 grant which is 30% over three years from the date of grant and 10% each year over years four through ten from the date of grant.  During the vesting period, dividends to RSA holders are held for them until the RSA vesting dates and are forfeited if the grantee is no longer employed by the Company on the vesting dates.  Dividends declared on these RSAs, less estimated forfeitures, are charged to retained earnings on the declaration date.  There were no RSAs outstanding at June 30, 2013.

For the three months ended June 30, 2014 and June 30, 2013, we recognized stock-based compensation expense of $1.7 million and $15,000, respectively.  For the six months ended June 30, 2014 and June 30, 2013, we recognized stock-based compensation expense of $3.4 million and $29,000, respectively. Actual and projected stock-based compensation expense for RSA shares and options for the years ended December 31, 2014 through December 31, 2023 (based on awards currently issued or granted) is as follows ($ in thousands):

		2013		2014		2015		2016		2017		2018
	Q1	$	15	$	1,700	$	1,695	$	1,694	$	903	$	771
	Q2		15		1,697		1,694		1,694		903		771
	Q3		741		1,697		1,694		1,339		816		702
	Q4		1,301		1,697		1,694		1,078		773		554
Full Year		$	2,072	$	6,791	$	6,777	$	5,805	$	3,395	$	2,798
			2019		2020		2021		2022		2023
	Q1	$	325	$	240	$	168	$	105	$	50
	Q2		325		240		168		105		50
	Q3		268		192		126		68		17
	Q4		240		168		105		50		-
Full Year		$	1,158	$	840	$	567	$	328	$	117

The total compensation cost related to non-vested options not yet recognized is approximately $25.2 million as of June 30, 2014.  For the three months ended June 30, 2014, proceeds from the exercise of 20,000 stock options were $792,000 resulting in a tax benefit to GAMCO of $175,000.  There were no options exercised for the three months ended June 30, 2013.  For the six months ended June 30, 2014 and 2013, proceeds from the exercise of 40,000 stock options and 2,623 stock options, respectively, were $1.6 million and $76,000, respectively, resulting in a tax benefit to GAMCO of $349,000 and $16,000, respectively.

Stock Repurchase Program

In March 1999, GAMCO's Board of Directors established the Stock Repurchase Program to grant management the authority to repurchase shares of our Class A Common Stock.  On February 5, 2013, our Board of Directors authorized an incremental 500,000 shares to be added to the current buyback authorization.  For the three months ended June 30, 2014 and June 30, 2013, the Company repurchased 103,528 shares and 81,726 shares, respectively, at an average price per share of $77.76 and $52.73, respectively.  For the six months ended June 30, 2014 and June 30, 2013, the Company repurchased 224,720 shares and 118,402 shares, respectively, at an average price per share of $78.75 and $52.99, respectively.  From the inception of the program through June 30, 2014, 8,936,313 shares have been repurchased at an average price of $43.17 per share.  At June 30, 2014, the total shares available under the program to be repurchased in the future were 698,495.