18.

Compensation

The Company’s Compensation Committee may grant various equity-based awards, including restricted stock units, restricted stock, stock options, limited partnership units and exchange rights for shares of the Company’s Class A common stock upon exchange of limited partnership units and FPUs. A maximum of 300 million shares of the Company’s Class A common stock are authorized to be delivered or cash settled pursuant to awards granted. As of September 30, 2014, the limit on the aggregate number of shares authorized to be delivered allows for the grant of future awards relating to 148.1 million shares. Upon vesting of RSUs, issuance of restricted stock or exercise of employee stock options, the Company generally issues new shares of the Company’s Class A common stock.

Limited Partnership Units

A summary of the activity associated with limited partnership units is as follows:


	Number of Units
Balance at December 31, 2013		29,875,900
Granted		33,735,993
Redeemed/exchanged units		(15,273,287	)
Forfeited units		(802,492	)

Balance at September 30, 2014		47,536,114

During the three months ended September 30, 2014 and 2013, the Company granted exchangeability on 6.6 million, and 0.8 million limited partnership units for which the Company incurred compensation expense, before associated income taxes, of $47.3 million and $5.4 million, respectively. During the nine months ended September 30, 2014 and 2013, the Company granted exchangeability on 12.9 million, and 5.8 million limited partnership units for which the Company incurred compensation expense, before associated income taxes, of $96.5 million and $28.9 million, respectively.

As of September 30, 2014 and December 31, 2013, the number of limited partnership units exchangeable into shares of Class A common stock at the discretion of the unit holder was 1.7 million and 1.9 million, respectively.

As of September 30, 2014 and December 31, 2013, the notional value of the limited partnership units with a post-termination pay-out amount held by executives and non-executive employees, awarded in lieu of cash compensation for salaries, commissions and/or discretionary or guaranteed bonuses was $56.7 million and $35.1 million, respectively. As of September 30, 2014 and December 31, 2013, the aggregate estimated fair value of these limited partnership units was $10.1 million and $5.5 million, respectively. The number of outstanding limited partnership units as of September 30, 2014 and December 31, 2013, was 10.3 million and 7.2 million, respectively, of which 5.7 million and 4.1 million were unvested.

Compensation expense related to limited partnership units with a post-termination pay-out amount is recognized over the stated service period. These units generally vest between three and five years from the date of grant. The Company recognized compensation expense, before associated income taxes, related to limited partnership units that were not redeemed of $1.4 million and $0.7 million for the three months ended September 30, 2014 and 2013, respectively. The Company recognized compensation expense, before associated income taxes, related to limited partnership units that were not redeemed of $4.8 million and $4.5 million for the nine months ended September 30, 2014 and 2013, respectively.

The limited partnership units generally receive quarterly allocations of net income, which are cash distributed on a quarterly basis and generally contingent upon services being provided by the unit holders. The allocation of income to limited partnership units and FPUs was $5.2 million and $4.9 million for the three months ended September 30, 2014 and 2013, respectively. The allocation of income to limited partnership units and FPUs was $9.8 million and $58.5 million for the nine months ended September 30, 2014 and 2013, respectively.

Restricted Stock Units

A summary of the activity associated with RSUs is as follows:


	Restricted Stock Units			Weighted-Average Grant Date Fair Value		Weighted-Average Remaining Contractual Term (Years)
Balance at December 31, 2013		2,824,602		$	4.51		1.79
Granted		899,118			5.82
Delivered units		(1,135,242	)		5.31
Forfeited units		(300,165	)		4.93

Balance at September 30, 2014		2,288,313		$	4.58		1.92

The fair value of RSUs awarded to employees and directors is determined on the date of grant based on the market value of Class A common stock (adjusted if appropriate based upon the award’s eligibility to receive dividends), and is recognized, net of the effect of estimated forfeitures, ratably over the vesting period. The Company uses historical data, including historical forfeitures and turnover rates, to estimate expected forfeiture rates for both employee and director RSUs. Each RSU is settled in one share of Class A common stock upon completion of the vesting period.

During the nine months ended September 30, 2014 and 2013, the Company granted 0.9 million and 1.3 million, respectively, of RSUs with aggregate estimated grant date fair values of approximately $5.2 million and $3.8 million, respectively, to employees and directors. These RSUs were awarded in lieu of cash compensation for salaries, commissions and/or discretionary or guaranteed bonuses. RSUs granted to these individuals generally vest over a two- to four-year period.

For RSUs that vested during the nine months ended September 30, 2014 and 2013, the Company withheld shares valued at $.0.8 million and $1.0 million, respectively, to pay taxes due at the time of vesting.

As of September 30, 2014 and December 31, 2013, the aggregate estimated grant date fair value of outstanding RSUs was approximately $10.5 million and $12.7 million, respectively.

Compensation expense related to RSUs, before associated income taxes, was approximately $1.3 million and $1.2 million for the three months ended September 30, 2014 and 2013, respectively. Compensation expense related to RSUs, before associated income taxes, was approximately $4.2 million and $4.5 million for the nine months ended September 30, 2014 and 2013, respectively. As of September 30, 2014, there was approximately $11.8 million of total unrecognized compensation expense related to unvested RSUs.

Restricted Stock

At the end of the second quarter of 2013, pursuant to the Global Partnership Restructuring Program the Company granted approximately 44 million shares of the Company’s Class A common stock, of which approximately 41 million were restricted shares. Transferability of the shares of restricted stock is not subject to continued employment or service with the Company or any affiliate or subsidiary of the Company; however, transferability is subject to compliance with BGC Partners’ and its affiliates’ customary noncompete obligations. Because the restricted stock was not subject to continued employment or service, the grant-date fair value of the restricted stock was expensed on the date of grant. During the nine months ended September 30, 2013, the Company incurred non-cash, non-dilutive compensation charges of $304.1 million related to the redemption/exchange of partnership units and issuance of restricted shares.

The restricted shares are generally saleable by partners in five to ten years. Partners who agree to extend the lengths of their employment agreements and/or other contractual modifications sought by the Company are expected to be able to sell their restricted shares over a shorter time period. During the year ended December 31, 2013, the Company released the restrictions with respect to approximately 5.9 million of such shares. In addition, during the nine months ended September 30, 2014 the Company released the restrictions with respect to approximately 7.3 million of such shares.

Stock Options

A summary of the activity associated with stock options is as follows:


	Options			Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value
Balance at December 31, 2013		4,491,238		$	11.60		2.0	$	—
Granted		—			—
Exercised options		—			—
Forfeited options		(513,000	)		16.89

Balance at September 30, 2014		3,978,238		$	10.85		1.5	$	—

The Company did not grant any stock options during the nine months ended September 30, 2014 and 2013. There were no stock options exercised during the nine months ended September 30, 2014 and 2013.

The Company did not record any compensation expense related to stock options for the three or nine months ended September 30, 2014 or 2013, as all of these options had vested in prior years. As of September 30, 2014, all of the outstanding options are exercisable and the compensation expense related to stock options was fully recognized.