Related Parties |
12 Months Ended | ||
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Dec. 31, 2018 | |||
Related Party Transactions [Abstract] | |||
Related Parties |
Sponsored Funds The Company serves as an investment advisor for certain affiliated investment companies and fund entities and receives management fees and, for the alternative investment funds, performance-based incentive fees for providing such services. Investment advisory fees relating to such services were $654,561, $649,089 and $516,667 for the years ended December 31, 2018, 2017 and 2016, respectively, and are included in “asset management fees” on the consolidated statements of operations. Of such amounts, $59,304 and $69,107 remained as receivables at December 31, 2018 and 2017, respectively, and are included in “fees receivable” on the consolidated statements of financial condition. Tax Receivable Agreement The Second Amended and Restated Tax Receivable Agreement, dated as of October 26, 2015 (the “Amended and Restated Tax Receivable Agreement”), between Lazard and LTBP Trust, a Delaware statutory trust (the “Trust”), provides for the payment by our subsidiaries to the Trust of (i) approximately 45% of the amount of cash savings, if any, in U.S. federal, state and local income tax or franchise tax that we actually realize as a result of certain increases in tax basis and of certain other tax benefits related to the Amended and Restated Tax Receivable Agreement, and (ii) an amount that we currently expect will approximate 85% of the cash tax savings that may arise from tax benefits attributable to payments under the Amended and Restated Tax Receivable Agreement. Our subsidiaries expect to benefit from the balance of cash savings, if any, in income tax that our subsidiaries realize. Any amount paid by our subsidiaries to the Trust will generally be distributed to the owners of the Trust, who include certain of our executive officers, in proportion to their beneficial interests in the Trust. For purposes of the Amended and Restated Tax Receivable Agreement, cash savings in income and franchise tax will be computed by comparing our subsidiaries’ actual income and franchise tax liability to the amount of such taxes that our subsidiaries would have been required to pay had there been no increase in the tax basis of certain tangible and intangible assets of Lazard Group attributable to our subsidiaries’ interest in Lazard Group and had our subsidiaries not entered into the Amended and Restated Tax Receivable Agreement. The term of the Amended and Restated Tax Receivable Agreement will continue until approximately 2033 or, if earlier, until all relevant tax benefits have been utilized or expired. The amount of the Amended and Restated Tax Receivable Agreement liability is an undiscounted amount based upon currently enacted tax laws, including the Tax Act, the current structure of the Company and various assumptions regarding potential future operating profitability. The assumptions reflected in the estimate involve significant judgment. For example, if our structure were to change or our annual taxable income were to increase, we could be required to accelerate payments under the Amended and Restated Tax Receivable Agreement. As such, the actual amount and timing of payments under the Amended and Restated Tax Receivable Agreement could differ materially from our estimates. Any changes in the amount of the estimated liability would be recorded as a non-compensation expense in the consolidated statement of operations. Adjustments, if necessary, to the related deferred tax assets would be recorded through the “provision (benefit) for income taxes”. For the years ended December 31, 2018 and 2017, the Company recorded a “benefit pursuant to tax receivable agreement” on the consolidated statements of operations of $6,495 and $202,546, respectively. As described in Note 17, the Tax Act reduced the U.S. corporate tax rate from 35% to 21% which required the Company to remeasure the tax receivable agreement obligation. Pursuant to the change in the U.S. corporate tax rate, in 2017, the Company reduced the tax receivable agreement obligation by $202,546. The cumulative liability relating to our obligations under the Amended and Restated Tax Receivable Agreement as of December 31, 2018 and 2017 was $270,640 and $310,275, respectively, and is recorded in “tax receivable agreement obligation” on the consolidated statements of financial condition. The balance at December 31, 2018 reflects a payment made under the Amended and Restated Tax Receivable Agreement in the year ended December 31, 2018 of $33,140. Other In the fourth quarter of 2018, the Company established a not-for-profit entity, the Lazard Foundation (the “Foundation”), with the objective of donating funds to qualifying charities. In November 2018, the Company made an unconditional commitment of $10,000 to the Foundation. The Company agreed to fund the unconditional commitment by December 31, 2028. Certain executive officers of the Company will serve as members, directors and officers of the Foundation. In accordance with U.S. GAAP, the Foundation is not consolidated in the accompanying financial statements. See Note 14 for information regarding related party transactions pertaining to shares repurchased from certain of our executive officers. |