Earnings Per Share

3 Months Ended

Mar. 31, 2012

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share

The Company calculates its basic and diluted earnings per share in accordance with US GAAP. Basic earnings per common share is calculated by dividing net income attributable to Cowen Group, Inc. stockholders by the weighted average number of common shares outstanding for the period. As of March 31, 2012, there were 113,976,466 shares outstanding, of which 461,359 are restricted. To the extent that outstanding restricted shares are unvested, they are excluded from the calculation of basic earnings per share. The Company has included 195,130 fully vested, unissued restricted stock units in its calculation of basic earnings per share.

Diluted earnings per common share are calculated by adjusting the weighted average outstanding shares to assume conversion of all potentially dilutive nonvested restricted stock and stock options. The Company uses the treasury stock method to reflect the potential dilutive effect of the unvested restricted shares, restricted stock units and unexercised stock options. In calculating the number of dilutive shares outstanding, the shares of common stock underlying unvested restricted shares and restricted stock units are assumed to have been delivered, and options are assumed to have been exercised, on the grant date. The assumed proceeds from the assumed vesting, delivery and exercising were calculated as the sum of (a) the amount of compensation cost attributed to future services and not yet recognized and (b) the amount of tax benefit that would be credited to additional paid-in capital assuming vesting and delivery of the restricted stock. The tax benefit is the amount resulting from a tax deduction for compensation in excess of compensation expense recognized for financial statement reporting purposes. All outstanding stock options were not included in the computation of diluted net income per common share for the three months endedMarch 31, 2012 and 2011, respectively, as their inclusion would have been anti-dilutive.

The computation of earnings per share is as follows:

	Three Months Ended March 31,
	2012		2011
	(dollars in thousands, except per share data)
Net income (loss) attributable to Cowen Group, Inc. stockholders	$	3,995	$	82
Shares for basic and diluted calculations:
Weighted average shares used in basic computation	114,281		74,160
Stock options	—		—
Restricted stock	1,382		1,923
Weighted average shares used in diluted computation	115,663		76,083
Earnings (loss) per share:
Basic	$	0.03	$	0.00
Diluted	$	0.03	$	0.00