Earnings Per Share

12 Months Ended

Dec. 31, 2021

Earnings Per ShareBasic earnings per share is calculated by dividing net income attributable to the Company's common stockholders by the weighted average number of shares of Class A common stock outstanding for the period. As of December 31, 2021, there were 27,778,964 shares of Class A common stock outstanding. As of December 31, 2021, the Company has included 972,732 fully vested, unissued restricted stock units and restricted shares in its calculation of basic earnings per share. As of December 31, 2020, there were 26,845,628 shares of Class A common stock outstanding. As of December 31, 2020, the Company has included 334,230 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 items. The Company uses the treasury stock method to reflect the potential dilutive effect of the unvested restricted shares, and restricted stock units. 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, for the entire period being presented. The number of performance-linked unvested restricted stock units that are included in the calculation are at the amount that could be earned using current payout rates. The assumed proceeds from the assumed vesting, delivery and exercising were calculated as the amount of compensation cost attributed to future services and not yet recognized.

The Company previously concluded that it had the intent and ability to settle the December 2022 Convertible Notes in cash and, as a result, the convertible notes did not have an impact on the Company's diluted earnings per share calculation. On March 24, 2021, the Company issued a redemption notice announcing that the Company would redeem all of the December 2022 Convertible Notes (See Note 16). On June 24, 2021, the Company cash settled the December 2022 Convertible Notes up to the principal amount of the December 2022 Convertible Notes and share settled through the delivery of shares of the Company’s Class A common stock for the remainder of the conversion obligation in excess of the principal amount. The shares of the Company’s Class A common stock issued are within basic earnings per share subsequent to June 24, 2021. Prior to that date, the Company has applied the if-converted method to the portion of the December 2022 notes above the principal amount that settled in shares upon a conversion in dilutive earnings per share.

On December 31, 2021, the Company irrevocably elected to cash settle $1,000 of its obligation in respect of each conversion of any share of the Series A Convertible Preferred Stock (the “Series A Convertible Preferred Stock”). Prior to this date, the Company could elect to settle the Series A Convertible Preferred Stock in shares, cash, or a combination of both. The Company’s intent is to settle in cash. As a result, the Series A Convertible Preferred Stock does not have an impact on the Company’s diluted earnings per share calculation. See Note 2 for the impact of the Series A Convertible Preferred Stock earnings per share calculation with the adoption of ASU 2020-06 on January 1, 2022.

The computation of earnings per share is as follows:


	Year Ended December 31,
		2021		2020		2019
		(dollars and share data in thousands, except per share data)
Net income (loss)		$	303,991	207,064		$	55,870
Net income (loss) attributable to non-controlling interests in consolidated subsidiaries and investment funds		8,380		(9,299)		31,239
Net income (loss) attributable to Cowen Inc.		295,611		216,363		24,631
Preferred stock dividends		6,792		6,792		6,792
Net income (loss) attributable to Cowen Inc. common stockholders		$	288,819	$	209,571	$	17,839

Shares for basic and diluted calculations:
Weighted average shares used in basic computation		27,721		27,790		29,525

Performance based restricted stock		755		—		—
Contingently issuable common stock in connection with acquisitions		—		85		26
December 2022 Convertible Notes		1,404		—		—
Restricted stock		2,748		1,644		1,735
Weighted average shares used in diluted computation		32,628		29,519		31,286
Earnings (loss) per share:
Basic		$	10.42	$	7.54	$	0.60
Diluted		$	8.85	$	7.10	$	0.57