Employee Compensation and Benefits

6 Months Ended

Jun. 30, 2022

For the three and six months ended June 30, 2022 and 2021, employee compensation and benefits consisted of the following:


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Cash-based employee compensation and benefits	$	40,788	$	41,057	$	82,164	$	82,837
Equity-based compensation	5,604		5,604		15,485		32,640
Partnership interest-based compensation	7,027		10,026		14,142		14,929
Carried interest compensation	6,039		17,596		11,894		24,456
Cash-based incentive fee related compensation	1,219		868		2,813		2,701
Other non-cash compensation	752		683		836		1,624
Total employee compensation and benefits	$	61,429	$	75,834	$	127,334	$	159,187

Partnership Interest in Holdings, Holdings II and Management LLC

Payments to the employees for partnership interest awards are made by Holdings, Holdings II and Management LLC. As a result, the Company records a non-cash profits interest compensation charge and an offsetting deemed contribution to equity (deficit) to reflect the payments made by the GCMH Equityholders. As the payments are made by Holdings, Holdings II and Management LLC, the expense that is pushed down to GCMH and the offsetting deemed contribution are each attributed solely to noncontrolling interests in GCMH. Any liability related to the awards is recognized at Holdings, Holdings II or Management LLC as Holdings, Holdings II or Management LLC is the party responsible for satisfying the obligation, and is not shown in the Company’s Condensed Consolidated Financial Statements. The Company has recorded deemed contributions to equity (deficit) from Holdings, Holdings II and Management LLC of approximately $7.0 million and $10.0 million for the three months ended June 30, 2022 and 2021, respectively, and $14.1 million and $14.9 million for the six months ended June 30, 2022 and 2021, respectively, for partnership interest-based compensation expense which will ultimately be paid by Holdings, Holdings II or Management LLC.

The Company has modified awards to certain individuals upon their voluntary retirement or intention to retire as employees. These awards generally include a stated target amount that, upon payment, terminates the recipient’s rights to future distributions and allows for a lump sum buy-out of the awards, at the discretion of the managing member of Holdings, Holdings II, and Management LLC. The awards are accounted for as partnership interest-based compensation at the fair value of these expected future payments, in the period the employees accepted the offer. Partnership interest-based compensation expense related to award modifications of $1.5 million was recognized for each of the three months ended June 30, 2022 and 2021, and $3.1 million was recognized for each of the six months ended June 30, 2022 and 2021.

The liability associated with awards that contain a stated target has been retained by Holdings as of June 30, 2022 and December 31, 2021 and is re-measured at each reporting date, with any corresponding changes in liability being reflected as employee compensation and benefits expense of the Company. Certain recipients had unvested stated target payments of $3.1 million and $9.4 million as of June 30, 2022 and 2021, respectively, which has not been reflected as employee compensation and benefits expense by the Company. The Company recognized partnership interest-based compensation expense of $5.5 million and $8.5 million for the three months ended June 30, 2022 and 2021, respectively, and $11.0 million and $11.8 million for the six months ended June 30, 2022 and 2021, respectively, related to profits interest awards that are in substance profit-sharing arrangements.

Other

Other consists of employee compensation and benefits expense related to deferred compensation programs and other awards that represent investments made in GCM Funds on behalf of the employees.