ý
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Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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o
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Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Delaware
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20-8999751
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(State or Other Jurisdiction of
Incorporation or Organization)
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(I.R.S. Employer
Identification No.)
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Title of Each Class
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Name of Each Exchange on Which Registered
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Class A Common Stock, par value $.01 per share
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New York Stock Exchange
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Large accelerated filer
o
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Accelerated filer
x
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Non-accelerated filer
o
(Do not check if a smaller
reporting company)
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Smaller reporting company
o
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Page
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•
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our anticipated future results of operations and operating cash flows;
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•
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our business strategies and investment policies;
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•
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our financing plans and the availability of short- or long-term borrowing, or equity financing;
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•
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our competitive position and the effects of competition on our business;
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•
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potential growth opportunities available to us;
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•
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the recruitment and retention of our employees;
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•
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our expected levels of compensation for our employees;
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•
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our potential operating performance, achievements, efficiency and cost reduction efforts;
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•
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our expected tax rate;
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•
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changes in interest rates;
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•
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our expectation with respect to the economy, capital markets, the market for asset management services and other industry trends; and
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•
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the impact of future legislation and regulation, and changes in existing legislation and regulation, on our business.
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ITEM 1.
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BUSINESS
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(1)
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As of
December 31, 2014
, the members of Pzena Investment Management, LLC, other than us, consisted of:
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•
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Four of our named executive officers and their estate planning vehicles, who collectively held approximately 55.8% of the economic interests in Pzena Investment Management, LLC. For more detail on executive officer ownership, see "Item 12 — Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters”.
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•
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32 of our other employee members, who collectively held approximately 4.2% of the economic interests in Pzena Investment Management, LLC.
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•
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Certain other members of our operating company, including one of our directors and his related entities, and former employees, who collectively held approximately 20.2% of the economic interests in Pzena Investment Management, LLC.
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(2)
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Each share of Class A common stock is entitled to one vote per share. Class A common stockholders have 100% of the rights of all classes of our capital stock to receive distributions.
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(3)
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Each share of Class B common stock is entitled to five votes per share for so long as the number of shares of Class B common stock outstanding represents at least 20% of all shares of common stock outstanding. Holders of Class B common stock have the right to receive the par value of the Class B common stock held by them upon our liquidation, dissolution or winding up, but do not share in dividends.
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(4)
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As of
December 31, 2014
, we held
13,044,719
Class A units of Pzena Investment Management, LLC, which represented the right to receive
19.8%
of the distributions made by Pzena Investment Management, LLC.
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(5)
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As of
December 31, 2014
, the principals collectively held
52,980,812
Class B units of Pzena Investment Management, LLC, which represented the right to receive
80.2%
of the distributions made by Pzena Investment Management, LLC.
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•
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willingness to invest in companies before their stock prices reflect signs of business improvement, and
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•
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significant patience, based upon our understanding of the business’ fundamentals, and our long-term investment horizon.
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•
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Focus on Investment Excellence.
We recognize that we must achieve investment excellence in order to attain long-term business success. All of our business decisions, including the design of our investment process and our willingness to limit AUM in our investment strategies, are focused on producing attractive long-term investment results. We believe that our long-term investment performance, together with our willingness to close our strategies to new investors in order to optimize the prospects for future performance, has contributed to our positive reputation among our clients and the institutional consultants who advise them.
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•
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Consistency of Investment Process.
Since our inception over nineteen years ago, we have utilized a classic value investment approach and a systematic, disciplined investment process to construct portfolios for our investment strategies in U.S. and non-U.S. markets across all market capitalizations. The consistency of our process has allowed us to leverage the same investment team to launch new strategies. We believe that our consistent investment process has resulted in our strong brand recognition in the investment community.
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•
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Diverse and High Quality Client Base.
We believe that we have developed a favorable reputation in the institutional investment community. This is evidenced by our strong relationships with institutional investors, investment consultants, and mutual fund providers, as well as the diversity and sophistication of our investors. For more information concerning our client base, see “Our Client Relationships and Distribution Approach” below.
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•
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Experienced Investment Professionals and a Team-Oriented Approach.
We believe that our greatest asset is the experience of the individuals on our team. For more information on our investment team, see “Our Investment Team” below.
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•
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Employee Retention.
We have focused on building an environment that we believe is attractive to talented investment professionals. Important among our practices are our team-oriented approach to investment decisions, rotation of coverage areas among individuals, and our culture of employee ownership.
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•
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Culture of Ownership.
We believe in significant ownership of our business by the key contributors to our success. Since our inception, we have communicated to all our employees that they have the opportunity to become members of our operating company. As of
December 31, 2014
, we had 36 employee members positioned within all of our functional areas. We believe this ownership model results in a shared sense of purpose with our clients and their advisers. We intend to continue fostering a culture of ownership through our equity incentive plans, which are designed to align our team’s interests with those of our stockholders and clients. We believe this culture of ownership contributes to our team orientation and connection with clients.
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•
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Unwavering Focus on Classic Value Investing.
We view our unwavering focus on long-term classic value investment excellence to be the key driver of our business success.
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•
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Capitalize on Growth Opportunities Created By Our Global Strategies.
Among both institutional and retail investors industry-wide, over the past few years, there have been increasing levels of investments in portfolios including non-U.S. equities. As of
December 31, 2014
, the total AUM in our Global Value strategies, International (ex-U.S.) Value strategies, Emerging Markets Focused Value strategy, and other non-U.S. strategies was $10.9 billion, or 39.4% of our overall AUM. Our global capability provides opportunity for all of our strategies around the world.
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•
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Apply Our Proven Process to Introduce New Strategies.
We anticipate continuing to offer new investment strategies over time, on a measured basis, consistent with our past practice, utilizing our proven investment process.
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•
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Work with Our Strong Consultant Relationships.
We believe that we have built strong relationships with the leading investment consulting firms who advise potential institutional clients. Historically, new accounts sourced through consultant-led searches have been a large driver of our inflows and are expected to be a major component of our future inflows.
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•
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Expand Our Non-U.S. Client Base.
In recent years, we have increased our efforts to develop our non-U.S. client base. Through our strong relationships with global consultants, we have been able to accelerate the development of our relationships with their non-U.S. branches. Over time, we aim to achieve growth of this client base through these relationships and by directly calling on the world’s largest institutional investors. We have also sought to expand our non-U.S. base through our relationships with non-U.S. mutual funds and other investment fund advisers. During 2010, we opened a representative office in Melbourne, Australia to more effectively service existing clients and develop new relationships in the geographic area. To date, these marketing efforts have resulted in client relationships in more than fifteen non-U.S. countries, such as the United Kingdom, Australia and Canada. As of
December 31, 2014
, we managed $8.2 billion in separate accounts, commingled funds and sub-advised funds on behalf of non-U.S. clients.
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•
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Provide Access To Our Strategies Through a Range of Investment Vehicles.
Our clients access our investment strategies through a range of investment vehicles, including separately managed accounts, mutual funds that we sub-advise, and certain private placement vehicles and offshore funds that we offer to institutional investors. During the year ended December 31, 2014, we launched three SEC-registered Pzena mutual funds for which we act as investment adviser in an effort to expand the access investors have to our strategies. For more information concerning access to our strategies, see “Our Client Relationships and Distribution Approach” below.
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•
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Employ Global Team to Deliver Content-Based Information to Clients and Prospects.
Our marketing and client service team is currently a team of 18 people, including marketing and client service professionals, associates, and support staff. The marketing and client services professionals are focused geographically, along with one individual focused on the sub-advisory and investment-only defined contribution distribution channels. In addition to our representative office in Melbourne, Australia, we have two professionals dedicated to business development and client service throughout Europe and the Middle East.
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Strategy
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AUM
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||
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(in billions)
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U.S. Strategies
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Large Cap Focused Value
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$
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5.8
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Large Cap Expanded Value
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5.7
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Focused Value
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1.8
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Small Cap Focused Value
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1.3
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Mid Cap Expanded Value
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1.3
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Mid Cap Focused Value
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0.5
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Other U.S. Strategies
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0.4
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Non-U.S. Strategies
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Global Focused Value
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4.1
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International (ex-U.S.) Expanded Value
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2.4
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Global Expanded Value
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1.5
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Emerging Markets Focused Value
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1.1
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International (ex-U.S.) Focused Value
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1.0
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European Focused Value
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0.7
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Other Non-U.S. Strategies
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0.1
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Total
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$
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27.7
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•
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identifying and marketing to prospective institutional clients;
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•
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responding to requests for investment management proposals; and
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•
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developing and maintaining relationships with independent consultants.
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•
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the performance of our investment strategies;
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•
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our clients’ perceptions of our drive, focus and alignment of our interests with theirs;
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•
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the quality of the service we provide to our clients and the duration of our relationships with them;
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•
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our brand recognition and reputation within the investing community;
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•
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the range of strategies and investment vehicles we offer; and
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•
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the level of advisory fees we charge for our investment management services.
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ITEM 1A.
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RISK FACTORS
|
•
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Poor performance of our strategies
: Poor performance of our investment strategies may result in decreased market value of AUM. In addition, underperformance could impact our ability to maintain our existing client base and develop new relationships, both of which could negatively impact AUM.
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•
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Poor market environment
: We could expect our business to generate lower revenue in a depressed equities market or general economic downturn. Any decline in the market value of securities held in client portfolios due to such adverse conditions could lower AUM significantly and lead to a decrease in revenue. Investor sentiment in a poor equities market environment could also decrease inflows and increase outflows from our investment strategies in favor of investments perceived as more attractive.
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•
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Geo-political conditions
: As a company that invests in both U.S. and non-U.S. markets, and with a global client base, our business is subject to changing conditions in the global financial markets, and may also be affected by worldwide political, social and economic conditions, any of which could negatively impact AUM.
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•
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Termination of significant relationships
: Our clients can generally terminate our advisory agreements or reduce assets under management upon short notice and for any reason. Investors in the pooled funds that we manage may also
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•
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Defined benefit plans are declining
: Defined benefit plans are declining as corporate plan sponsors are decreasing their liabilities and shifting employee enrollment to defined contribution plans. We currently do not have significant exposure to the defined contribution market but are actively trying to gain new assets in this market, including through our recently launched Pzena Mutual Funds. There is no guarantee that we will be successful in increasing our penetration of the defined contribution market, which could impact our AUM.
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•
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Intermediary dependence
: New accounts sourced through consultant-led searches have been a large driver of our inflows in the past, and are expected to be a major component of our inflows going forward. We have also established relationships with certain mutual fund providers who have offered us opportunities to access certain market segments through sub-investment advisory roles. Our intermediaries routinely review and evaluate our organization and the services we offer, and poor evaluations may result in client outflows and impact our ability to attract new assets through such intermediaries.
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•
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Passive strategies have grown substantially in relation to active strategies
: During the past decade, investors have generally exhibited a preference for passive investment products, such as index and exchange traded funds, over active strategies managed by asset managers such as ourselves. If this market preference continues our AUM may be negatively impacted.
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ITEM 1B.
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UNRESOLVED STAFF COMMENTS
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ITEM 2.
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PROPERTIES
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ITEM 3.
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LEGAL PROCEEDINGS
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ITEM 4.
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MINE SAFETY DISCLOSURES
|
ITEM 5.
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MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
|
|
2014
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|
2013
|
||||||||||||||||||||
Quarter
|
|
High
|
|
Low
|
|
Dividends
Declared Per
Share
|
|
High
|
|
Low
|
|
Dividends
Declared Per
Share
|
||||||||||||
Quarter Ended March 31
|
|
$
|
12.73
|
|
|
$
|
9.89
|
|
|
$
|
0.26
|
|
|
$
|
7.19
|
|
|
$
|
5.22
|
|
|
$
|
0.16
|
|
Quarter Ended June 30
|
|
$
|
12.68
|
|
|
$
|
9.02
|
|
|
$
|
0.03
|
|
|
$
|
7.05
|
|
|
$
|
5.43
|
|
|
$
|
0.03
|
|
Quarter Ended September 30
|
|
$
|
11.30
|
|
|
$
|
9.04
|
|
|
$
|
0.03
|
|
|
$
|
7.49
|
|
|
$
|
6.34
|
|
|
$
|
0.03
|
|
Quarter Ended December 31
|
|
$
|
10.58
|
|
|
$
|
8.32
|
|
|
$
|
0.03
|
|
|
$
|
11.87
|
|
|
$
|
6.44
|
|
|
$
|
0.03
|
|
|
|
Period Ending
|
||||||||||||||||||||||
Index
|
|
2009
|
|
2010
|
|
2011
|
|
2012
|
|
2013
|
|
2014
|
||||||||||||
Pzena Investment Management, Inc.
|
|
$
|
100.00
|
|
|
$
|
93.26
|
|
|
$
|
56.15
|
|
|
$
|
73.40
|
|
|
$
|
165.23
|
|
|
$
|
136.70
|
|
SNL Asset Manager Index*
|
|
$
|
100.00
|
|
|
$
|
115.11
|
|
|
$
|
99.57
|
|
|
$
|
127.75
|
|
|
$
|
195.30
|
|
|
$
|
206.04
|
|
S&P 500 Index
|
|
$
|
100.00
|
|
|
$
|
115.06
|
|
|
$
|
117.49
|
|
|
$
|
136.30
|
|
|
$
|
180.42
|
|
|
$
|
204.81
|
|
*
|
The SNL Asset Manager Index is comprised of the securities of 41 publicly traded asset management companies.
|
Period
|
|
(a) Total Number of
Shares of Class A
Common
Stock Purchased
|
|
(b) Average
Price Paid per
Share of Class A
Common
Stock
|
|
(c) Total Number
of Shares
Purchased as Part of
Publicly
Announced Plans
or Programs
(1)
|
|
(d) Approximate
Dollar Value of
Shares that May Yet
Be Purchased Under
the Plans or
Programs
(2)
|
||||||
|
|
|
|
|
|
|
|
(in millions)
|
||||||
October 1, 2014 through
October 31, 2014
|
|
85,716
|
|
|
$
|
9.62
|
|
|
85,716
|
|
|
$
|
20.6
|
|
November 1, 2014 through
November 30, 2014
|
|
160,472
|
|
|
9.56
|
|
|
160,472
|
|
|
19.0
|
|
||
December 1, 2014 through
December 31, 2014
|
|
17,872
|
|
|
8.85
|
|
|
17,872
|
|
|
18.5
|
|
||
Total
|
|
264,060
|
|
|
$
|
9.53
|
|
|
264,060
|
|
|
$
|
18.5
|
|
|
(1)
|
Our share repurchase program was announced on April 24, 2012. The Board of Directors authorized us to repurchase an aggregate of $10.0 million of our outstanding Class A common stock, and Class B units of the operating company, on the open market and in private transactions in accordance with applicable securities laws. On February 5, 2014, the Board of Directors authorized us to repurchase an additional $20.0 million of our outstanding Class A common stock and Class B units of the operating company. The timing, number, and value of common shares and units repurchased are subject to our discretion. Our share repurchase program is not subject to an expiration date and may be suspended, discontinued, or modified at any time, or for any reason.
|
(2)
|
The dollar amount in the column entitled "Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs," reflects the remainder of the program and also reflects the repurchase of 38,364 of the operating company's Class B units during December 2014 for an average price of $9.39 per unit. Class B units are repurchased at fair value determined by reference to our Class A common stock on the date of the transaction since Class B units are exchangeable for shares of our Class A common stock on a one-for-one basis.
|
ITEM 6.
|
SELECTED FINANCIAL DATA
|
|
For the Year Ended December 31,
|
||||||||||||||||||
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
||||||||||
|
(in thousands, except share and per share amounts)
|
||||||||||||||||||
Statements of Operations Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
REVENUE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Management Fees
|
$
|
108,675
|
|
|
$
|
91,866
|
|
|
$
|
75,980
|
|
|
$
|
79,230
|
|
|
$
|
77,025
|
|
Performance Fees
|
3,836
|
|
|
3,903
|
|
|
300
|
|
|
3,815
|
|
|
500
|
|
|||||
Total Revenue
|
112,511
|
|
|
95,769
|
|
|
76,280
|
|
|
83,045
|
|
|
77,525
|
|
|||||
EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash Compensation and Benefits
|
32,396
|
|
|
31,374
|
|
|
28,690
|
|
|
29,518
|
|
|
25,895
|
|
|||||
Other Non-Cash Compensation
|
8,877
|
|
|
5,448
|
|
|
3,065
|
|
|
5,047
|
|
|
3,653
|
|
|||||
Total Compensation and Benefits Expense
|
41,273
|
|
|
36,822
|
|
|
31,755
|
|
|
34,565
|
|
|
29,548
|
|
|||||
General and Administrative Expenses
|
10,285
|
|
|
8,099
|
|
|
7,346
|
|
|
10,626
|
|
|
8,007
|
|
|||||
TOTAL OPERATING EXPENSES
|
51,558
|
|
|
44,921
|
|
|
39,101
|
|
|
45,191
|
|
|
37,555
|
|
|||||
Operating Income
|
60,953
|
|
|
50,848
|
|
|
37,179
|
|
|
37,854
|
|
|
39,970
|
|
|||||
Other Income/(Expense)
|
(4,036
|
)
|
|
(1,821
|
)
|
|
(863
|
)
|
|
(1,466
|
)
|
|
(2,744
|
)
|
|||||
INCOME BEFORE INCOME TAXES
|
56,917
|
|
|
49,027
|
|
|
36,316
|
|
|
36,388
|
|
|
37,226
|
|
|||||
Income Tax Provision/(Benefit)
|
1,883
|
|
|
589
|
|
|
1,911
|
|
|
3,145
|
|
|
741
|
|
|||||
Consolidated Net Income
|
55,034
|
|
|
48,438
|
|
|
34,405
|
|
|
33,243
|
|
|
36,485
|
|
|||||
Less: Net Income Attributable to
Non-Controlling Interests.
|
46,934
|
|
|
41,768
|
|
|
30,565
|
|
|
29,861
|
|
|
32,674
|
|
|||||
NET INCOME/(LOSS) Attributable to Pzena
Investment Management, Inc.
|
$
|
8,100
|
|
|
$
|
6,670
|
|
|
$
|
3,840
|
|
|
$
|
3,382
|
|
|
$
|
3,811
|
|
Per Share Data
(1)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net Income/(Loss) for Basic Earnings per Share
|
$
|
8,100
|
|
|
$
|
6,670
|
|
|
$
|
3,840
|
|
|
$
|
3,382
|
|
|
$
|
3,811
|
|
Basic Earnings/(Loss) per Share
|
$
|
0.64
|
|
|
$
|
0.56
|
|
|
$
|
0.36
|
|
|
$
|
0.34
|
|
|
$
|
0.41
|
|
Basic Weighted Average Shares Outstanding
|
12,628,676
|
|
|
11,990,757
|
|
|
10,787,540
|
|
|
9,972,978
|
|
|
9,186,520
|
|
|||||
Net Income/(Loss) for Diluted Earnings per Share
|
$
|
35,685
|
|
|
$
|
30,317
|
|
|
$
|
20,821
|
|
|
$
|
20,631
|
|
|
$
|
22,419
|
|
Diluted Earnings/(Loss) per Share
|
$
|
0.53
|
|
|
$
|
0.45
|
|
|
$
|
0.32
|
|
|
$
|
0.32
|
|
|
$
|
0.34
|
|
Diluted Weighted Average Shares Outstanding
|
67,797,524
|
|
|
66,759,840
|
|
|
65,491,273
|
|
|
65,095,797
|
|
|
64,985,753
|
|
|||||
Cash Dividends Declared Per Share
|
$
|
0.35
|
|
|
$
|
0.25
|
|
|
$
|
0.28
|
|
|
$
|
0.12
|
|
|
$
|
0.24
|
|
(1)
|
The operating company issues Class B units that have non-forfeitable dividend rights. Under the “two-class method”, these units are considered participating securities and are required to be included in the computation of diluted earnings per share.
|
|
For the Year Ended December 31,
|
||||||||||||||||||
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Statements of Financial Condition Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Cash and Cash Equivalents
|
$
|
39,109
|
|
|
$
|
33,878
|
|
|
$
|
32,645
|
|
|
$
|
35,083
|
|
|
$
|
16,381
|
|
TOTAL ASSETS
|
111,886
|
|
|
80,213
|
|
|
64,679
|
|
|
66,678
|
|
|
48,402
|
|
|||||
TOTAL LIABILITIES
|
26,853
|
|
|
21,664
|
|
|
16,713
|
|
|
20,454
|
|
|
14,606
|
|
|||||
Non-Controlling Interests
|
66,632
|
|
|
42,187
|
|
|
33,397
|
|
|
32,287
|
|
|
23,224
|
|
|||||
EQUITY
|
18,401
|
|
|
16,362
|
|
|
14,569
|
|
|
13,937
|
|
|
10,572
|
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
For the Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
|
(in thousands, except share and per share amounts)
|
||||||||||
GAAP Net Income
|
$
|
8,100
|
|
|
$
|
6,670
|
|
|
$
|
3,840
|
|
Net Effect of Non-Recurring Lease Expenses
|
35
|
|
|
—
|
|
|
—
|
|
|||
Net Effect of Tax Receivable Agreement
|
(1,392
|
)
|
|
(989
|
)
|
|
(421
|
)
|
|||
Non-GAAP Net Income
|
$
|
6,743
|
|
|
$
|
5,681
|
|
|
$
|
3,419
|
|
GAAP Income Attributable to Non-Controlling Interest of Pzena Investment
Management, LLC
|
$
|
47,026
|
|
|
$
|
40,533
|
|
|
$
|
29,711
|
|
Effect of Non-Recurring Lease Expenses
|
313
|
|
|
—
|
|
|
—
|
|
|||
Non-GAAP Income Attributable to Non-Controlling Interest of Pzena Investment
Management, LLC
|
47,339
|
|
|
40,533
|
|
|
29,711
|
|
|||
Less: Assumed Corporate Income Taxes
|
19,570
|
|
|
16,886
|
|
|
12,730
|
|
|||
Assumed After-Tax Income of Pzena Investment Management, LLC
|
27,769
|
|
|
23,647
|
|
|
16,981
|
|
|||
Non-GAAP Net Income of Pzena Investment Management, Inc.
|
6,743
|
|
|
5,681
|
|
|
3,419
|
|
|||
Non-GAAP Diluted Net Income
|
$
|
34,512
|
|
|
$
|
29,328
|
|
|
$
|
20,400
|
|
Non-GAAP Diluted Earnings Per Share Attributable to Pzena Investment
Management, Inc. Common Stockholders:
|
|
|
|
|
|
|
|
|
|||
Non-GAAP Net Income for Diluted Earnings per Share
|
$
|
34,512
|
|
|
$
|
29,328
|
|
|
$
|
20,400
|
|
Non-GAAP Diluted Earnings Per Share
|
$
|
0.51
|
|
|
$
|
0.44
|
|
|
$
|
0.31
|
|
Non-GAAP Diluted Weighted-Average Shares Outstanding
|
67,797,524
|
|
|
66,759,840
|
|
|
65,491,273
|
|
•
|
our ability to educate our target clients about our classic value investment strategies and provide them with exceptional client service;
|
•
|
the relative investment performance of our investment strategies, as compared to competing products and market indices;
|
•
|
competitive conditions in the investment management and broader financial services sectors;
|
•
|
general economic conditions;
|
•
|
investor sentiment and confidence; and
|
•
|
our decision to close strategies when we deem it to be in the best interests of our clients.
|
•
|
changes in AUM due to appreciation or depreciation of our investment portfolios, and the levels of the contribution and withdrawal of assets by new and existing clients;
|
•
|
distribution of AUM among our investment strategies, which have differing fee schedules;
|
•
|
distribution of AUM between institutional accounts and retail accounts, for which we generally earn lower overall advisory fees; and
|
•
|
the level of our performance with respect to accounts on which we are paid performance fees.
|
•
|
variations in the level of total compensation expense due to, among other things, bonuses, awards of equity to our employees and employee members of our operating company, changes in our employee count and mix, and competitive factors; and
|
•
|
general and administrative expenses, such as rent, professional service fees and data-related costs, incurred, as necessary, to run our business.
|
|
|
Period Ended December 31, 2014
1
|
||||||||||
Investment Strategy (Inception Date)
|
|
Since
Inception
|
|
5 Years
|
|
3 Years
|
|
1 Year
|
||||
Large Cap Focused Value (October 2000)
|
|
|
|
|
|
|
|
|
|
|
|
|
Annualized Gross Returns
|
|
7.4
|
%
|
|
15.1
|
%
|
|
22.4
|
%
|
|
11.6
|
%
|
Annualized Net Returns
|
|
6.9
|
%
|
|
14.6
|
%
|
|
21.9
|
%
|
|
11.2
|
%
|
Russell 1000
®
Value Index
|
|
6.7
|
%
|
|
15.4
|
%
|
|
20.9
|
%
|
|
13.5
|
%
|
Large Cap Expanded Value (July 2012)
|
|
|
|
|
|
|
|
|
|
|
|
|
Annualized Gross Returns
|
|
24.3
|
%
|
|
N/A
|
|
|
N/A
|
|
|
12.3
|
%
|
Annualized Net Returns
|
|
24.1
|
%
|
|
N/A
|
|
|
N/A
|
|
|
12.1
|
%
|
Russell 1000
®
Value Index
|
|
21.5
|
%
|
|
N/A
|
|
|
N/A
|
|
|
13.5
|
%
|
Global Focused Value (January 2004)
|
|
|
|
|
|
|
|
|
|
|
|
|
Annualized Gross Returns
|
|
5.7
|
%
|
|
10.9
|
%
|
|
19.7
|
%
|
|
0.3
|
%
|
Annualized Net Returns
|
|
4.9
|
%
|
|
10.1
|
%
|
|
18.9
|
%
|
|
(0.3
|
)%
|
MSCI
®
World Index – Net/U.S.$
2
|
|
6.8
|
%
|
|
10.2
|
%
|
|
15.5
|
%
|
|
4.9
|
%
|
International (ex-U.S.) Expanded Value (November 2008)
|
|
|
|
|
|
|
|
|
|
|
|
|
Annualized Gross Returns
|
|
13.4
|
%
|
|
8.0
|
%
|
|
15.2
|
%
|
|
(7.0
|
)%
|
Annualized Net Returns
|
|
13.1
|
%
|
|
7.7
|
%
|
|
14.8
|
%
|
|
(7.3
|
)%
|
MSCI
®
EAFE Index – Net/U.S.$
2
|
|
9.1
|
%
|
|
5.3
|
%
|
|
11.1
|
%
|
|
(4.9
|
)%
|
Focused Value (January 1996)
|
|
|
|
|
|
|
|
|
|
|
|
|
Annualized Gross Returns
|
|
11.4
|
%
|
|
16.0
|
%
|
|
23.3
|
%
|
|
11.4
|
%
|
Annualized Net Returns
|
|
10.6
|
%
|
|
15.3
|
%
|
|
22.5
|
%
|
|
10.7
|
%
|
Russell 1000
®
Value Index
|
|
9.2
|
%
|
|
15.4
|
%
|
|
20.9
|
%
|
|
13.5
|
%
|
Global Expanded Value (January 2010)
|
|
|
|
|
|
|
|
|
||||
Annualized Gross Returns
|
|
10.5
|
%
|
|
10.5
|
%
|
|
18.4
|
%
|
|
1.7
|
%
|
Annualized Net Returns
|
|
10.2
|
%
|
|
10.2
|
%
|
|
18.0
|
%
|
|
1.4
|
%
|
MSCI
®
World
Index – Net/U.S.$
2
|
|
10.2
|
%
|
|
10.2
|
%
|
|
15.5
|
%
|
|
4.9
|
%
|
Small Cap Focused Value (January 1996)
|
|
|
|
|
|
|
|
|
|
|
|
|
Annualized Gross Returns
|
|
14.6
|
%
|
|
17.4
|
%
|
|
24.1
|
%
|
|
10.9
|
%
|
Annualized Net Returns
|
|
13.3
|
%
|
|
16.3
|
%
|
|
22.9
|
%
|
|
9.7
|
%
|
Russell 2000
®
Value Index
|
|
10.2
|
%
|
|
14.3
|
%
|
|
18.3
|
%
|
|
4.2
|
%
|
Mid Cap Expanded Value (April 2014)
|
|
|
|
|
|
|
|
|
||||
Annualized Gross Returns
|
|
5.2
|
%
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
Annualized Net Returns
|
|
5.1
|
%
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
Russell Mid Cap® Value Index
|
|
9.1
|
%
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
Emerging Markets Focused Value (January 2008)
|
|
|
|
|
|
|
|
|
|
|
|
|
Annualized Gross Returns
|
|
1.2
|
%
|
|
2.3
|
%
|
|
7.2
|
%
|
|
(9.9
|
)%
|
Annualized Net Returns
|
|
0.3
|
%
|
|
1.7
|
%
|
|
6.6
|
%
|
|
(10.5
|
)%
|
MSCI
®
Emerging Markets
Index – Net/U.S.$
2
|
|
(1.3
|
)%
|
|
1.8
|
%
|
|
4.0
|
%
|
|
(2.2
|
)%
|
International (ex-US) Focused Value (January 2004)
|
|
|
|
|
|
|
|
|
||||
Annualized Gross Returns
|
|
6.6
|
%
|
|
8.7
|
%
|
|
15.7
|
%
|
|
(8.8
|
)%
|
Annualized Net Returns
|
|
5.7
|
%
|
|
7.9
|
%
|
|
14.9
|
%
|
|
(9.4
|
)%
|
MSCI EAFE® Index – Net/U.S.$2
|
|
5.8
|
%
|
|
5.3
|
%
|
|
11.1
|
%
|
|
(4.9
|
)%
|
European Focused Value (August 2008)
|
|
|
|
|
|
|
|
|
|
|
|
|
Annualized Gross Returns
|
|
5.5
|
%
|
|
8.1
|
%
|
|
17.3
|
%
|
|
(10.8
|
)%
|
Annualized Net Returns
|
|
5.2
|
%
|
|
7.7
|
%
|
|
16.9
|
%
|
|
(11.1
|
)%
|
MSCI
®
Europe Index – Net/U.S.$
2
|
|
1.6
|
%
|
|
5.3
|
%
|
|
11.9
|
%
|
|
(6.2
|
)%
|
Mid Cap Focused Value (September 1998)
|
|
|
|
|
|
|
|
|
|
|
|
|
Annualized Gross Returns
|
|
13.6
|
%
|
|
18.6
|
%
|
|
23.2
|
%
|
|
10.2
|
%
|
Annualized Net Returns
|
|
12.8
|
%
|
|
17.7
|
%
|
|
22.4
|
%
|
|
9.5
|
%
|
Russell Mid Cap
®
Value Index
|
|
11.1
|
%
|
|
17.4
|
%
|
|
22.0
|
%
|
|
14.7
|
%
|
|
(1)
|
The historical returns of these investment strategies are not necessarily indicative of their future performance, or the future performance of any of our other current or future investment strategies.
|
(2)
|
Net of applicable withholding taxes and presented in U.S.$.
|
|
|
For the Year Ended December 31,
|
||||||||||
Assets Under Management
|
|
2014
|
|
2013
|
|
2012
|
||||||
|
|
(in billions)
|
||||||||||
Institutional Accounts
|
|
|
|
|
|
|
|
|
|
|||
Assets
|
|
|
|
|
|
|
|
|
|
|||
Beginning of Period
|
|
$
|
15.4
|
|
|
$
|
11.2
|
|
|
$
|
11.3
|
|
Inflows
|
|
2.8
|
|
|
1.9
|
|
|
0.7
|
|
|||
Outflows
|
|
(3.0
|
)
|
|
(2.0
|
)
|
|
(2.8
|
)
|
|||
Net Flows
|
|
(0.2
|
)
|
|
(0.1
|
)
|
|
(2.1
|
)
|
|||
Market Appreciation/(Depreciation)
|
|
0.4
|
|
|
4.3
|
|
|
2.0
|
|
|||
End of Period
|
|
$
|
15.6
|
|
|
$
|
15.4
|
|
|
$
|
11.2
|
|
Retail Accounts
|
|
|
|
|
|
|
|
|
|
|||
Assets
|
|
|
|
|
|
|
|
|
|
|||
Beginning of Period Assets
|
|
$
|
9.6
|
|
|
$
|
5.9
|
|
|
$
|
2.2
|
|
Inflows
|
|
3.3
|
|
|
2.3
|
|
|
4.0
|
|
|||
Outflows
|
|
(1.7
|
)
|
|
(1.2
|
)
|
|
(1.0
|
)
|
|||
Net Flows
|
|
1.6
|
|
|
1.1
|
|
|
3.0
|
|
|||
Market Appreciation/(Depreciation)
|
|
0.9
|
|
|
2.6
|
|
|
0.7
|
|
|||
End of Period
|
|
$
|
12.1
|
|
|
$
|
9.6
|
|
|
$
|
5.9
|
|
Total
|
|
|
|
|
|
|
|
|
|
|||
Assets
|
|
|
|
|
|
|
|
|
|
|||
Beginning of Period
|
|
$
|
25.0
|
|
|
$
|
17.1
|
|
|
$
|
13.5
|
|
Inflows
|
|
6.1
|
|
|
4.2
|
|
|
4.7
|
|
|||
Outflows
|
|
(4.7
|
)
|
|
(3.2
|
)
|
|
(3.8
|
)
|
|||
Net Flows
|
|
1.4
|
|
|
1.0
|
|
|
0.9
|
|
|||
Market Appreciation/(Depreciation)
|
|
1.3
|
|
|
6.9
|
|
|
2.7
|
|
|||
End of Period
|
|
$
|
27.7
|
|
|
$
|
25.0
|
|
|
$
|
17.1
|
|
|
|
AUM at December 31,
|
||||||||||
Investment Strategy
|
|
2014
|
|
2013
|
|
2012
|
||||||
|
|
(in billions)
|
||||||||||
U.S. Value Strategies
1
|
|
$
|
16.8
|
|
|
$
|
15.1
|
|
|
$
|
10.9
|
|
Global Value Strategies
1
|
|
5.6
|
|
|
6.3
|
|
|
4.1
|
|
|||
Non-U.S. Value Strategies
|
|
5.3
|
|
|
3.6
|
|
|
2.1
|
|
|||
Total
|
|
$
|
27.7
|
|
|
$
|
25.0
|
|
|
$
|
17.1
|
|
|
|
For the Year Ended December 31,
|
||||||||||
Revenue
|
|
2014
|
|
2013
|
|
2012
|
||||||
|
|
(in thousands)
|
||||||||||
Institutional Accounts
|
|
$
|
82,805
|
|
|
$
|
75,783
|
|
|
$
|
64,919
|
|
Retail Accounts
|
|
29,706
|
|
|
19,986
|
|
|
11,361
|
|
|||
Total
|
|
$
|
112,511
|
|
|
$
|
95,769
|
|
|
$
|
76,280
|
|
|
|
For the Year Ended December 31,
|
||||||||||
|
|
2014
|
|
2013
|
|
2012
|
||||||
|
|
(in thousands)
|
||||||||||
Cash Compensation and Other Benefits
|
|
$
|
32,396
|
|
|
$
|
31,374
|
|
|
$
|
28,690
|
|
Other Non-Cash Compensation
|
|
8,877
|
|
|
5,448
|
|
|
3,065
|
|
|||
Total Compensation and Benefits Expense
|
|
41,273
|
|
|
36,822
|
|
|
31,755
|
|
|||
General and Administrative Expense
|
|
10,285
|
|
|
8,099
|
|
|
7,346
|
|
|||
Total Operating Expenses
|
|
$
|
51,558
|
|
|
$
|
44,921
|
|
|
$
|
39,101
|
|
|
|
For the Year Ended December 31,
|
||||||||||
|
|
2014
|
|
2013
|
|
2012
|
||||||
|
|
(in thousands)
|
||||||||||
Income Before Income Taxes
|
|
$
|
56,917
|
|
|
$
|
49,027
|
|
|
$
|
36,316
|
|
Effect of Non-Recurring Lease Expenses
|
|
392
|
|
|
—
|
|
|
—
|
|
|||
Change in Liability to Selling and Converting Shareholders
|
|
4,168
|
|
|
4,468
|
|
|
2,647
|
|
|||
Non-GAAP Unincorporated Business Taxes
|
|
(2,966
|
)
|
|
(2,434
|
)
|
|
(2,420
|
)
|
|||
Non-GAAP Net Income Attributable to Non-Controlling Interests
|
|
(47,247
|
)
|
|
(41,768
|
)
|
|
(30,565
|
)
|
|||
Non-GAAP Income Before Corporate Taxes
|
|
$
|
11,264
|
|
|
$
|
9,293
|
|
|
$
|
5,978
|
|
Unincorporated Business Taxes
|
|
$
|
2,953
|
|
|
$
|
2,434
|
|
|
$
|
2,420
|
|
Add back: Effect of Non-Recurring Lease Expenses
|
|
13
|
|
|
—
|
|
|
—
|
|
|||
Non-GAAP Unincorporated Business Taxes
|
|
$
|
2,966
|
|
|
$
|
2,434
|
|
|
$
|
2,420
|
|
Net Income Attributable to Non-Controlling Interests
|
|
$
|
46,934
|
|
|
$
|
41,768
|
|
|
$
|
30,565
|
|
Add back: Effect of One-Time Adjustments
|
|
313
|
|
|
—
|
|
|
—
|
|
|||
Non-GAAP Net Income Attributable to Non-Controlling Interests
|
|
$
|
47,247
|
|
|
$
|
41,768
|
|
|
$
|
30,565
|
|
|
For the Year Ended December 31,
|
|||||||||||||||||||
|
2014
|
|
2013
|
|
2012
|
|||||||||||||||
|
Tax
|
|
% of Non-
GAAP
Pre-tax
Income
|
|
Tax
|
|
% of Non-
GAAP
Pre-tax
Income
|
|
Tax
|
|
% of Non-
GAAP
Pre-tax
Income
|
|||||||||
|
(in
thousands)
|
|
|
|
(in
thousands)
|
|
|
|
(in
thousands)
|
|
|
|||||||||
Federal Corporate Tax
|
$
|
3,830
|
|
|
34.0
|
%
|
|
$
|
3,159
|
|
|
34.0
|
%
|
|
$
|
2,032
|
|
|
34.0
|
%
|
State and Local Taxes, Net of Federal Benefit
|
827
|
|
|
7.3
|
%
|
|
716
|
|
|
7.7
|
%
|
|
529
|
|
|
8.9
|
%
|
|||
Prior Period and Other Adjustments
|
(136
|
)
|
|
(1.2
|
)%
|
|
(263
|
)
|
|
(2.8
|
)%
|
|
(2
|
)
|
|
(0.1
|
)%
|
|||
Non-GAAP Effective Taxes
|
$
|
4,521
|
|
|
40.1
|
%
|
|
$
|
3,612
|
|
|
38.9
|
%
|
|
$
|
2,559
|
|
|
42.8
|
%
|
|
|
Payments Due by Period
|
||||||||||||||||||
|
|
Total
|
|
Less Than
1 Year
|
|
1 – 3 Years
|
|
3 – 5 Years
|
|
More Than
5 Years
|
||||||||||
|
|
(in thousands)
|
||||||||||||||||||
Operating Lease Expenses, Net of Sublease Rental Income
|
|
$
|
23,207
|
|
|
$
|
3,414
|
|
|
$
|
3,959
|
|
|
$
|
5,938
|
|
|
$
|
9,896
|
|
Total
|
|
$
|
23,207
|
|
|
$
|
3,414
|
|
|
$
|
3,959
|
|
|
$
|
5,938
|
|
|
$
|
9,896
|
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
ITEM 9B.
|
OTHER INFORMATION
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
Name
|
|
Age
|
|
Position
|
Richard S. Pzena
|
|
56
|
|
Chairman, Chief Executive Officer, Co-Chief Investment Officer
|
John P. Goetz
|
|
57
|
|
President, Co-Chief Investment Officer, Director
|
William L. Lipsey
|
|
56
|
|
President, Head of Business Development and Client Service, Director
|
Gary J. Bachman
|
|
47
|
|
Chief Financial Officer
|
Michael D. Peterson
|
|
50
|
|
Executive Vice President
|
Steven M. Galbraith
|
|
52
|
|
Director
|
Joel M. Greenblatt
|
|
57
|
|
Director
|
Richard P. Meyerowich
|
|
72
|
|
Director
|
Charles D. Johnston
|
|
61
|
|
Director
|
•
|
The CEO is most familiar with the day to day operations of our Company and operating company.
|
•
|
The CEO is in the best position to bring matters before our Board of Directors and serve as its Chairman.
|
•
|
A combined CEO and Chairman role provides consistent leadership, stability and continuity for us.
|
•
|
Sarbanes-Oxley annual testing and audit — covering internal controls and financial reporting;
|
•
|
SSAE 16 — covering operational risks;
|
•
|
Compliance policies and procedures, including annual risk-based testing;
|
•
|
Ongoing compliance training; and
|
•
|
Disaster recovery procedures and annual testing.
|
•
|
reviewing the audit plans and findings of our independent registered public accounting firm and our internal audit and risk review staff, as well as the results of regulatory examinations, if any, and tracking management’s corrective action plans, where necessary;
|
•
|
reviewing our financial statements, including any significant financial items and/or changes in accounting policies, and/or internal control, with our senior management and independent registered public accounting firm;
|
•
|
reviewing our financial risk and control procedures, compliance programs and significant tax, legal and regulatory matters; and
|
•
|
having the sole discretion to annually appoint our independent registered public accounting firm, evaluate its independence and performance, and set clear hiring policies for employees or former employees of the independent registered public accounting firm.
|
•
|
reviewing and approving, or making recommendations to our Board of Directors with respect to, the compensation of our executive officers;
|
•
|
overseeing and administering, and making recommendations to our Board of Directors with respect to, our cash and equity incentive plans; and
|
•
|
reviewing and making recommendations to the Board of Directors with respect to director compensation.
|
•
|
identifying and recommending to our Board of Directors individuals qualified to serve as our directors and on committees of the Board of Directors;
|
•
|
advising the Board of Directors on Board composition, procedures and committees;
|
•
|
initiating and overseeing governance policies such as our Corporate Governance Guidelines, Code of Business Conduct and Ethics, and Code of Ethics for Senior Financial Officers; and
|
•
|
overseeing the evaluation of the Board and Company management.
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
(i)
|
Development of new leaders to provide succession options for the Executive Committee and other managerial responsibilities.
|
(ii)
|
Management of the overall business in a manner consistent with shareholder interests, including:
|
•
|
Managing the cost structure to maintain a margin of profitability consistent with leading asset management firms and the overall investment environment; and
|
•
|
Enhancing our overall growth through developing global capabilities and introducing new initiatives and products consistent with clients’ interests.
|
(iii)
|
Setting an example for our employees in business behavior at an exceptional ethical level.
|
(iv)
|
Enhancing our reputation and asset gathering capability, with existing and future clients, through quality interaction and communication.
|
(i)
|
Lead the investment team in a manner to promote excellent long term investment performance via superior investment research.
|
(ii)
|
Maintain a team-oriented culture that develops and retains the best investment talent.
|
(i)
|
Expand the business development team and exposure of the Pzena brand in the international marketplace.
|
(ii)
|
Lead the client team in a manner which promotes the Pzena brand in the broader institutional investment community and creates lasting client relationships, minimizes client attrition, and raises assets from new and existing clients.
|
(iii)
|
Develop a retail mutual fund business to expand the reach of our products and to grow assets under management.
|
(i)
|
Oversee our financial reporting process to achieve accurate and effective financial statements.
|
(ii)
|
Enhance our controllership and financial functions through exemplary leadership.
|
(i)
|
cash compensation, consisting of a base salary;
|
(ii)
|
annual cash bonuses;
|
(iii)
|
mandatory deferred compensation;
|
(iv)
|
equity-based compensation and related distributions of earnings of our operating company; and
|
(v)
|
perquisites.
|
(i)
|
Base Salary
. Consistent with industry practice, the base salaries for our named executive officers generally account for a relatively small portion of their overall compensation. Pursuant to their respective Executive Employment Agreements, as amended, and as further discussed below, Messrs. Pzena, Goetz and Lipsey are each entitled to receive a base salary which is determined annually by the Compensation Committee. For 2014, Messrs. Pzena, Goetz and Lipsey each received a base salary at the annual rate of $377,500, and a contribution of $22,500 by our Company to each of their respective 401(k) accounts.
|
(ii)
|
Cash Bonuses
. As further discussed below under “Executive Employment Agreements,” each of Messrs. Pzena, Goetz and Lipsey may be paid an annual bonus as determined by the Compensation Committee. In 2014, the Compensation Committee reviewed the aforementioned objectives for the named executive officers, both by individual position, and
|
(iii)
|
Mandatory Deferred Compensation
. The purpose of the Bonus Plan is to enable us to attract, retain, motivate and reward highly qualified individuals who provide services to us by, among other things: (a) providing for grants of bonus compensation; and (b) providing that a portion of the bonus awards made to certain highly compensated individuals, including the named executive officers, shall be deferred on a mandatory basis and shall vest, and become payable, over a four-year period. These amounts are reflected in the “All Other Compensation” column of the “Summary Compensation Table” below.
|
(iv)
|
Equity Based Compensation and Distribution of Earnings of Our Operating Company
. We have awarded many of our employees, including our named executive officers, ownership interests in our operating company. Historically, a significant amount of remuneration that our CEO, two Presidents, and Executive Vice President received from us consisted of cash distributions in proportion to their respective ownership interests of our operating company. These four executive officers have substantial ownership interests in our operating company. They receive distributions in respect of their membership units in the same amount, and at the same time as distributions are made on all other membership units, including Class A units, which we believe creates an alignment of their interests with those of our Class A stockholders. The amounts of these distributions are not shown in the Summary Compensation Table below because they arise out of their ownership interest in our operating company. At December 31, 2014, 2013 and 2012, our CEO, two Presidents and Executive Vice President and their related entities, owned approximately 55.8%, 57.7%, and 58.6%, respectively, of the economic interests in the operating company through their ownership of Class B units.
|
(v)
|
Perquisites
. We offer each of our employees, including each of the named executive officers, our investment management services without charging any advisory fees typically associated with these services if they place their funds with us; see “Item 13 — Certain Relationships and Related Transactions, and Director Independence — Other Related Party Transactions.” This benefit is provided at no incremental cost to us.
|
Name and Principal Position
|
|
Year
|
|
Salary($)
(1)
|
|
Bonus($)
(2)
|
|
Stock
Awards($)
(3)
|
|
Unit
Awards($)
(4)
|
|
All Other
Compensation($)
(5)
|
|
Total($)
|
|||||||||||||
Richard S. Pzena,
|
|
2014
|
|
$
|
377,500
|
|
|
$
|
1,353,046
|
|
|
—
|
|
|
—
|
|
|
$
|
641,197
|
|
|
|
$
|
2,371,743
|
|
||
Chief Executive Officer,
|
|
2013
|
|
277,500
|
|
|
1,143,757
|
|
|
—
|
|
|
—
|
|
|
435,004
|
|
|
|
1,856,261
|
|
||||||
Co-Chief Investment Officer
|
|
2012
|
|
277,500
|
|
|
1,034,903
|
|
|
—
|
|
|
—
|
|
|
362,436
|
|
|
|
1,674,839
|
|
||||||
Gary J. Bachman,
|
|
2014
|
|
$
|
325,000
|
|
|
$
|
182,500
|
|
|
—
|
|
|
—
|
|
|
$
|
17,521
|
|
|
|
$
|
525,021
|
|
||
Chief Financial Officer
(6)
|
|
2013
|
|
300,000
|
|
|
165,000
|
|
|
—
|
|
|
—
|
|
|
5,129
|
|
|
|
470,129
|
|
||||||
|
|
2012
|
|
85,385
|
|
|
150,000
|
|
|
$
|
233,096
|
|
|
—
|
|
|
—
|
|
|
|
468,481
|
|
|||||
John P. Goetz,
|
|
2014
|
|
$
|
377,500
|
|
|
$
|
1,370,000
|
|
|
—
|
|
|
—
|
|
|
$
|
652,500
|
|
|
|
$
|
2,400,000
|
|
||
President, Co-Chief
|
|
2013
|
|
277,500
|
|
|
1,170,000
|
|
|
—
|
|
|
—
|
|
|
452,500
|
|
|
|
1,900,000
|
|
||||||
Investment Officer
|
|
2012
|
|
277,500
|
|
|
1,080,000
|
|
|
—
|
|
|
—
|
|
|
392,500
|
|
|
|
1,750,000
|
|
||||||
William L. Lipsey,
|
|
2014
|
|
$
|
377,500
|
|
|
$
|
1,370,000
|
|
|
—
|
|
|
—
|
|
|
$
|
652,500
|
|
|
|
$
|
2,400,000
|
|
||
President, Marketing
|
|
2013
|
|
277,500
|
|
|
1,170,000
|
|
|
—
|
|
|
—
|
|
|
892,500
|
|
|
|
2,340,000
|
|
||||||
and Client Services
|
|
2012
|
|
277,500
|
|
|
1,140,000
|
|
|
—
|
|
|
—
|
|
|
432,500
|
|
|
|
1,850,000
|
|
||||||
Michael D. Peterson,
|
|
2014
|
|
$
|
377,500
|
|
|
$
|
730,002
|
|
|
—
|
|
|
$
|
399,998
|
|
|
$
|
492,500
|
|
|
|
$
|
2,000,000
|
|
|
Executive Vice President
|
|
2013
|
|
277,500
|
|
|
930,000
|
|
|
—
|
|
|
1,000,000
|
|
|
292,500
|
|
(8)
|
|
2,500,000
|
|
||||||
|
|
2012
|
|
277,500
|
|
|
1,080,000
|
|
|
—
|
|
|
3,000,000
|
|
|
392,500
|
|
(8)
|
|
4,750,000
|
|
||||||
Antonio DeSpirito, III,
|
|
2014
|
|
$
|
184,096
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
16,569
|
|
|
|
$
|
200,665
|
|
|||
Former Executive Vice
|
|
2013
|
|
277,500
|
|
|
$
|
990,000
|
|
|
—
|
|
|
—
|
|
|
332,500
|
|
|
|
1,600,000
|
|
|||||
President
(7)
|
|
2012
|
|
277,500
|
|
|
1,080,000
|
|
|
—
|
|
|
$
|
3,000,000
|
|
|
392,500
|
|
|
|
4,750,000
|
|
(1)
|
Amounts represent payments of salary made to the named executive officers pursuant to their respective employment agreements, with the exceptions of Messrs. Bachman, Peterson and DeSpirito with whom we have not entered into employment agreements. Mr. Bachman's 2012 and Mr. DeSpirito's 2014 amounts listed above represent actual amounts earned based on an annual rates of $300,000 and $377,500, respectively.
|
(2)
|
Amounts represent discretionary bonuses paid to the named executive officers as further discussed above under “Compensation Discussion and Analysis — Principal Components of Executive Compensation — Cash Bonuses.”
|
(3)
|
Amounts reflected represent the aggregate grant date fair value of restricted Class A common stock, calculated in accordance with the
Stock Compensation Topic
of the FASB ASC. For a discussion of the assumptions utilized in calculating grant date fair value, see Note 3 to our audited consolidated financial statements appearing elsewhere in this Annual Report.
|
(4)
|
Amounts reflected represent the aggregate grant date fair value of Class B units and unit based awards of our operating company, on the date of grant, calculated in accordance with the
Stock Compensation Topic
of the FASB ASC. In December 2014, we granted Delayed Exchange Class B units of the operating company to Mr. Peterson. These units vest immediately upon the date of grant and receive dividends, however they cannot be exchanged for shares of the Company's Class A common stock until seven years after the date of grant. They also do not carry any rights associated with the tax receivable agreement. In December 2013, and 2012 we granted phantom Class B units of the operating company under the 2006 Equity Incentive Plan to certain employee members including Messrs. DeSpirito and Peterson. Amounts reflected represent the aggregate grant date fair value of these phantom units, calculated in accordance with
the Stock Compensation Topic
of the FASB ASC. These units vest ratably over ten years, are subject to continued employment with us and are not entitled to receive dividends or dividend equivalents until vested. For a discussion of the assumptions utilized in calculating grant date fair value, see Note 3 to our audited consolidated financial statements appearing elsewhere in this Annual Report.
|
(5)
|
Includes 401(k) contributions plus deferred compensation (as further outlined in the "2014 Non-Qualified Deferred Compensation" section below) associated with the Bonus Plan. The Bonus Plan, pursuant to which employees whose compensation is in excess of $600,000 per year are required to defer a portion of their compensation in excess of this amount. Deferred amounts contributed by named executive officers may be invested, at the employee’s discretion, in certain investment options, including phantom Class B units, as designated by the Compensation Committee of the Company's Board of Directors. Amounts shown represent the compensation deferred. Pursuant to the plan, each deferred amount vests as follows: (i) 25% on the first
|
(6)
|
Mr. Bachman became our CFO on September 18, 2012.
|
(7)
|
Mr. DeSpirito ceased to serve as an Executive Vice President in June of 2014.
|
(8)
|
Mr. Peterson elected to receive his deferred compensation for 2013 and 2012 in the form of Phantom Class B units. These amounts include the value of 22,959 and 68,518 Phantom Class B units issued on December 31, 2013 and 2012 at $11.76 and $5.40 per unit, respectively.
|
Name
|
Grant Date
|
All Other Stock Awards:
Number of Shares of Stock
or Units (#)
|
Grant Date Fair Value
of Stock or
Unit Awards ($)
(1)
|
||
Michael D. Peterson
|
December 19, 2014
|
75,901
(2)
|
$
|
399,998
|
|
(1)
|
Amounts reflected represent the fair value of stock grants and unit-based awards, on the date of grant, calculated in accordance with the
Stock Compensation Topic
of the FASB ASC. For a discussion of the assumptions utilized, see Note 3 to our consolidated financial statements beginning on page F-13 of this Annual Report.
|
(2)
|
Represents Delayed Exchange Class B Units of the operating company awarded under the 2006 Equity Incentive Plan on December 19, 2014. These units vest immediately upon the date of grant and have the right to receive dividend payments, however they cannot be exchanged for shares of the Company's Class A common stock until seven years after the date of grant, and they do not carry rights associated with the tax receivable agreement. Although the units were granted pursuant to the 2006 Equity Incentive Plan, we do not consider these awards to have been made pursuant to an “equity incentive plan,” as such term is defined in the rules of the SEC, since vesting of the units is not tied to our Company’s or our stock’s performance.
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
|||||||||||||||||
Name
|
|
Grant Date
|
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
|
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
|
|
Option
Exercise
Price
($)
|
|
Option
Expiration
Date
|
|
Number of
Shares
or Units of
Stock That
Have Not
Vested (#)
|
|
Market
Value of
Shares or
Units of
Stock That
Have Not
Vested ($)
(1)
|
|||||||||
Richard S. Pzena
|
|
December 31,
2008 |
|
200,000
|
|
|
—
|
|
|
$
|
4.22
|
|
|
December 31,
2018 |
|
—
|
|
|
|
—
|
|
|
|
Gary J. Bachman
|
|
September 18,
2012 |
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
18,535
|
|
(2)
|
|
$
|
175,341
|
|
(3)
|
|
John P. Goetz
|
|
December 31,
2008 |
|
200,000
|
|
|
—
|
|
|
4.22
|
|
|
December 31,
2018 |
|
—
|
|
|
|
—
|
|
|
||
William L. Lipsey
|
|
December 31,
2008 |
|
200,000
|
|
|
—
|
|
|
4.22
|
|
|
December 31,
2018 |
|
—
|
|
|
|
—
|
|
|
||
Michael D. Peterson
|
|
December 31,
2011 |
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
20,210
|
|
(4)(5)
|
|
191,187
|
|
|
||
|
|
December 20,
2012 |
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
623,377
|
|
(6)
|
|
5,897,146
|
|
(7)
|
||
|
|
December 31,
2012 |
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
34,258
|
|
(4)(8)
|
|
324,081
|
|
|
||
|
|
December 19,
2013 |
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
105,883
|
|
(9)
|
|
1,001,653
|
|
(7)
|
||
|
|
December 31,
2013 |
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
17,219
|
|
(4)(10)
|
|
162,892
|
|
|
(1)
|
Based on the NYSE closing price of $9.46 for our Class A common stock on December 31, 2014. The fair value of Class B units of the operating company is determined by reference to the closing price of our Class A common stock, since Class B units are exchangeable for shares of our Class A common stock on a one-for-one basis.
|
(2)
|
Represents restricted shares of Class A common stock awarded under the 2007 Equity Incentive Plan on September 18, 2012.These shares will vest on January 1, 2015. The restricted shares are not entitled to receive dividends or dividend equivalents until vested. Although these shares were granted pursuant to the 2007 Equity Incentive Plan, we do not consider these awards to have been made pursuant to an “equity incentive plan,” as such term is defined in the rules of the SEC, since vesting of the shares is not tied to our Company’s or our stock’s performance.
|
(3)
|
The market value of these restricted Class A common stock, which are not entitled to receive dividends or dividend equivalents until vested, does not reflect the discount that would be applied to such restricted shares as they are not entitled to receive dividends.
|
(4)
|
Represents Phantom Class B units issued in connection with the named executive officer’s mandatory deferral of his restricted amount pursuant to the Bonus Plan, see “Item 12 — Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters — Bonus Plan — Mandatory Deferral of Restricted Amounts” for a discussion of restricted amounts. These Phantom Class B units vest ratably over four years. Upon vesting, each Phantom Class B unit becomes a Class B unit of the operating company.
|
(5)
|
Represents Phantom Class B units which will vest on December 31, 2015.
|
(6)
|
Represents Phantom Class B units of our operating company awarded under the PIM LLC 2006 Equity Incentive Plan. On December 20, 2012, a total of 779,221 Phantom Class B units were granted, which vest ratably over ten years, are subject to continued employment with us, and are not entitled to receive dividends or dividend equivalents until vested. As of December 20, 2014, a total of 155,844 Phantom Class B units vested and became Class B units of the operating company.
|
(7)
|
The market value of these Phantom Class B units, which are not entitled to receive dividends or dividend equivalents until vested, does not reflect the discount that would be applied to such phantom units, as they are not entitled to receive dividends.
|
(8)
|
Represents Phantom Class B units, of which 17,130 will vest on December 31, 2015; and the remaining 17,128 will vest on December 31, 2016.
|
(9)
|
Represents Phantom Class B units of our operating company awarded under the PIM LLC 2006 Equity Incentive Plan on December 19, 2013. These Phantom Class B units vest ratably over ten years, are subject to continued employment with us, and are not entitled to receive dividends or dividend equivalents until vested. On December 19, 2014, a total of 11,764 Phantom Class B units vested and became Class B units of the operating company.
|
(10)
|
Represents Phantom Class B units which vest ratably over four years. On December 31, 2014, a total of 5,740 Phantom Class B units vested and became Class B units of the operating company.
|
|
|
Option Awards
|
|
Stock and Unit Awards
|
||||||||
Name
|
|
Number of shares acquired on exercise (#)
|
|
Value realized on exercise ($)
|
|
Number of Shares or Units Acquired on Vesting (#)
|
Value Realized on
Vesting ($)
|
|||||
Gary J. Bachman
|
|
—
|
|
|
—
|
|
|
18,535
|
|
(1)
|
217,972
(2)
|
|
Antonio DeSpirito, III
|
|
68,346
|
|
(3)
|
752,489
|
|
(4)
|
—
|
|
|
—
|
|
Michael D. Peterson
|
|
—
|
|
|
—
|
|
|
11,907
|
|
(5)
|
112,640
(6)
|
|
|
|
—
|
|
|
—
|
|
|
20,207
|
|
(7)
|
191,158
(6)
|
|
|
|
—
|
|
|
—
|
|
|
17,130
|
|
(8)
|
162,050
(6)
|
|
|
|
—
|
|
|
—
|
|
|
5,740
|
|
(9)
|
54,300
(6)
|
|
|
|
—
|
|
|
—
|
|
|
77,922
|
|
(10)
|
731,688
(11)
|
|
|
|
—
|
|
|
—
|
|
|
11,764
|
|
(12)
|
110,464
(13)
|
|
|
|
—
|
|
|
—
|
|
|
75,901
|
|
(14)
|
399,998
(15)
|
|
(1)
|
Represents the second installment of shares vested underlying a grant of 44,484 restricted shares of Class A common stock made on September 18, 2012.
|
(2)
|
Based on the closing price of our Class A common stock of $11.76 per share on December 31, 2013.
|
(3)
|
Mr. DeSpirito exercised 250,000 options to purchase shares of Class A common stock of the Company that were awarded to him on December 21, 2009 at an exercise price of $8 per share. He acquired 68,346 net shares of Class A common stock as a result of the redemption of 181,654 Class A shares for the cashless exercise of the options.
|
(4)
|
Based on the closing price of our Class A common stock of $11.01 per share on June 18, 2014, the date on which the options were exercised.
|
(5)
|
Represents Phantom Class B units that vested on December 31, 2014 and became Class B units of our operating company. The Phantom Class B units were issued in connection with the named executive officer’s mandatory deferral of his restricted amount for 2010, pursuant to the Bonus Plan.
|
(6)
|
Based on the closing price of our Class A common stock of $9.46 per share on December 31, 2014. The value realized on vesting for Class B units of the operating company is determined by reference to the closing price of our Class A common stock since Class B units are exchangeable for shares of our Class A common stock on a one-for-one basis.
|
(7)
|
Represents Phantom Class B units that vested on December 31, 2014 and became Class B units of our operating company. The Phantom Class B units were issued in connection with the named executive officer’s mandatory deferral of his restricted amount for 2011, pursuant to the Bonus Plan.
|
(8)
|
Represents Phantom Class B units that vested on December 31, 2014 and became Class B units of our operating company. The Phantom Class B units were issued in connection with the named executive officer’s mandatory deferral of his restricted amount for 2012, pursuant to the Bonus Plan.
|
(9)
|
Represents Phantom Class B units that vested on December 31, 2014 and became Class B units of our operating company. The Phantom Class B units were issued in connection with the named executive officer’s mandatory deferral of his restricted amount for 2013, pursuant to the Bonus Plan.
|
(10)
|
Represents the second installment of Phantom Class B units that vested on December 20, 2014, underlying a grant of 779,221 Phantom Class B units of our operating company awarded under the PIM LLC 2006 Equity Incentive Plan on December 20, 2012, and which have become Class B units of the operating company.
|
(11)
|
Based on the closing price of our Class A common stock of $9.39 per share on December 19, 2014, the last available closing price prior to vesting. The value realized on vesting for Class B units of the operating company is determined by reference to the closing price of our Class A common stock since Class B units are exchangeable for shares of our Class A common stock on a one-for-one basis.
|
(12)
|
Represents the first installment of Phantom Class B units that vested on December 19, 2014, underlying a grant of 117,647 Phantom Class B units of our operating company awarded under the PIM LLC 2006 Equity Incentive Plan on December 19, 2013 that have become Class B units of the operating company.
|
(13)
|
Based on the closing price of our Class A common stock of $9.39 per share on December 19, 2014. The value realized on vesting for Class B units of the operating company is determined by reference to the closing price of our Class A common stock since Class B units are exchangeable for shares of our Class A common stock on a one-for-one basis.
|
(14)
|
Represents Delayed Exchange Class B units of our operating company awarded under the PIM LLC 2006 Equity Incentive Plan. On December 19, 2014, a total of 75,901 Delayed Exchange Class B units that vest immediately upon the date of grant and that have the right to receive dividend payments when granted, however, cannot be exchanged for shares of the Company's Class A common stock until seven years after the date of grant, and do not carry rights associated with the tax receivable agreement.
|
(15)
|
Based on a price of $5.27 per unit on December 19, 2014. The value realized on vesting for Delayed Exchange Class B units of the operating company is determined by reference to the closing price of our Class A common stock since Class B units are exchangeable for shares of our Class A common stock on a one-for-one basis net of the effects of the seven year liquidity limitation and tax receivable agreement benefit exclusion.
|
Name
|
|
Executive
Contributions
for Year Ended
December 31, 2014
($)
(1)(2)
|
|
Aggregate Earnings
for Year Ended
December 31, 2014
($)
(3)
|
|
Aggregate
Withdrawals/
Distributions
($)
|
|
Aggregate Balance
at Year Ended
December 31, 2014
($)
(4)
|
||||||||
Richard S. Pzena
|
|
$
|
618,697
|
|
|
$
|
82,471
|
|
|
$
|
441,970
|
|
|
$
|
1,315,779
|
|
John P. Goetz
|
|
630,000
|
|
|
31,387
|
|
|
423,566
|
|
|
1,264,292
|
|
||||
William L. Lipsey
|
|
630,000
|
|
|
68,370
|
|
|
468,373
|
|
|
1,557,392
|
|
||||
Antonio DeSpirito, III.
(5)
|
|
—
|
|
|
(796
|
)
|
|
272,590
|
|
|
—
|
|
||||
Michael D. Peterson
|
|
470,000
|
|
|
(508,564
|
)
|
|
696,674
|
|
|
1,562,988
|
|
|
(1)
|
On January 1, 2007, we instituted the Bonus Plan, pursuant to which employees who earn in excess of $600,000 per year in compensation are required to defer a portion of their compensation in excess of this amount. Deferred amounts contributed by named executive officers may be invested, at the employee's discretion, in certain investment options as designated by the Compensation Committee of the Company's Board of Directors. See “Item 12 — Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters — Bonus Plan.” The amounts in this column reflect the deferred portion of our named executive officer’s compensation.
|
(2)
|
All amounts reported in this column are included in the “All Other Compensation” column for 2014 of the Summary Compensation Table above.
|
(3)
|
Amounts reflect earnings on the total value of non-qualified deferred compensation.
|
(4)
|
Includes amounts contributed in previous years, plus or less any gains or losses experienced on such previous contributions, less any withdrawals and distributions.
|
(5)
|
As a result of the termination of his employment with us during 2014, Mr. DeSpirito, forfeited a total of 5,953 Phantom Class B units of our operating company, and approximately $1.0 million in investments deferred pursuant to the Bonus Plan.
|
Name
|
|
Stock
Awards ($)
(1)
|
|
Total ($)
|
||||
Steven M. Galbraith
|
|
$
|
75,000
|
|
(2)
|
$
|
75,000
|
|
Joel M. Greenblatt
|
|
75,000
|
|
(3)
|
75,000
|
|
||
Richard P. Meyerowich
|
|
80,000
|
|
(4)
|
80,000
|
|
||
Charles D. Johnston
|
|
63,288
|
|
(5)
|
63,288
|
|
(1)
|
These deferred stock units were valued at $11.76 each, the closing price of our Class A common stock on December 31, 2013. Each deferred stock unit is the economic equivalent of one share of our Class A common stock. The shares of Phantom Stock become payable in a single distribution in the form of shares of our Class A common stock, at such time as elected by the non-employee director when the deferral was made.
|
(2)
|
On January 1, 2014, Mr. Galbraith, a non-employee director and chairman of the Compensation Committee, was awarded 6,377 deferred stock units in connection with his 2014 compensation. As of December 31, 2014, Mr. Galbraith held 61,164 deferred stock units.
|
(3)
|
On January 1, 2014, Mr. Greenblatt, a non-employee director and chairman of the Nominating and Corporate Governance Committee, was awarded 6,377 deferred stock units in connection with hi
s 2014 compensation. As of December 31, 2014, Mr. Greenblatt held 60,174 deferred stock units.
|
(4)
|
On January 1, 2014, Mr. Meyerowich, a non-employee director and chairman of the Audit Committee, was awarded 6,802 deferred stock units in connection with his 2014 compensation. As of December 31, 2014, Mr. Meyerowich held 62,592 deferred stock units.
|
(5)
|
On February 5, 2014, Mr. Charles Johnston, a non-employee director was appointed as a member of the Board of Directors and was awarded 6,266 deferred stock units in connection with his 2014 compensation. As of December 31, 2014, Mr. Johnston held 6,459 deferred stock units.
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
•
|
each of our named executive officers;
|
•
|
each of our directors;
|
•
|
all of our directors and executive officers as a group; and
|
•
|
each person or group of affiliated persons known to us to beneficially own more than 5% of our Class A common stock or Class B common stock.
|
|
|
Class A Shares
Beneficially Owned
(1)
|
|
Class B Shares
Beneficially Owned
(1)
|
|
Percent of
Combined
Voting
Power
(1)
|
||||||||||||
Name of Beneficial Owner
|
|
Number of
Shares
|
|
Percent
(2)
|
|
Number of
Shares
|
|
Percent
(3)
|
|
|||||||||
Richard S. Pzena
|
|
4,206
|
|
(4)
|
|
*
|
|
|
24,328,620
|
|
(5)
|
|
45.7
|
|
|
43.6
|
|
|
Gary J. Bachman
|
|
44,484
|
|
|
|
*
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
John P. Goetz
|
|
—
|
|
|
|
—
|
|
|
5,751,755
|
|
(5)(6)
|
|
10.8
|
|
|
9.9
|
|
|
William L. Lipsey
|
|
—
|
|
|
|
—
|
|
|
5,262,910
|
|
(5)
|
|
9.9
|
|
|
9.4
|
|
|
Michael D. Peterson
|
|
420,000
|
|
(7)
|
|
3.2
|
|
|
2,124,463
|
|
(5)
|
|
4.0
|
|
|
3.8
|
|
|
Steven M. Galbraith
|
|
89,192
|
|
(8)
|
|
*
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
Joel M. Greenblatt
|
|
87,013
|
|
(9)
|
|
*
|
|
|
247,708
|
|
(10)
|
|
*
|
|
|
*
|
|
|
Richard P. Meyerowich
|
|
89,826
|
|
(11)
|
|
*
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
Charles D. Johnston
|
|
28,979
|
|
(12)
|
|
*
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
All executive officers and directors as a group (10 persons)
|
|
763,700
|
|
(13)
|
|
5.9
|
|
|
37,715,456
|
|
(14)
|
|
70.6
|
|
|
67.4
|
|
(15)
|
A. Rama Krishna
(16)
18 Sidney Lanier Lane
Greenwich, CT 06831
|
|
—
|
|
|
|
—
|
|
|
4,556,539
|
|
(5)
|
|
8.6
|
|
|
8.2
|
|
|
Cacti Asset Management, LLC
(17)
6355 Peachtree Road, Suite 101
Atlanta, GA 30319
|
|
716,650
|
|
|
|
5.5
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
Punch & Associates Investment
Management, Inc.
(19)
3601 West 76
th
Street, Suite 225
Edina, Minnesota 55435
|
|
1,658,668
|
|
|
|
12.8
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
*
|
Less than 1%
|
(1)
|
Each share of our Class A common stock is entitled to one vote per share and each share of our Class B common stock is entitled to five votes per share, for so long as the number of shares of our Class B common stock outstanding constitutes at least 20% of the total number of shares of our common stock outstanding.
|
(2)
|
Based on 13,002,267 shares of Class A common stock outstanding as of March 9, 2015.
|
(3)
|
Based on 53,257,891 shares of Class B common stock outstanding as of March 9, 2015.
|
(4)
|
Includes 4,100 shares of our Class A common stock held by Mr. Pzena's spouse. Mr. Pzena disclaims beneficial ownership of such interests.
|
(5)
|
Includes the number of shares of our Class B common stock listed below that, with the exception of those held by Mr. Krishna, are directly held by certain trusts established for estate planning purposes by the named executive officers below, as well as Class B common stock held by Mr. Pzena's spouse. In the case of certain trusts established by Mr. Pzena, Mr. Pzena may be deemed to beneficially own the shares directly held by these trusts because he may be considered to share dispositive power over securities held by these trusts, along with their respective trustees, pursuant to the terms of the applicable trust agreements. With the exception of a trust for which Mr. Peterson is a trustee and which owns 35,000 shares of Class B common stock, each of the named executive officers listed below disclaims beneficial ownership of the number of shares of Class B common stock and the corresponding Class B Units (including the shares of Class A common stock underlying these Class B Units) held by the applicable trusts, and in the case of Mr. Pzena, additionally those held by his spouse.
|
Name of Beneficial Owner
|
|
Number of Shares of Class B Common Stock Held by Trust(s)
|
Number of Shares of Class B Common Stock Otherwise Held Indirectly
|
Richard S. Pzena
|
|
6,258,600
|
42,399 (held by spouse)
|
John P. Goetz
|
|
708,970
|
|
William L. Lipsey
|
|
1,271,420
|
|
Michael D. Peterson
|
|
70,000
|
|
A. Rama Krishna
|
|
625,500
|
|
(6)
|
Includes options to purchase the number of Class B units set forth below opposite the named executive officer:
|
Named Executive Officer
|
|
Options to Acquire Class B Units
|
John P. Goetz
|
|
200,000
|
(8)
|
Includes 65,732 shares of Phantom Stock (inclusive of additional Phantom Stock issued in connection with dividend payments made thereon), each share of which is the economic equivalent of one share of our Class A common stock. The shares of Phantom Stock become payable in a single distribution of an equal number of shares of Class A common stock at such time as elected by each non-employee director at the time such deferral was elected pursuant to Section 3.4 of the Director Plan.
|
(9)
|
Includes 64,553 shares of Phantom Stock (inclusive of additional Phantom Stock issued in connection with dividend payments made thereon), each share of which is the economic equivalent of one share of our Class A common stock. The shares of Phantom Stock become payable in a single distribution of an equal number of shares of Class A common stock at such time as elected by each non-employee director at the time such deferral was elected pursuant to Section 3.4 of the Director Plan.
|
(10)
|
Includes 82,200 shares of Class B common stock held directly by family members of Mr. Greenblatt. Mr. Greenblatt disclaims beneficial ownership of all shares of Class B common stock directly held by his family members.
|
(11)
|
Includes 67,366 shares of Phantom Stock (inclusive of additional Phantom Stock issued in connection with dividend payments made thereon), each share of which is the economic equivalent of one share of our Class A common stock. The shares of Phantom Stock become payable in a single distribution of an equal number of shares of Class A common stock at such time as elected by each non-employee director at the time such deferral was elected pursuant to Section 3.4 of the Director Plan.
|
(12)
|
Includes 8,979 shares of Phantom Stock (inclusive of additional Phantom Stock issued in connection with dividend payments made thereon), each share of which is the economic equivalent of one share of our Class A common stock. The shares of Phantom Stock become payable in a single distribution of an equal number of shares of Class A common stock at such time as elected by each non-employee director at the time such deferral was elected pursuant to Section 3.4 of the Director Plan.
|
(14)
|
Includes options to purchase an aggregate of 200,000 membership units in our operating company that are currently exercisable and which, upon exercise, will entitled the holders to purchase the same number of shares of our Class B common stock. As indicated in the foregoing footnotes, also includes shares of Class B common stock held by estate planning vehicles and family members of the executive officers and directors as to which certain beneficial ownership is disclaimed.
|
(15)
|
Excludes an aggregate of 206,630 shares of Phantom Stock, the terms of which are described in footnotes 8, 9, 11 and 12 above.
|
(16)
|
The number of Class A common stock owned is based on information provided by our transfer agent, American Stock Transfer & Trust Company, and is as of March 9, 2015.
|
(17)
|
The number of shares owned is based on information included in the Form 13G/A.7 filed by Cacti Asset Management, LLC (“Cacti”), and its related persons and entities, with the SEC on January 2, 2015. According to the Form 13G/A, Cacti has sole dispositive power over 716,650 shares of our Class A common stock, shared dispositive power over zero shares of our Class A common stock, sole voting power of over 716,650 shares of our Class A common stock and shared voting power over zero shares of our Class A common stock.
|
(18)
|
The number of shares owned is based on information included in the Form 13G/A.4 filed by Punch & Associates Investment Management, Inc. (“Punch & Associates”), with the SEC on February 2, 2015. According to the Form 13G/A, Punch & Associates has sole dispositive power over 1,658,668 shares of our Class A common stock, shared dispositive power over zero shares of our Class A common stock, sole voting power of over 1,658,668 shares of our Class A common stock and shared voting power over zero shares of our Class A common stock.
|
Plan Category
|
|
Number of Securities
To Be Issued Upon
Exercise of
Outstanding Options,
Warrants and Rights
|
|
Weighted Average
Exercise Price of
Outstanding Options,
Warrants and Rights
|
|
Number of Securities
Remaining Available
For Future Issuance
Under Equity
Compensation Plans
(Excluding Securities
Reflected In
Column (a))
|
|||||
|
|
(a)
|
|
(b)
|
|
(c)
|
|||||
Equity Compensation Plans Approved By Security Holders:
|
|
|
|
|
|
|
|
|
|
|
|
Pzena Investment Management, LLC
2006 Equity Incentive Plan
(1)
|
|
2,402,532
|
|
|
$
|
6.83
|
|
|
9,932,873
|
|
(2)
|
Pzena Investment Management, Inc.
2007 Equity Incentive Plan
|
|
711,750
|
|
|
8.00
|
|
|
5,630,155
|
|
|
|
Pzena Investment Management, LLC Amended and Restated Bonus Plan
|
|
—
|
|
|
—
|
|
|
9,932,873
|
|
(3)
|
|
Equity Compensation Plans Not Approved By Security Holders
(4)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
Total
|
|
3,114,282
|
|
|
7.10
|
|
|
15,563,028
|
|
|
(1)
|
We will seek approval of the December 2, 2014 amendment to the PIM LLC 2006 Equity Incentive Plan by our shareholders at our May 14, 2015 Annual Meeting of Stockholders.
|
•
|
providing for grants of bonus compensation to eligible employees and members of our operating company;
|
•
|
providing that a portion of the bonus awards made to certain highly compensated individuals will be deferred on a mandatory basis under the Bonus Plan, and will vest, and become payable, over a four-year period; and
|
•
|
permitting members of Pzena Investment Management, LLC to elect to receive a portion of their bonus compensation that is mandatorily deferred in the form of restricted Phantom Class B units of Pzena Investment Management, LLC, or to invest it in certain investment strategies.
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
•
|
materially and adversely affect the rights of a Class B member in a manner that discriminates against that Class B member vis-à-vis other Class B members, or increase the capital contributions obligations of a Class B member, without the consent of the affected Class B member;
|
•
|
modify or amend the non-competition, non-solicitation, confidentiality, or vesting and forfeiture provisions in a manner that is adverse to an employee member without either the employee member’s consent, or the approval of two-thirds in interest of the Class B members, so long as each adversely affected employee member receives at least 60 days prior notice thereof; or
|
•
|
modify or amend any provision of the agreement requiring approval of any specified group or sub-group of Class B members without obtaining the approval of that specified group or sub-group.
|
•
|
the holder will not transfer any shares of Class B common stock to any person unless the holder transfers an equal number of Class B units to the same person; and
|
•
|
in the event the holder transfers any Class B units to any person, the holder will transfer an equal number of shares of Class B common stock to the same person.
|
ITEM 14.
|
PRINCIPAL ACCOUNTANT FEES AND SERVICES
|
(1)
|
Total fees for KPMG LLP represent amounts billed during the periods listed above. Total KPMG fees accrued were $0.7 million and $0.6 million for the years ended 2014 and 2013, respectively.
|
ITEM 15.
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
1.
|
Financial Statements
|
Pzena Investment Management, Inc.
|
|
Page
|
|
||
Consolidated Statements of Fina
ncial Condition as of December 31, 2014 and 2013
|
|
|
|
||
Consolidated Statements of Change
s in Equity for the Years Ended December 31, 2014, 2013 and 2012
|
|
|
Consolidated Statement
s of Cash Flows for the Years Ended December 31, 2014, 2013 and 2012
|
|
|
|
2.
|
Financial Statement Schedules
|
3.
|
Exhibit List
|
Exhibit
|
|
Description of Exhibit
|
3.1
|
|
Amended and Restated Certificate of Incorporation of Pzena Investment Management, Inc., effective as of October 30, 2007
(1)
|
3.2
|
|
Amended and Restated Bylaws of Pzena Investment Management, Inc., effective as of
October 30, 2007
(1)
|
4.1
|
|
Form of Pzena Investment Management, Inc. Class A Common Stock Certificate
(2)
|
4.2
|
|
Form of Exchange Rights of Class B Members
(2)
|
4.3
|
|
Resale and Registration Rights Agreement, dated as of October 30, 2007, by and among Pzena Investment Management, Inc. and the Holders named on the signature pages thereto
(1)
|
4.4
|
|
Class B Stockholders’ Agreement, dated as of October 30, 2007, by and among Pzena Investment Management, Inc. and the Class B Stockholders named on the signature pages thereto
(1)
|
10.1
|
|
Amended and Restated Operating Agreement of Pzena Investment Management, LLC, dated as of October 30, 2007, by and among Pzena Investment Management, Inc. and the Class B Members named on the signature pages thereto
(1)
|
10.2
|
|
Tax Receivable Agreement, dated as of October 30, 2007, by and among Pzena Investment Management, Inc., Pzena Investment Management, LLC and the Continuing Members and Exiting Members named on the signature pages thereto
(1)
|
10.3
|
|
Pzena Investment Management, LLC Amended and Restated 2006 Equity Incentive Plan
(16)
|
10.4
|
|
Pzena Investment Management, LLC Amended and Restated Bonus Plan, as amended, dated as of October 21, 2008
(3)
|
10.5
|
|
Pzena Investment Management, Inc. 2007 Equity Incentive Plan, as amended, dated as of
May 19, 2009
(4)
|
10.6
|
|
Lease, dated as of February 4, 2003, between Magnolia Associates, Ltd. and Pzena Investment Management, LLC, and the amendments thereto dated as of March 31, 2005 and
October 31, 2006
(5)
|
Exhibit
|
|
Description of Exhibit
|
10.7
|
|
Agreement of Sublease, dated November 4, 2011, between Pzena Investment Management, LLC together, as Sublessor and Perimeter Internetworking Corp, as Sublessee
(6)
|
10.8
|
|
Executive Employment Agreement for Richard S. Pzena, dated as of October 30, 2007, by and among Pzena Investment Management, Inc., Pzena Investment Management, LLC and Richard S. Pzena
(1)
|
10.9
|
|
Executive Employment Agreement for John P. Goetz, dated as of October 30, 2007, by and among Pzena Investment Management, Inc., Pzena Investment Management, LLC and John P. Goetz
(1)
|
10.10
|
|
Amended and Restated Executive Employment Agreement for William L. Lipsey, dated as of October 30, 2007, by and among Pzena Investment Management, Inc., Pzena Investment Management, LLC and William L. Lipsey
(1)
|
10.11
|
|
Indemnification Agreement for Richard S. Pzena, dated as of October 30, 2007, by and among Pzena Investment Management, Inc. and Richard S. Pzena
(1)
|
10.12
|
|
Indemnification Agreement for Steven M. Galbraith, dated as of October 30, 2007, by and among Pzena Investment Management, Inc. and Steven M. Galbraith
(1)
|
10.13
|
|
Indemnification Agreement for Joel M. Greenblatt, dated as of October 30, 2007, by and among Pzena Investment Management, Inc. and Joel M. Greenblatt
(1)
|
10.14
|
|
Indemnification Agreement for Richard P. Meyerowich, dated as of October 30, 2007, by and among Pzena Investment Management, Inc. and Richard P. Meyerowich
(1)
|
10.15
|
|
Indemnification Agreement for Myron E. Ullman, III, dated as of October 30, 2007, by and among Pzena Investment Management, Inc. and Myron E. Ullman, III
(1)
|
10.16
|
|
Indemnification Agreement for Ronald W. Tysoe, dated as of December 11, 2008, by and among Pzena Investment Management, Inc. and Ronald W. Tysoe
(8)
|
10.17
|
|
Indemnification Agreement for John P. Goetz, dated as of May 17, 2011, by and among Pzena Investment Management, Inc. and John P. Goetz
(6)
|
10.18
|
|
Indemnification Agreement for William L. Lipsey, dated as of May 17, 2011, by and among Pzena Investment Management, Inc. and William L. Lipsey
(6)
|
10.19
|
|
Pzena Investment Management, Inc. Non-Employee Director Deferred Compensation Plan, dated as of July 21, 2009
(9)
|
10.20
|
|
Amendment, effective March 24, 2010, to Amended and Restated Operating Agreement of Pzena Investment Management, LLC, dated as of October 30, 2007, by and among Pzena Investment Management, Inc. as the Managing Member of Pzena Investment Management, LLC and those Class B members whose signatures are affixed thereto
(10)
|
10.21
|
|
Amendment, dated as of March 5, 2012, to Amended and Restated Operating Agreement of Pzena Investment Management, LLC, dated as of October 30, 2007, by and among Pzena Investment Management, Inc. as the Managing Member of Pzena Investment Management, LLC and those Class B members whose signatures are affixed thereto
(6)
|
10.22
|
|
Amendment to Executive Employment Agreement for Richard S. Pzena, dated as of November 1, 2012, by and among Pzena Investment Management, Inc., Pzena Investment Management, LLC, and Richard S. Pzena
(11)
|
10.23
|
|
Amendment to Executive Employment Agreement for John P. Goetz, dated as of November 1, 2012, by and among Pzena Investment Management, Inc., Pzena Investment Management, LLC, and John P. Goetz
(11)
|
10.24
|
|
Amendment to Amended and Restated Executive Employment Agreement for William L. Lipsey, dated as of November 1, 2012, by and among Pzena Investment Management, Inc., Pzena Investment Management, LLC, and William L. Lipsey
(11)
|
10.25
|
|
Amendment, dated as of November 12, 2012, to Tax Receivable Agreement, dated as of October 30, 2007, by and among Pzena Investment Management, Inc., Pzena Investment Management, LLC and the Continuing Members and Exiting Members named on the signature pages thereto
(12)
|
10.26
|
|
Indemnification Agreement for Charles D. Johnston, dated as of February 5, 2014, by and among Pzena Investment Management, Inc. and Charles D. Johnston
(13)
|
10.27
|
|
Lease, dated as of June 13, 2014, between Mutual of America Life Insurance Company, as Landlord and Pzena Investment management, LLC, as Tenant
(14)
|
10.28
|
|
Amendment No. 3 to Pzena Investment Management, LLC Amended and Restated Operating Agreement, dated November 1, 2014 (filed herewith)
|
10.29
|
|
Amendment to the Pzena Investment Management, LLC Amended and Restated 2006 Equity Incentive Plan, dated December 2, 2014 (filed herewith)
|
10.30
|
|
Amendment to the Pzena Investment Management, LLC Amended and Restated Bonus Plan, dated December 2, 2014 (filed herewith)
|
10.31
|
|
Form of Unit-Based Award Agreement for Phantom Class B Units (filed herewith)
|
10.32
|
|
Form of Class B Unit Agreement - Delayed Exchange (filed herewith)
|
Exhibit
|
|
Description of Exhibit
|
14.1
|
|
Code of Business Conduct and Ethics, effective as of October 25, 2007, amended as of January 16, 2009
(15)
|
14.2
|
|
Code of Ethics for Senior Financial Officers
(10)
|
21.1
|
|
List of Subsidiaries of Pzena Investment Management, Inc. (filed herewith)
|
23.1
|
|
Consent of KPMG LLP, Independent Registered Public Accounting Firm (filed herewith)
|
31.1
|
|
Certification of Chief Executive Officer pursuant to Exchange Act Rule 13a-14(a) (filed herewith)
|
31.2
|
|
Certification of Chief Financial Officer pursuant to Exchange Act Rule 13a-14(a) (filed herewith)
|
32.1
|
|
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith)
|
32.2
|
|
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith)
|
101
|
|
Materials from the Pzena Investment Management, Inc. Annual Report on Form 10-K for the year ended December 31, 2013, formatted in Extensible Business Reporting Language (XBRL):
(i) Consolidated Statements of Financial Condition, (ii) Consolidated Statements of Operations,
(iii) Consolidated Statement of Changes in Equity, (iv) Consolidated Statements of Cash Flows, and
(vi) related Unaudited Notes to the Consolidated Financial Statements, tagged in detail
(furnished herewith)
|
|
(1)
|
Previously filed as an exhibit to our quarterly report on Form 10-Q filed with the Securities and Exchange Commission on December 5, 2007 (SEC File No. 001-33761).
|
(2)
|
Previously filed as an exhibit to Amendment No. 4 of the Registration Statement on Form S-1 (No. 333-143660) of Pzena Investment Management, Inc., which was filed with the Securities and Exchange Commission on October 22, 2007.
|
(3)
|
Previously filed as an exhibit to our quarterly report on Form 10-Q filed with the Securities and Exchange Commission on November 13, 2008 (SEC File No. 001-33761).
|
(4)
|
Previously filed as an exhibit to our quarterly report on Form 10-Q filed with the Securities and Exchange Commission on August 10, 2009 (SEC File No. 001-33761).
|
(5)
|
Previously filed as an exhibit to Amendment No. 1 of the Registration Statement on Form S-1 (No. 333-143660) of Pzena Investment Management, Inc., which was filed with the Securities and Exchange Commission on July 10, 2007.
|
(6)
|
Previously filed as an exhibit to our annual report on Form 10-K filed with the Securities and Exchange Commission on March 14, 2012 (SEC File No. 001-33761).
|
(7)
|
Previously filed as an exhibit to our annual report on Form 10-K filed with the Securities and Exchange Commission on March 12, 2010 (SEC File No. 001-33761).
|
(8)
|
Previously filed as an exhibit to our current report on Form 8-K filed with the Securities and Exchange Commission on December 12, 2008 (SEC File No. 001-33761).
|
(9)
|
Previously filed as an exhibit to our quarterly report on Form 10-Q filed with the Securities and Exchange Commission on November 9, 2009 (SEC File No. 001-33761).
|
(10)
|
Previously filed as an exhibit to our quarterly report on Form 10-Q filed with the Securities and Exchange Commission on May 7, 2010 (SEC File No. 001-33761).
|
(11)
|
Previously filed as an exhibit to our current report on Form 8-K filed with the Securities and Exchange Commission on November 2, 2012 (SEC File No. 001-33761).
|
(12)
|
Previously filed as an exhibit to our annual report on Form 10-K filed with the Securities and Exchange Commission on March 13, 2013 (SEC File No. 001-33761).
|
(13)
|
Previously filed as an exhibit to our current report on Form 8-K filed with the Securities and Exchange Commission on January 30, 2014 (SEC File No. 001-33761).
|
(14)
|
Previously filed as an exhibit to our quarterly report on Form 10-Q filed with the Securities and Exchange Commission on August 7, 2014 (SEC File No. 001-33761).
|
(15)
|
Previously filed as an exhibit to our quarterly report on Form 10-Q filed with the Securities and Exchange Commission on May 11, 2009 (SEC File No. 001-33761).
|
(16)
|
Previously filed as an attachment to our definitive proxy statement on Schedule 14A filed with the Securities and Exchange Commission on April 17, 2013 (SEC File No. 001-33761).
|
|
By:
|
/s/ Richard S. Pzena
|
|
|
Name: Richard S. Pzena
Title: Chief Executive Officer
|
SIGNATURE
|
|
TITLE
|
|
DATE
|
|
|
|
|
|
/s/ Richard S. Pzena
|
|
Chairman of the Board and
Chief Executive Officer (principal executive officer)
|
|
March 13, 2015
|
Richard S. Pzena
|
|
|
||
/s/ Gary J. Bachman
|
|
Chief Financial Officer
(principal financial and accounting officer)
|
|
March 13, 2015
|
Gary J. Bachman
|
|
|
||
/s/ John P. Goetz
|
|
Director
|
|
March 13, 2015
|
John P. Goetz
|
|
|
||
/s/ William L. Lipsey
|
|
Director
|
|
March 13, 2015
|
William L. Lipsey
|
|
|
||
/s/ Steven M. Galbraith
|
|
Director
|
|
March 13, 2015
|
Steven M. Galbraith
|
|
|
||
/s/ Joel M. Greenblatt
|
|
Director
|
|
March 13, 2015
|
Joel M. Greenblatt
|
|
|
||
/s/ Richard P. Meyerowich
|
|
Director
|
|
March 13, 2015
|
Richard P. Meyerowich
|
|
|
||
/s/ Charles D. Johnston
|
|
Director
|
|
March 13, 2015
|
Charles D. Johnston
|
|
|
|
|
Page
|
Pzena Investment Management, Inc.
|
|
|
|
||
Consolidated Statements of Fina
ncial Condition as of December 31, 2014 and 2013
|
|
|
|
||
Consolidated Statements of Change
s in Equity for the Years Ended December 31, 2014, 2013 and 2012
|
|
|
Consolidated Statement
s of Cash Flows for the Years Ended December 31, 2014, 2013 and 2012
|
|
|
|
|
As of
|
||||||
|
December 31,
2014 |
|
December 31,
2013 |
||||
ASSETS
|
|
|
|
|
|
||
Cash and Cash Equivalents
|
$
|
39,109
|
|
|
$
|
33,878
|
|
Restricted Cash
|
2,810
|
|
|
316
|
|
||
Due from Broker
|
94
|
|
|
58
|
|
||
Advisory Fees Receivable
|
22,939
|
|
|
23,947
|
|
||
Investments
|
27,945
|
|
|
7,621
|
|
||
Receivable from Related Parties
|
107
|
|
|
119
|
|
||
Other Receivables
|
647
|
|
|
550
|
|
||
Prepaid Expenses and Other Assets
|
845
|
|
|
577
|
|
||
Deferred Tax Asset, Net of Valuation Allowance of $44,239 and $53,973, respectively
|
14,618
|
|
|
12,312
|
|
||
Property and Equipment, Net of Accumulated Depreciation of $3,072 and $ 2,850, respectively
|
2,772
|
|
|
835
|
|
||
TOTAL ASSETS
|
$
|
111,886
|
|
|
$
|
80,213
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
||
Liabilities:
|
|
|
|
|
|
||
Accounts Payable and Accrued Expenses
|
$
|
5,974
|
|
|
$
|
5,570
|
|
Due to Broker
|
698
|
|
|
5
|
|
||
Securities Sold Short, at Fair Value
|
1,572
|
|
|
—
|
|
||
Liability to Selling and Converting Shareholders
|
15,358
|
|
|
12,777
|
|
||
Lease Liability
|
354
|
|
|
778
|
|
||
Deferred Compensation Liability
|
2,211
|
|
|
2,339
|
|
||
Other Liabilities
|
686
|
|
|
195
|
|
||
TOTAL LIABILITIES
|
26,853
|
|
|
21,664
|
|
||
Equity:
|
|
|
|
|
|
||
Preferred Stock (Par Value $0.01; 200,000,000 Shares Authorized;
None Outstanding) |
—
|
|
|
—
|
|
||
Class A Common Stock (Par Value $0.01; 750,000,000
Shares Authorized; 13,044,719 and 12,158,057 Shares Issued and Outstanding in 2014 and 2013, respectively) |
130
|
|
|
121
|
|
||
Class B Common Stock (Par Value $0.000001; 750,000,000 Shares Authorized; 52,891,939 and 52,820,720 Shares Issued and Outstanding in 2014 and 2013 respectively)
|
—
|
|
|
—
|
|
||
Additional Paid-In Capital
|
8,007
|
|
|
9,750
|
|
||
Retained Earnings
|
10,264
|
|
|
6,491
|
|
||
Total Pzena Investment Management, Inc.'s Equity
|
18,401
|
|
|
16,362
|
|
||
Non-Controlling Interests
|
66,632
|
|
|
42,187
|
|
||
TOTAL EQUITY
|
85,033
|
|
|
58,549
|
|
||
TOTAL LIABILITIES AND EQUITY
|
$
|
111,886
|
|
|
$
|
80,213
|
|
|
For the Years Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
REVENUE
|
$
|
112,511
|
|
|
$
|
95,769
|
|
|
$
|
76,280
|
|
EXPENSES
|
|
|
|
|
|
|
|
|
|||
Compensation and Benefits Expense
|
41,273
|
|
|
36,822
|
|
|
31,755
|
|
|||
General and Administrative Expense
|
10,285
|
|
|
8,099
|
|
|
7,346
|
|
|||
TOTAL OPERATING EXPENSES
|
51,558
|
|
|
44,921
|
|
|
39,101
|
|
|||
Operating Income
|
60,953
|
|
|
50,848
|
|
|
37,179
|
|
|||
OTHER INCOME/(EXPENSE)
|
|
|
|
|
|
|
|
|
|||
Interest Income
|
71
|
|
|
112
|
|
|
200
|
|
|||
Interest Expense
|
(8
|
)
|
|
—
|
|
|
(30
|
)
|
|||
Dividend Income
|
337
|
|
|
211
|
|
|
148
|
|
|||
(Losses)/ Gains and Other Investment Income
|
(49
|
)
|
|
2,449
|
|
|
1,520
|
|
|||
Change in Liability to Selling and
Converting Shareholders |
(4,168
|
)
|
|
(4,468
|
)
|
|
(2,647
|
)
|
|||
Other Expense
|
(219
|
)
|
|
(125
|
)
|
|
(54
|
)
|
|||
Total Other Expense
|
(4,036
|
)
|
|
(1,821
|
)
|
|
(863
|
)
|
|||
Income Before Income Taxes
|
56,917
|
|
|
49,027
|
|
|
36,316
|
|
|||
Income Tax Expense
|
1,883
|
|
|
589
|
|
|
1,911
|
|
|||
Net Income
|
55,034
|
|
|
48,438
|
|
|
34,405
|
|
|||
Less: Net Income Attributable to
Non-Controlling Interests |
46,934
|
|
|
41,768
|
|
|
30,565
|
|
|||
Net Income Attributable to Pzena
Investment Management, Inc. |
$
|
8,100
|
|
|
$
|
6,670
|
|
|
$
|
3,840
|
|
Net Income for Basic Earnings per Share
|
$
|
8,100
|
|
|
$
|
6,670
|
|
|
$
|
3,840
|
|
Basic Earnings per Share
|
$
|
0.64
|
|
|
$
|
0.56
|
|
|
$
|
0.36
|
|
Basic Weighted Average Shares Outstanding
|
12,628,676
|
|
|
11,990,757
|
|
|
10,787,540
|
|
|||
Net Income for Diluted Earnings per Share
|
$
|
35,685
|
|
|
$
|
30,317
|
|
|
$
|
20,821
|
|
Diluted Earnings per Share
|
$
|
0.53
|
|
|
$
|
0.45
|
|
|
$
|
0.32
|
|
Diluted Weighted Average Shares Outstanding
(1)
|
67,797,524
|
|
|
66,759,840
|
|
|
65,491,273
|
|
|||
Cash Dividends per Share of Class A Common Stock
|
$
|
0.35
|
|
|
$
|
0.25
|
|
|
$
|
0.28
|
|
(1)
|
The Company issues restricted Class B units that have non-forfeitable dividend rights. Under the “two-class method,” these units are considered participating securities and are required to be included in the computation of diluted earnings per share.
|
|
Shares of
Class A
Common Stock
|
|
Shares of
Class B
Common Stock
|
|
Class A
Common Stock
|
|
Additional
Paid-In
Capital
|
|
Retained
Earnings
(Accumulated
Deficit)
|
|
Non-Controlling
Interests
|
|
Total
|
||||||||||||
Balance at December 31, 2011
|
10,575,089
|
|
|
53,967,555
|
|
|
$
|
105
|
|
|
$
|
12,000
|
|
|
$
|
1,832
|
|
|
$
|
32,287
|
|
|
$
|
46,224
|
|
Unit Conversion
|
722,521
|
|
|
(722,521
|
)
|
|
7
|
|
|
384
|
|
|
—
|
|
|
(355
|
)
|
|
36
|
|
|||||
Amortization of Non-Cash Compensation
|
—
|
|
|
199,177
|
|
|
—
|
|
|
279
|
|
|
—
|
|
|
1,384
|
|
|
1,663
|
|
|||||
Directors' Share Grants
|
—
|
|
|
—
|
|
|
—
|
|
|
58
|
|
|
—
|
|
|
279
|
|
|
337
|
|
|||||
Net Income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,840
|
|
|
30,565
|
|
|
34,405
|
|
|||||
Repurchase and Retirement of Class A Common Stock
|
(147,669
|
)
|
|
—
|
|
|
(1
|
)
|
|
(745
|
)
|
|
—
|
|
|
—
|
|
|
(746
|
)
|
|||||
Repurchase and Retirement of Class B Units
|
—
|
|
|
(36,158
|
)
|
|
—
|
|
|
(157
|
)
|
|
—
|
|
|
(33
|
)
|
|
(190
|
)
|
|||||
Options Exercised
|
—
|
|
|
74,271
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Repurchase and Retirement of Class B Unit Options
|
—
|
|
|
—
|
|
|
—
|
|
|
(54
|
)
|
|
—
|
|
|
(259
|
)
|
|
(313
|
)
|
|||||
Contributions from Non-Controlling Interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
69
|
|
|
69
|
|
|||||
Distributions to Non-Controlling Interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(30,540
|
)
|
|
(30,540
|
)
|
|||||
Class A Cash Dividends Declared and Paid ($0.28 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,979
|
)
|
|
—
|
|
|
(2,979
|
)
|
|||||
Balance at December 31, 2012
|
11,149,941
|
|
|
53,482,324
|
|
|
$
|
111
|
|
|
$
|
11,765
|
|
|
$
|
2,693
|
|
|
$
|
33,397
|
|
|
$
|
47,966
|
|
Unit Conversion
|
1,328,334
|
|
|
(1,328,334
|
)
|
|
13
|
|
|
786
|
|
|
—
|
|
|
(680
|
)
|
|
119
|
|
|||||
Amortization of Non-Cash Compensation
|
17,414
|
|
|
602,400
|
|
|
—
|
|
|
600
|
|
|
—
|
|
|
2,560
|
|
|
3,160
|
|
|||||
Directors' Share Grants
|
45,818
|
|
|
—
|
|
|
1
|
|
|
82
|
|
|
—
|
|
|
257
|
|
|
340
|
|
|||||
Net Income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,670
|
|
|
41,768
|
|
|
48,438
|
|
|||||
Options Exercised
|
—
|
|
|
421,173
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Repurchase and Retirement of Class A Common Stock
|
(383,450
|
)
|
|
—
|
|
|
(4
|
)
|
|
(2,410
|
)
|
|
—
|
|
|
—
|
|
|
(2,414
|
)
|
|||||
Repurchase and Retirement of Class B Units
|
—
|
|
|
(356,843
|
)
|
|
—
|
|
|
(699
|
)
|
|
—
|
|
|
(3,028
|
)
|
|
(3,727
|
)
|
|||||
Repurchase and Retirement of Class B Unit Options
|
—
|
|
|
—
|
|
|
—
|
|
|
(14
|
)
|
|
—
|
|
|
(57
|
)
|
|
(71
|
)
|
|||||
Contributions from Non-Controlling Interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
147
|
|
|
147
|
|
|||||
Distributions to Non-Controlling Interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(32,537
|
)
|
|
(32,537
|
)
|
|||||
Class A Cash Dividends Declared and Paid ($0.25 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,872
|
)
|
|
—
|
|
|
(2,872
|
)
|
|||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
(360
|
)
|
|
—
|
|
|
360
|
|
|
—
|
|
|||||
Balance at December 31, 2013
|
12,158,057
|
|
|
52,820,720
|
|
|
$
|
121
|
|
|
$
|
9,750
|
|
|
$
|
6,491
|
|
|
$
|
42,187
|
|
|
$
|
58,549
|
|
Unit Conversion
|
1,150,060
|
|
|
(1,150,060
|
)
|
|
11
|
|
|
1,038
|
|
|
—
|
|
|
(858
|
)
|
|
191
|
|
|||||
Amortization of Non-Cash Compensation
|
28,535
|
|
|
1,215,583
|
|
|
1
|
|
|
1,329
|
|
|
—
|
|
|
5,336
|
|
|
6,666
|
|
|||||
Directors' Share Grants
|
—
|
|
|
—
|
|
|
—
|
|
|
69
|
|
|
—
|
|
|
290
|
|
|
359
|
|
|||||
Net Income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,100
|
|
|
46,934
|
|
|
55,034
|
|
|||||
Options Exercised
|
68,346
|
|
|
95,199
|
|
|
1
|
|
|
37
|
|
|
—
|
|
|
(38
|
)
|
|
—
|
|
|||||
Repurchase and Retirement of Class A Common Stock
|
(360,279
|
)
|
|
—
|
|
|
(4
|
)
|
|
(3,492
|
)
|
|
—
|
|
|
—
|
|
|
(3,496
|
)
|
|||||
Repurchase and Retirement of Class B Units
|
—
|
|
|
(89,503
|
)
|
|
—
|
|
|
(173
|
)
|
|
—
|
|
|
(728
|
)
|
|
(901
|
)
|
|||||
Contributions from Non-Controlling Interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,906
|
|
|
4,906
|
|
|||||
Distributions to Non-Controlling Interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(44,154
|
)
|
|
(44,154
|
)
|
|||||
Class A Cash Dividends Declared and Paid ($0.35 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,327
|
)
|
|
—
|
|
|
(4,327
|
)
|
|||||
Effect of Deconsolidation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(37
|
)
|
|
(37
|
)
|
|||||
Effect of Consolidation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,243
|
|
|
12,243
|
|
|||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
(551
|
)
|
|
—
|
|
|
551
|
|
|
—
|
|
|||||
Balance at December 31, 2014
|
13,044,719
|
|
|
52,891,939
|
|
|
130
|
|
|
8,007
|
|
|
10,264
|
|
|
66,632
|
|
|
85,033
|
|
|
For the Years Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
|||
Net Income
|
$
|
55,034
|
|
|
$
|
48,438
|
|
|
$
|
34,405
|
|
Adjustments to Reconcile Net Income to Cash Provided by Operating Activities:
|
|
|
|
|
|
|
|
|
|||
Depreciation
|
224
|
|
|
178
|
|
|
179
|
|
|||
Disposal of Fixed Assets
|
—
|
|
|
—
|
|
|
(55
|
)
|
|||
Non-Cash Compensation
|
8,877
|
|
|
5,523
|
|
|
2,990
|
|
|||
Directors' Share Grants
|
359
|
|
|
315
|
|
|
337
|
|
|||
Losses/ (Gains) and Other Investment Income
|
49
|
|
|
(2,449
|
)
|
|
(1,520
|
)
|
|||
Change in Liability to Selling and Converting Shareholders
|
4,168
|
|
|
4,468
|
|
|
2,647
|
|
|||
Deferred Income Taxes
|
(1,055
|
)
|
|
(1,849
|
)
|
|
(529
|
)
|
|||
Changes in Operating Assets and Liabilities:
|
|
|
|
|
|
|
|
|
|||
Advisory Fees Receivable
|
1,008
|
|
|
(9,321
|
)
|
|
63
|
|
|||
Due from Broker
|
(41
|
)
|
|
(36
|
)
|
|
435
|
|
|||
Restricted Cash
|
(2,494
|
)
|
|
714
|
|
|
—
|
|
|||
Prepaid Expenses and Other Assets
|
(357
|
)
|
|
(491
|
)
|
|
134
|
|
|||
Due to Broker
|
694
|
|
|
(18
|
)
|
|
23
|
|
|||
Subscriptions Receivable
|
7,000
|
|
|
—
|
|
|
—
|
|
|||
Accounts Payable, Accrued Expenses, and Other Liabilities
|
(1,660
|
)
|
|
(48
|
)
|
|
(2,981
|
)
|
|||
Tax Receivable Agreement Payments
|
(2,668
|
)
|
|
(2,024
|
)
|
|
(4,451
|
)
|
|||
Change in Lease Liability
|
(424
|
)
|
|
(425
|
)
|
|
(592
|
)
|
|||
Purchases of Investments
|
(58,874
|
)
|
|
(78,100
|
)
|
|
(74,140
|
)
|
|||
Proceeds from Sale of Investments
|
45,572
|
|
|
79,582
|
|
|
75,013
|
|
|||
Net Cash Provided by Operating Activities
|
55,412
|
|
|
44,457
|
|
|
31,958
|
|
|||
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|||
Purchases of Investments
|
(2,494
|
)
|
|
(1,558
|
)
|
|
(521
|
)
|
|||
Proceeds from Sale of Investments
|
2,043
|
|
|
78
|
|
|
544
|
|
|||
Payments to Related Parties
|
12
|
|
|
(36
|
)
|
|
(16
|
)
|
|||
Purchase of Property and Equipment
|
(2,161
|
)
|
|
(234
|
)
|
|
(74
|
)
|
|||
Net Cash Used in Investing Activities
|
(2,600
|
)
|
|
(1,750
|
)
|
|
(67
|
)
|
|||
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|||
Repurchase and Retirement of Class A Common Stock
|
(3,496
|
)
|
|
(2,414
|
)
|
|
(746
|
)
|
|||
Repurchase and Retirement of Class B Units
|
(901
|
)
|
|
(3,727
|
)
|
|
(190
|
)
|
|||
Repurchase and Retirement of Class B Unit Options
|
—
|
|
|
(71
|
)
|
|
(313
|
)
|
|||
Loan Proceeds
|
205
|
|
|
—
|
|
|
—
|
|
|||
Distributions to Non-Controlling Interests
|
(44,154
|
)
|
|
(32,537
|
)
|
|
(30,170
|
)
|
|||
Contributions from Non-Controlling Interests
|
4,906
|
|
|
147
|
|
|
69
|
|
|||
Dividends
|
(4,327
|
)
|
|
(2,872
|
)
|
|
(2,979
|
)
|
|||
Net Cash Used in Financing Activities
|
(47,767
|
)
|
|
(41,474
|
)
|
|
(34,329
|
)
|
|||
NET CHANGE IN CASH
|
$
|
5,045
|
|
|
$
|
1,233
|
|
|
$
|
(2,438
|
)
|
CASH AND CASH EQUIVALENTS — Beginning of Period
|
$
|
33,878
|
|
|
$
|
32,645
|
|
|
$
|
35,083
|
|
Effect of Consolidation/ (Deconsolidation) of Affiliates
|
186
|
|
|
—
|
|
|
—
|
|
|||
Net Change in Cash
|
5,045
|
|
|
1,233
|
|
|
(2,438
|
)
|
|||
CASH AND CASH EQUIVALENTS — End of Period
|
$
|
39,109
|
|
|
$
|
33,878
|
|
|
$
|
32,645
|
|
Supplementary Cash Flow Information:
|
|
|
|
|
|
|
|
|
|||
In-Kind Distribution to Non-Controlling Interests of Equity Securities, at Fair Value
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
370
|
|
Interest Paid
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
30
|
|
Income Taxes Paid
|
$
|
2,728
|
|
|
$
|
2,502
|
|
|
$
|
2,310
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||
|
(in thousands)
|
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|||
Equity Securities
|
$
|
23,036
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Investments in Mutual Funds
|
4,909
|
|
|
—
|
|
|
—
|
|
|||
Total Fair Value
|
$
|
27,945
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||
|
(in thousands)
|
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|||
Equity Securities
|
$
|
2,364
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Investments in Mutual Funds
|
5,257
|
|
|
—
|
|
|
—
|
|
|||
Total Fair Value
|
$
|
7,621
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
For the Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
|
(in thousands)
|
||||||||||
Cash Compensation and Other Benefits
|
$
|
32,396
|
|
|
$
|
31,374
|
|
|
$
|
28,690
|
|
Non-Cash Compensation
|
8,877
|
|
|
5,448
|
|
|
3,065
|
|
|||
Total Compensation and Benefits Expense
|
$
|
41,273
|
|
|
$
|
36,822
|
|
|
$
|
31,755
|
|
|
For the Year Ended December 31,
|
|||||||||||||||||||
|
2014
|
|
2013
|
|
2012
|
|||||||||||||||
|
Amount
|
|
Fair Value
(1)
|
|
Amount
|
|
Fair Value
(1)
|
|
Amount
|
|
Fair Value
(1)
|
|||||||||
Phantom Class B Units
(2)
|
102,110
|
|
|
$
|
7.62
|
|
|
805,879
|
|
|
$
|
8.50
|
|
|
4,103,896
|
|
|
$
|
3.85
|
|
Class B Units
|
32,479
|
|
|
$
|
11.76
|
|
|
82,491
|
|
|
$
|
9.17
|
|
|
124,718
|
|
|
$
|
4.85
|
|
Delayed Exchange Class B Units
(3)
|
662,832
|
|
|
$
|
5.27
|
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
Deferred Compensation Phantom Class B Units
|
22,959
|
|
|
$
|
11.76
|
|
|
68,518
|
|
|
$
|
5.40
|
|
|
80,831
|
|
|
$
|
4.33
|
|
Options to Purchase Class B Units
|
—
|
|
|
$
|
—
|
|
|
76,522
|
|
|
$
|
3.27
|
|
|
51,625
|
|
|
$
|
1.32
|
|
Restricted Shares of Class A Common Stock
|
—
|
|
|
$
|
—
|
|
|
100,000
|
|
|
$
|
4.41
|
|
|
44,484
|
|
|
$
|
5.24
|
|
(1)
|
Represents the weighted average grant date estimated fair value per share, unit, or option.
|
(2)
|
Represents phantom Class B units issued under the 2006 Equity Incentive Plan. These phantom units vest ratably over
ten
years and are not entitled to receive dividend or dividend equivalents until vested.
|
(3)
|
Represents Class B units issued under the 2006 Equity Incentive Plan. These units vest immediately upon grant, but may not be exchanged pursuant to the Amended and Restated Operating Agreement of the operating company until at least the seventh anniversary of the date of grant. These units are also not entitled to any benefits under the Tax Receivable Agreement between the Company and members of the operating company.
|
|
For the Year Ended December 31,
|
||||||
|
2014
|
|
2013
|
|
2012
|
||
Weighted Average Time Until Exercise
|
N/A
|
|
7 years
|
|
|
7 years
|
|
Volatility
|
N/A
|
|
42
|
%
|
|
43
|
%
|
Risk-Free Rate
|
N/A
|
|
2.33
|
%
|
|
1.24
|
%
|
Dividend Yield
|
N/A
|
|
3.31
|
%
|
|
4.96
|
%
|
|
For the Year Ended December 31,
|
|||||||||||||||||||
|
2014
|
|
2013
|
|
2012
|
|||||||||||||||
|
Options Outstanding
|
|
Weighted Average Exercise Price
|
|
Options Outstanding
|
|
Weighted Average Exercise Price
|
|
Options Outstanding
|
|
Weighted Average Exercise Price
|
|||||||||
Beginning Balance
|
3,793,884
|
|
|
$
|
7.45
|
|
|
4,524,807
|
|
|
$
|
6.88
|
|
|
5,071,227
|
|
|
$
|
7.19
|
|
Options Granted
|
—
|
|
|
—
|
|
|
76,522
|
|
|
10.26
|
|
|
51,625
|
|
|
5.24
|
|
|||
Options Cancelled
|
(270,000
|
)
|
|
12.78
|
|
|
—
|
|
|
—
|
|
|
(2,167
|
)
|
|
8.00
|
|
|||
Options Exercised
|
(409,602
|
)
|
|
6.53
|
|
|
(752,445
|
)
|
|
4.22
|
|
|
(180,878
|
)
|
|
4.22
|
|
|||
Options Repurchased by the Company
|
—
|
|
|
—
|
|
|
(55,000
|
)
|
|
9.29
|
|
|
(415,000
|
)
|
|
11.61
|
|
|||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Ending Balance
|
3,114,282
|
|
|
$
|
7.10
|
|
|
3,793,884
|
|
|
$
|
7.45
|
|
|
4,524,807
|
|
|
$
|
6.88
|
|
|
|
Options Outstanding
|
|
Options Exercisable
|
||||||||||||||
|
|
Number Outstanding as of December 31, 2014
|
|
Weighted-
Average Remaining Contractual Life
|
|
Weighted Average Exercise Price
|
|
Number Exercisable as of December 31, 2014
|
|
Weighted-
Average Remaining Contractual Life
|
|
Weighted Average Exercise Price
|
||||||
$4.22 – $5.00
|
|
1,349,081
|
|
|
5.0
|
|
$
|
4.41
|
|
|
1,349,081
|
|
|
5.0
|
|
$
|
4.41
|
|
$5.00 – $10.00
|
|
1,189,369
|
|
|
5.1
|
|
7.87
|
|
|
1,189,369
|
|
|
5.1
|
|
7.87
|
|
||
$10.00 – $15.00
|
|
575,832
|
|
|
3.5
|
|
11.85
|
|
|
532,195
|
|
|
3.1
|
|
11.98
|
|
||
$4.22 – $15.00
|
|
3,114,282
|
|
|
4.8
|
|
$
|
7.10
|
|
|
3,070,645
|
|
|
4.7
|
|
$
|
7.06
|
|
|
Options
Outstanding
|
|
Options
Exercisable
|
||||
|
(in thousands)
|
||||||
Aggregate Intrinsic Value
|
$
|
8,714
|
|
|
$
|
8,714
|
|
|
For the Year Ended December 31,
|
|||||||||||||||||||
|
2014
|
|
2013
|
|
2012
|
|||||||||||||||
|
Phantom Units Outstanding
|
|
Weighted Average Price
|
|
Phantom Units Outstanding
|
|
Weighted Average Price
|
|
Phantom Units Outstanding
|
|
Weighted Average Price
|
|||||||||
Beginning Balance
|
109,665
|
|
|
$
|
5.32
|
|
|
106,340
|
|
|
$
|
5.69
|
|
|
73,570
|
|
|
$
|
7.53
|
|
Phantom Class B Units Issued
|
22,959
|
|
|
11.76
|
|
|
68,518
|
|
|
5.40
|
|
|
80,831
|
|
|
4.33
|
|
|||
Vesting of Phantom Class B Units
|
(54,984
|
)
|
|
6.09
|
|
|
(65,193
|
)
|
|
6.00
|
|
|
(48,061
|
)
|
|
6.22
|
|
|||
Phantom Class B Units Forfeited
|
(5,952
|
)
|
|
7.35
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Ending Balance
|
71,688
|
|
|
$
|
6.63
|
|
|
109,665
|
|
|
$
|
5.32
|
|
|
106,340
|
|
|
$
|
5.69
|
|
|
For the Year Ended December 31,
|
|
|
|||||||||||||||||
|
2014
|
|
2013
|
|
2012
|
|||||||||||||||
|
Phantom Units Outstanding
|
|
Weighted Average Price
|
|
Phantom Units Outstanding
|
|
Weighted Average Price
|
|
Phantom Units Outstanding
|
|
Weighted Average Price
|
|||||||||
Beginning Balance
|
4,499,386
|
|
|
$
|
4.68
|
|
|
4,103,896
|
|
|
$
|
3.85
|
|
|
—
|
|
|
$
|
—
|
|
Phantom Class B Units Issued
|
102,110
|
|
|
7.62
|
|
|
805,879
|
|
|
8.50
|
|
|
4,103,896
|
|
|
3.85
|
|
|||
Vesting of Phantom Class B Units
|
(423,263
|
)
|
|
4.83
|
|
|
(410,389
|
)
|
|
3.85
|
|
|
—
|
|
|
—
|
|
|||
Phantom Class B Units Forfeited
|
(701,299
|
)
|
|
3.85
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Ending Balance
|
3,476,934
|
|
|
$
|
4.92
|
|
|
4,499,386
|
|
|
$
|
4.68
|
|
|
4,103,896
|
|
|
$
|
3.85
|
|
|
For the Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
|
(in thousands, except share and per share amounts)
|
||||||||||
Net Income for Basic Earnings per Share
|
$
|
8,100
|
|
|
$
|
6,670
|
|
|
$
|
3,840
|
|
Basic Weighted-Average Shares Outstanding
|
12,628,676
|
|
|
11,990,757
|
|
|
10,787,540
|
|
|||
Basic Earnings per Share
|
$
|
0.64
|
|
|
$
|
0.56
|
|
|
$
|
0.36
|
|
|
For the Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
|
(in thousands)
|
||||||||||
Net Income Attributable to Non-Controlling Interests of Pzena Investment Management, LLC
|
$
|
47,026
|
|
|
$
|
40,533
|
|
|
$
|
29,711
|
|
Less: Assumed Corporate Income Taxes
|
19,441
|
|
|
16,886
|
|
|
12,730
|
|
|||
Assumed After-Tax Income of Pzena Investment Management, LLC
|
27,585
|
|
|
23,647
|
|
|
16,981
|
|
|||
Net Income of Pzena Investment Management, Inc
|
8,100
|
|
|
6,670
|
|
|
3,840
|
|
|||
Diluted Net Income
|
$
|
35,685
|
|
|
$
|
30,317
|
|
|
$
|
20,821
|
|
|
For the Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
|
(In thousands, except share and per share amounts)
|
||||||||||
Diluted Net Income Allocated to:
|
|
|
|
|
|
|
|
|
|||
Class A Common Stock
|
$
|
35,606
|
|
|
$
|
30,244
|
|
|
20,742
|
|
|
Participating Class B Units
|
79
|
|
|
73
|
|
|
79
|
|
|||
Total Diluted Net Income Attributable to Shareholders
|
$
|
35,685
|
|
|
$
|
30,317
|
|
|
$
|
20,821
|
|
Basic Weighted-Average Shares Outstanding
|
12,628,676
|
|
|
11,990,757
|
|
|
10,787,540
|
|
|||
Dilutive Effect of Class B Units
|
52,418,097
|
|
|
52,508,211
|
|
|
53,783,093
|
|
|||
Dilutive Effect of Options
(1)
|
915,893
|
|
|
690,563
|
|
|
535,629
|
|
|||
Dilutive Effect of Phantom Units
|
1,648,210
|
|
|
1,383,794
|
|
|
140,397
|
|
|||
Dilutive Effect of Restricted Shares of Class A Common Stock
(2)
|
42,599
|
|
|
29,795
|
|
|
1,099
|
|
|||
Dilutive Weighted-Average Shares Outstanding
|
67,653,475
|
|
|
66,603,120
|
|
|
65,247,758
|
|
|||
Add: Participating Class B Units
(3)
|
144,049
|
|
|
156,720
|
|
|
243,515
|
|
|||
Total Dilutive Weighted-Average Shares Outstanding
|
67,797,524
|
|
|
66,759,840
|
|
|
65,491,273
|
|
|||
Diluted Earnings per Share
|
$
|
0.53
|
|
|
$
|
0.45
|
|
|
$
|
0.32
|
|
(1)
|
Represents the dilutive effect of options to purchase Class B units and Class A common stock.
|
(2)
|
Certain restricted shares of Class A common stock granted to employees are not entitled to dividend or dividend equivalent payments until they are vested and are therefore non-participating securities and are not included in the computation of basic earnings per share. They are included in the computation of diluted earnings per share when the effect is dilutive using the treasury stock method.
|
(3)
|
Unvested Class B Units granted to employees have nonforfeitable rights to dividends and therefore participate fully in the results of the operating company's operations from the date they are granted. They are included in the computation of diluted earnings per share using the two-class method for participating securities.
|
|
July 31,
2014 |
|
March 20,
2013 |
|
August 31,
2012 |
|
||||||
|
(in thousands)
|
|||||||||||
Pzena Investment Management, LLC Members' Capital
|
$
|
16,142
|
|
|
$
|
18,781
|
|
|
$
|
10,006
|
|
|
Pzena Investment Management, LLC Accumulated Deficit
|
(15,284
|
)
|
|
(18,100
|
)
|
|
(9,651
|
)
|
|
|||
Realizable Deferred Tax Asset
|
1,272
|
|
|
795
|
|
|
278
|
|
|
|||
Net Tax Receivable Liability to Converting Unitholders
|
(1,081
|
)
|
|
(677
|
)
|
|
(242
|
)
|
|
|||
Total
|
$
|
1,049
|
|
|
$
|
799
|
|
|
$
|
391
|
|
|
Common Stock, at Par
|
$
|
11
|
|
|
$
|
13
|
|
|
$
|
7
|
|
|
Additional Paid-in Capital
|
1,038
|
|
|
786
|
|
|
384
|
|
|
|||
Total
|
$
|
1,049
|
|
|
$
|
799
|
|
|
$
|
391
|
|
|
|
For the Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
|
(in thousands)
|
||||||||||
Non-Controlling Interests of Pzena Investment Management, LLC
|
$
|
47,026
|
|
|
$
|
40,533
|
|
|
$
|
29,711
|
|
Non-Controlling Interests of Consolidated Subsidiaries
|
(92
|
)
|
|
1,235
|
|
|
854
|
|
|||
Non-Controlling Interests
|
$
|
46,934
|
|
|
$
|
41,768
|
|
|
$
|
30,565
|
|
|
Cost
|
|
Unrealized Gain/(Loss)
|
|
Fair Value
|
||||||
|
(in thousands)
|
||||||||||
Equity Securities
|
$
|
23,789
|
|
|
$
|
(753
|
)
|
|
$
|
23,036
|
|
Investments in Mutual Funds
|
3,820
|
|
|
1,089
|
|
|
4,909
|
|
|||
Total
|
$
|
27,609
|
|
|
$
|
336
|
|
|
$
|
27,945
|
|
|
Cost
|
|
Unrealized (Gain)/Loss
|
|
Fair Value
|
||||||
|
(in thousands)
|
||||||||||
Securities Sold Short
|
1,496
|
|
|
76
|
|
|
1,572
|
|
|||
Total
|
$
|
1,496
|
|
|
$
|
76
|
|
|
$
|
1,572
|
|
|
Cost
|
|
Unrealized Gain/(Loss)
|
|
Fair Value
|
||||||
|
(in thousands)
|
||||||||||
Equity Securities
|
$
|
1,732
|
|
|
$
|
632
|
|
|
$
|
2,364
|
|
Investments in Mutual Funds
|
4,043
|
|
|
1,214
|
|
|
5,257
|
|
|||
Total
|
$
|
5,775
|
|
|
$
|
1,846
|
|
|
$
|
7,621
|
|
|
As of
|
||||||
|
December 31,
2014 |
|
December 31,
2013 |
||||
|
(in thousands)
|
||||||
Leasehold Improvements
|
$
|
3,206
|
|
|
$
|
1,219
|
|
Computer Hardware
|
1,228
|
|
|
1,141
|
|
||
Furniture and Fixtures
|
786
|
|
|
786
|
|
||
Office Equipment
|
279
|
|
|
256
|
|
||
Computer Software
|
345
|
|
|
283
|
|
||
Total
|
5,844
|
|
|
3,685
|
|
||
Less: Accumulated Depreciation and Amortization
|
(3,072
|
)
|
|
(2,850
|
)
|
||
Total
|
$
|
2,772
|
|
|
$
|
835
|
|
Year Ending December 31,
|
|
Minimum
Payments
(1)
|
||
|
|
(in thousands)
|
||
2015
|
|
3,728
|
|
|
2016
|
|
1,979
|
|
|
2017
|
|
1,979
|
|
|
2018
|
|
1,979
|
|
|
2019
|
|
1,979
|
|
|
2020 and thereafter
|
|
11,876
|
|
|
Total
|
|
$
|
23,520
|
|
|
For the Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
|
(in thousands)
|
||||||||||
Current Provision:
|
|
|
|
|
|
|
|
|
|||
Unincorporated Business Taxes
(1)
|
$
|
2,938
|
|
|
$
|
2,438
|
|
|
$
|
2,440
|
|
Local Corporate Tax
|
—
|
|
|
—
|
|
|
—
|
|
|||
State Corporate Tax
|
—
|
|
|
—
|
|
|
—
|
|
|||
Federal Corporate Tax
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total Current Provision
|
$
|
2,938
|
|
|
$
|
2,438
|
|
|
$
|
2,440
|
|
Deferred Provision:
|
|
|
|
|
|
|
|
|
|||
Unincorporated Business Taxes
(1)
|
$
|
15
|
|
|
$
|
(4
|
)
|
|
$
|
(21
|
)
|
Local Corporate Tax
|
391
|
|
|
405
|
|
|
289
|
|
|||
State Corporate Tax
|
731
|
|
|
714
|
|
|
510
|
|
|||
Federal Corporate Tax
|
3,087
|
|
|
2,892
|
|
|
1,761
|
|
|||
Total Deferred Provision
|
$
|
4,224
|
|
|
$
|
4,007
|
|
|
$
|
2,539
|
|
Change in Valuation Allowance
|
(6,174
|
)
|
|
(6,142
|
)
|
|
(3,068
|
)
|
|||
Net Adjustment to Deferred Tax Asset
(2)
|
$
|
895
|
|
|
$
|
286
|
|
|
$
|
—
|
|
Total Income Tax Expense
|
$
|
1,883
|
|
|
$
|
589
|
|
|
$
|
1,911
|
|
|
For the Year Ended December 31,
|
|||||||||||||||||||
|
2014
|
|
2013
|
|
2012
|
|||||||||||||||
|
Amount
|
|
% of Pretax
Income
|
|
Amount
|
|
% of Pretax
Income
|
|
Amount
|
|
% of Pretax
Income
|
|||||||||
|
(in thousands, except % amounts)
|
|||||||||||||||||||
Federal Corporate Tax
|
$
|
19,352
|
|
|
34.0
|
%
|
|
$
|
16,669
|
|
|
34.0
|
%
|
|
$
|
12,347
|
|
|
34.0
|
%
|
State and Local Corporate Tax, net of Federal Benefit
|
4,178
|
|
|
7.3
|
%
|
|
3,775
|
|
|
7.7
|
%
|
|
3,214
|
|
|
8.9
|
%
|
|||
Unincorporated Business Tax
(1)
|
1,732
|
|
|
3.1
|
%
|
|
1,741
|
|
|
3.6
|
%
|
|
1,382
|
|
|
3.8
|
%
|
|||
Non-Controlling Interests
|
(19,403
|
)
|
|
(34.1
|
)%
|
|
(17,417
|
)
|
|
(35.5
|
)%
|
|
(13,097
|
)
|
|
(36.1
|
)%
|
|||
Increase/(Decrease) in Liability to Selling and Converting Shareholders
|
1,417
|
|
|
2.5
|
%
|
|
1,519
|
|
|
3.1
|
%
|
|
900
|
|
|
2.5
|
%
|
|||
Deferred Income Tax Valuation Allowance
|
(6,174
|
)
|
|
(10.9
|
)%
|
|
(6,142
|
)
|
|
(12.5
|
)%
|
|
(3,068
|
)
|
|
(8.4
|
)%
|
|||
Operating Loss Carryforward
|
(625
|
)
|
|
(1.1
|
)%
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|||
Net Adjustment to Deferred Tax Asset
(2)
|
895
|
|
|
1.6
|
%
|
|
286
|
|
|
0.6
|
%
|
|
—
|
|
|
—
|
%
|
|||
Other
|
511
|
|
|
0.9
|
%
|
|
158
|
|
|
0.2
|
%
|
|
233
|
|
|
0.6
|
%
|
|||
Income Tax Expense
|
$
|
1,883
|
|
|
3.3
|
%
|
|
$
|
589
|
|
|
1.2
|
%
|
|
$
|
1,911
|
|
|
5.3
|
%
|
|
For the Year Ended December 31, 2014
|
||
|
(in thousands)
|
||
Balance at December 31, 2013
|
$
|
409
|
|
Increases Related to Prior Year Tax Positions
|
—
|
|
|
Increases Related to Current Year Tax Positions
|
691
|
|
|
Balance at December 31, 2014
|
$
|
1,100
|
|
|
For the Year Ended December 31, 2013
|
||
|
(in thousands)
|
||
Balance at December 31, 2012
|
$
|
—
|
|
Increases Related to Prior Year Tax Positions
|
188
|
|
|
Increases Related to Current Year Tax Positions
|
221
|
|
|
Balance at December 31, 2013
|
$
|
409
|
|
|
Section 754
|
|
Other
|
|
Valuation Allowance
|
|
Total
|
||||||||
|
(in thousands)
|
||||||||||||||
Balance at December 31, 2013
|
$
|
61,628
|
|
|
$
|
4,657
|
|
|
$
|
(53,973
|
)
|
|
$
|
12,312
|
|
Deferred Tax (Expense)/Benefit
|
(4,067
|
)
|
|
447
|
|
|
—
|
|
|
(3,620
|
)
|
||||
Unit Exchange
|
6,013
|
|
|
—
|
|
|
(4,741
|
)
|
|
1,272
|
|
||||
Change in Valuation Allowance
|
—
|
|
|
—
|
|
|
6,174
|
|
|
6,174
|
|
||||
Operating Loss Carryforward
|
—
|
|
|
(625
|
)
|
|
—
|
|
|
(625
|
)
|
||||
Net Adjustment to Deferred Tax Asset
(1)
|
(8,791
|
)
|
|
(405
|
)
|
|
8,301
|
|
|
(895
|
)
|
||||
Balance at December 31, 2014
|
$
|
54,783
|
|
|
$
|
4,074
|
|
|
$
|
(44,239
|
)
|
|
$
|
14,618
|
|
|
Total
|
||
|
(in thousands)
|
||
Balance at December 31, 2013
|
$
|
(39
|
)
|
Deferred Tax Expense
|
21
|
|
|
Balance at December 31, 2014
|
$
|
(18
|
)
|
|
Section 754
|
|
Other
|
|
Valuation Allowance
|
|
Total
|
||||||||
|
(in thousands)
|
||||||||||||||
Balance at December 31, 2012
|
$
|
65,069
|
|
|
$
|
4,536
|
|
|
$
|
(59,917
|
)
|
|
$
|
9,688
|
|
Deferred Tax (Expense)/Benefit
|
(3,788
|
)
|
|
(239
|
)
|
|
—
|
|
|
(4,027
|
)
|
||||
Unit Exchange
|
5,935
|
|
|
—
|
|
|
(5,140
|
)
|
|
795
|
|
||||
Change in Valuation Allowance
|
—
|
|
|
—
|
|
|
6,142
|
|
|
6,142
|
|
||||
Net Adjustment to Deferred Tax Asset
(1)
|
$
|
(5,588
|
)
|
|
$
|
360
|
|
|
$
|
4,942
|
|
|
$
|
(286
|
)
|
Balance at December 31, 2013
|
$
|
61,628
|
|
|
$
|
4,657
|
|
|
$
|
(53,973
|
)
|
|
$
|
12,312
|
|
|
Total
|
||
|
(in thousands)
|
||
Balance at December 31, 2012
|
$
|
(59
|
)
|
Deferred Tax Expense
|
20
|
|
|
Balance at December 31, 2013
|
$
|
(39
|
)
|
|
For the Year Ended December 31,
|
||||||
|
2014
|
|
2013
|
||||
|
(in thousands)
|
||||||
Beginning Balance
|
$
|
12,777
|
|
|
$
|
9,656
|
|
Change in Liability
|
4,168
|
|
|
4,468
|
|
||
Unit Conversion
|
1,081
|
|
|
677
|
|
||
Tax Receivable Agreement Payments
|
(2,668
|
)
|
|
(2,024
|
)
|
||
Ending Balance
|
$
|
15,358
|
|
|
$
|
12,777
|
|
|
For the Quarter Ended 2014
|
||||||||||||||
|
Dec. 31
|
|
Sept. 30
|
|
June 30
|
|
March 31
|
||||||||
|
(in thousands, except per share amounts)
(unaudited)
|
||||||||||||||
Total Revenue
|
$
|
28,560
|
|
|
$
|
29,605
|
|
|
$
|
27,945
|
|
|
$
|
26,401
|
|
Operating Income
|
14,749
|
|
|
16,632
|
|
|
15,541
|
|
|
14,031
|
|
||||
Net Income
|
$
|
2,469
|
|
|
$
|
2,059
|
|
|
$
|
2,124
|
|
|
$
|
1,448
|
|
Basic Earnings Per Share
|
$
|
0.19
|
|
|
$
|
0.16
|
|
|
$
|
0.17
|
|
|
$
|
0.12
|
|
Diluted Earnings Per Share
|
$
|
0.14
|
|
|
$
|
0.14
|
|
|
$
|
0.13
|
|
|
$
|
0.11
|
|
|
For the Quarter Ended 2013
|
||||||||||||||
|
Dec. 31
|
|
Sept. 30
|
|
June 30
|
|
March 31
|
||||||||
|
(in thousands, except per share amounts)
(unaudited)
|
||||||||||||||
Total Revenue
|
$
|
28,749
|
|
|
$
|
24,046
|
|
|
$
|
22,132
|
|
|
$
|
20,842
|
|
Operating Income
|
17,197
|
|
|
12,951
|
|
|
11,275
|
|
|
9,425
|
|
||||
Net Income
|
$
|
2,279
|
|
|
$
|
1,956
|
|
|
$
|
1,266
|
|
|
$
|
1,169
|
|
Basic Earnings Per Share
|
$
|
0.19
|
|
|
$
|
0.16
|
|
|
$
|
0.10
|
|
|
$
|
0.10
|
|
Diluted Earnings Per Share
|
$
|
0.15
|
|
|
$
|
0.12
|
|
|
$
|
0.10
|
|
|
$
|
0.09
|
|
1.
|
Section 2.02 of Exhibit B shall be revised to add the following as paragraph (g) thereof:
|
RICHARD PZENA
By: Richard Pzena
|
|
|
THE AARON PZENA FAMILY TRUST
By: William Greenblatt, Trustee
|
|
|
THE MICHELE PZENA FAMILY TRUST
By: Laura Pzena, Trustee
|
|
|
THE ERIC PZENA FAMILY TRUST
By: Robin Pzena, Trustee
|
|
|
THE DANIEL PZENA FAMILY TRUST
By: Jeffrey Pzena, Trustee
|
|
|
JOHN GOETZ
By: John Goetz
|
|
|
THE RACHEL THERESA GOETZ TRUST
By: Gary Bachman, Trustee
|
|
|
THE CARRIE ESTHER GOETZ TRUST
By: Gary Bachman, Trustee
|
|
|
WILLIAM LIPSEY
By: William L. Lipsey
|
|
|
THE WILLIAM LIPSEY DYNASTY TRUST
By:
Amy Lipsey, Trustee
|
|
|
MICHAEL PETERSON
By: Michael Peterson
|
|
|
THE MICHAEL D. PETERSON 2009 GRANTOR RETAINED ANNUITY TRUST
By:
Sarah Peterson, Trustee
By:
Tobi Zemsky, Trustee
|
|
|
THE SARAH M. PETERSON 2009 GRANTOR RETAINED ANNUITY TRUST
By:
Michael Peterson, Trustee
By:
Tobi Zemsky, Trustee
|
|
|
1.
|
Section 2.13 of the Plan shall be deleted and replaced with the following sentence:
|
By:
|
Pzena Investment Management, Inc., its Managing Member
|
1.
|
Section 3.9 of the Plan shall be deleted and replaced with the following:
|
By:
|
Pzena Investment Management, Inc., its Managing Member
|
Vesting Date
|
Vested Amount
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.
|
Restriction on Transfer
|
5.
|
Tax Consequences
|
6.
|
Compliance with Law
|
7.
|
General Provisions
|
4.
|
Additional Award Terms
|
5.
|
Tax Consequences
|
6.
|
Compliance with Law
|
7.
|
General Provisions
|
1.
|
I have reviewed this annual report on Form 10-K of Pzena Investment Management, Inc.
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: March 13, 2015
|
/s/ Richard S. Pzena
|
|
Richard S. Pzena
Chief Executive Officer
(principal executive officer)
|
1.
|
I have reviewed this annual report on Form 10-K of Pzena Investment Management, Inc.
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: March 13, 2015
|
/s/ Gary J. Bachman
|
|
Gary J. Bachman
Chief Financial Officer
(principal financial and accounting officer)
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: March 13, 2015
|
/s/ Richard S. Pzena
|
|
Richard S. Pzena
Chief Executive Officer
(principal executive officer)
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: March 13, 2015
|
/s/ Gary J. Bachman
|
|
Gary J. Bachman
Chief Financial Officer
(principal financial and accounting officer)
|