NEW YORK, Nov. 17, 2011 /PRNewswire/ -- AllianceBernstein
L.P. ("AllianceBernstein") and AllianceBernstein Holding L.P.
("Alliance Bernstein Holding") (NYSE: AB) today announced that they
are implementing changes to their employee long-term incentive
compensation award program designed to better align the costs of
employee compensation and benefits with the firm's current year
financial performance, and provide employees with a higher degree
of certainty that they will receive the incentive compensation they
are awarded.
AllianceBernstein is amending all outstanding deferred incentive
compensation awards of active employees, so that employees who
terminate their employment or are terminated without cause may
continue to vest, so long as the employees do not violate the
agreements and covenants set forth in the applicable award
agreement, including restrictions on competition, employee and
client solicitation, and a claw back for failing to follow existing
risk management policies. This amendment results in the immediate
recognition in the current quarter of the cost of all unamortized
deferred incentive compensation awards from prior years that would
otherwise have been expensed in future periods.
In addition, future deferred incentive compensation awards,
including awards granted in 2011, will contain the same continued
vesting provisions and, accordingly, AllianceBernstein's annual
incentive compensation expense will reflect 100% of the expense
associated with the deferred incentive compensation awarded in each
year. This approach to expense recognition will more closely match
the economic cost of awarding deferred incentive compensation to
the period in which the related service is performed.
“The changes we are implementing are good for our employees, the
firm and our unitholders,” said Peter S.
Kraus, Chairman and Chief Executive Officer. “With
more competitive compensation practices, our employees can have
greater certainty that they will receive the incentive compensation
they are awarded, and we have more flexibility to adjust the mix of
deferred and cash compensation to meet the competitive environment.
As a result, our firm’s financials will be more reflective of
our operating performance in any given year, and we believe we will
see a benefit in how our firm and our units are valued.”
As a result of this change, the firm will expense in the current
quarter all unamortized deferred incentive compensation awards from
prior years and 100% of the expense associated with its 2011
deferred incentive compensation awards. AllianceBernstein
currently expects to record a one-time, non-cash charge of
approximately $560 million in the
fourth quarter of 2011, which will result in an after-tax net
operating loss for the fourth quarter and full fiscal year.
This charge will not affect adjusted earnings. In
addition, the fourth quarter 2011 unitholder distribution will not
be affected and will reflect AllianceBernstein's financial results
before this charge is taken. Based on the decline in revenues
experienced by the firm thus far this year, the firm expects that
the ratio of adjusted compensation to adjusted revenues will
increase in the fourth quarter and will approach 50% for the full
year.
Cautions Regarding Forward-Looking Statements
Certain statements provided by management in this news release
are "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking
statements are subject to risks, uncertainties, and other factors
that could cause actual results to differ materially from future
results expressed or implied by such forward-looking statements.
The most significant of these factors include, but are not
limited to, the following: the performance of financial markets,
the investment performance of sponsored investment products and
separately-managed accounts, general economic conditions, industry
trends, future acquisitions, competitive conditions, and current
and proposed government regulations, including changes in tax
regulations and rates and the manner in which the earnings of
publicly-traded partnerships are taxed. AllianceBernstein
cautions readers to carefully consider such factors. Further, such
forward-looking statements speak only as of the date on which such
statements are made; AllianceBernstein undertakes no obligation to
update any forward-looking statements to reflect events or
circumstances after the date of such statements. For further
information regarding these forward-looking statements and the
factors that could cause actual results to differ, see "Risk
Factors" and "Cautions Regarding Forward-Looking Statements" in
AllianceBernstein's Form 10-K for the year ended December 31, 2010 and subsequent Forms 10-Q.
Any or all of the forward-looking statements made in this
news release, Form 10-K, Form 10-Q, other documents
AllianceBernstein files with or furnishes to the SEC, and any other
public statements issued by AllianceBernstein, may turn out to be
wrong. It is important to remember that other factors besides
those listed in "Risk Factors" and "Cautions Regarding
Forward-Looking Statements," and those listed below, could also
adversely affect AllianceBernstein's financial condition, results
of operations and business prospects.
The forward-looking statements referred to in the preceding
paragraph include statements regarding:
- The expectation that the firm will record a one-time,
non-cash charge of approximately $560
million and have a net operating loss in the fourth quarter
and full year: The charge and net operating loss we
expect this quarter are preliminary. They are based on
performance and other assumptions during the quarter and other
factors largely beyond our control.
- The expectation that the ratio of adjusted compensation
to adjusted revenues will increase in the fourth quarter and will
approach 50% for the full year: Aggregate employee
compensation reflects employee performance and competitive
compensation levels. Fluctuations in our revenues and/or
changes in competitive compensation levels could result in adjusted
employee compensation expense exceeding 50% of our adjusted
revenues.
About AllianceBernstein
AllianceBernstein is a leading global investment management firm
that offers high-quality research and diversified investment
services to institutional investors, individuals and private
clients in major world markets.
At September 30, 2011,
AllianceBernstein Holding L.P. owned approximately 37.8% of
the issued and outstanding AllianceBernstein Units and AXA, one of
the largest global financial services organizations, owned an
approximate 63.1% economic interest in AllianceBernstein.
Additional information about AllianceBernstein may be found on
our internet site, www.alliancebernstein.com.
SOURCE AllianceBernstein L.P.