Compensation and Benefits

6 Months Ended

Jun. 30, 2026

Share-Based Payment Arrangement [Abstract]

Note 11. Compensation and Benefits

Total compensation and benefits consist of the following:


	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2026		2025		2026		2025
Salaries, incentive compensation and benefits (1)	$	145,279	$	136,533	$	292,078	$	270,512
Long-term cash incentive compensation expense	29,832		22,479		44,510		36,206
Restricted share-based award compensation expense	6,874		6,864		14,110		14,319
Long-term incentive compensation expense	36,706		29,343		58,620		50,525
Total compensation and benefits	$	181,985	$	165,876	$	350,698	$	321,037
(1) Excluding long-term incentive compensation expense

Incentive compensation

Cash incentive compensation paid to members of Artisan’s investment teams and members of its distribution team is generally based on formulas that are tied directly to revenues. The majority of this incentive compensation is earned on a quarterly basis and paid in the quarter following the quarter in which it was earned with the exception of fourth quarter incentive compensation which is earned and paid in the fourth quarter of the year. Cash incentive compensation paid to most other employees is determined based on individual performance and Artisan’s overall results during the applicable year and is generally paid on an annual basis.

Long-term incentive compensation awards consist of both APAM restricted share-based awards and long-term cash awards, which are referred to as franchise capital awards. These awards are described in more detail below.

Restricted share-based awards

APAM has granted a combination of restricted stock awards, restricted stock units and performance share units (collectively referred to as “restricted share-based awards” or “awards”) of Class A common stock to employees.

Standard Restricted Shares. Standard restricted shares are generally subject to a pro rata five-year service vesting condition.

Career Shares. Career shares are generally subject to both (i) a pro rata five-year service vesting condition and (ii) a qualifying retirement (as defined in the award agreement) condition.

Franchise Shares. Like career shares, franchise shares are generally subject to both (i) a pro rata five-year service vesting condition and (ii) a qualifying retirement condition. In addition, franchise shares, which are only granted to investment team members, are subject to a Franchise Protection Clause, which provides that the number of shares that ultimately vest depends on whether certain conditions relating to client cash flows are met. If such conditions are not met, compensation cost related to unvested shares will be reversed.

Performance Share Units (PSUs). As of June 30, 2026 and December 31, 2025, all 152,207 unvested PSUs had met the required three-year performance conditions, but remain outstanding subject to meeting a qualifying retirement vesting condition.

For awards granted beginning in 2024, the pro rata five-year service vesting condition is waived for grantees that satisfy the qualified retirement requirements and an age-plus-service condition.

Unvested restricted share-based awards are subject to forfeiture. Grantees are generally entitled to dividends or dividend equivalents on unvested and vested awards. 5,050,459 shares of Class A common stock were reserved and available for issuance under the Artisan Partners Asset Management Inc. 2023 Omnibus Incentive Compensation Plan (the “Plan”) at June 30, 2026.

During the six months ended June 30, 2026, Artisan granted 465,719 restricted Class A shares and 6,804 restricted stock units.

The following tables summarize the Class A restricted share-based award activity for the six months ended June 30, 2026:


	Weighted-Average Grant Date Fair Value		Restricted Stock Awards and Restricted Stock Units
Unvested at January 1, 2026	$	39.58	4,949,507
Granted	43.97		472,523
Forfeited	41.88		(8,403)
Vested	44.21		(366,679)
Unvested at June 30, 2026	$	39.65	5,046,948

The unrecognized compensation expense for the unvested restricted Class A shares and restricted stock units as of June 30, 2026 was $51.2 million with a weighted average recognition period of 2.6 years remaining.

During the six months ended June 30, 2026, the Company withheld a total of 102,824 restricted shares and paid a total of $4.5 million as a result of net share settlements to satisfy employee tax withholding obligations. These net share settlements had the effect of shares repurchased and retired by the Company, as they reduced the number of shares outstanding.

Long-term cash awards (franchise capital awards)

During the six months ended June 30, 2026, Artisan granted $50.6 million of franchise capital awards to investment team members in lieu of certain additional restricted share-based awards. The franchise capital awards are subject to the same long-term vesting and forfeiture provisions as restricted share-based awards, as described above. Prior to vesting, franchise capital awards are generally allocated to one or more of the investment strategies managed by the award recipient’s investment team. During the vesting period, the value of the awards will increase or decrease based on the investment returns of the strategies to which the awards are allocated. Compensation expense, including the appreciation or depreciation related to investment returns, is recognized on a straight-line basis over the required service period, which is generally five years. If an employee is eligible to fully vest in an award upon a qualified retirement, the requisite service period for that award is equal to the employee’s required retirement notice period, which is generally 12 or 18 months. As the awards will generally be paid out in cash upon vesting, the fair value of unvested awards is recorded as a liability based on the percentage of the service requirement that has been completed. The liability is recorded within accrued long-term incentive compensation in the Company’s unaudited condensed consolidated statements of financial condition.

The Company hedges its economic exposure to the change in value of franchise capital awards due to market movements by investing the cash reserved for the awards in the underlying investments. The franchise capital award liability and the underlying investment holdings are marked to market each quarter. Compensation expense related to the appreciation or depreciation is recognized based on the change in the proportionate fair value of the vested portion of the awards during the period, such that the recorded liability at each reporting date reflects the fair value of the portion of the awards for which the requisite service has been rendered. The change in value of the underlying investment holdings is recognized in non-operating income (expense) in the period of change. While there is a timing difference between the recognition of the compensation expense and the offsetting investment gain or loss, the compensation expense and investment income will net to zero at the end of the multi-year vesting period for all awards that ultimately vest.

The change in value of the investments had the following impact on the unaudited consolidated statements of operations:


		For the Three Months Ended June 30,				For the Six Months Ended June 30,
Statement of Operations Section	Statement of Operations Line Item	2026		2025		2026		2025
Operating expenses (benefit)	Compensation and benefits	$	16,777	$	9,925	$	16,779	$	12,437
Non-operating income (expense)	Net investment gain (loss) of nonconsolidated investment products	28,050		15,919		21,627		17,996
Non-operating income (expense)	Net investment gain (loss) of consolidated investment products	2,220		2,468		2,348		2,980

The unrecognized compensation expense for the unvested franchise capital awards as of June 30, 2026 was $141.7 million with a weighted average recognition period of 2.2 years remaining.