2023 ANNUAL REPORT
Focused Execution,
Through a
Global Lens
AB Holding (The Publicly Traded Partnership)
Year Ended December 31
2023
2022
2021
$303,539
$299,635
$386,971
$2.69
$2.69
$2.94
$2.95
$3.89
$3.90
Adjusted1 Diluted Net Income (USD
Thousands)
Adjusted Diluted Net Income per Unit
Distributions per Unit
AB (Operating Partnership)
Year Ended December 31
2023
2022
2021
Assets Under Management (USD Thousands)
$725,154
$646,422
$778,570
Adjusted Revenues (USD Thousands)
$3,371,949
$3,336,234
$3,609,536
Adjusted Operating Income (USD Thousands)
$951,219
$965,103
$1,219,455
Employees
4,707
4,436
4,118
ASSETS UNDER MANAGEMENT AS OF DECEMBER 31, 2023
(USD Billions)
By Investment Service
By Channel
By Client Domicile
Equity
Passive2
$11 Fixed Income
Passive2
Private
Wealth 17%
Alternatives/
Multi-Asset3
$62
$135
$270
Fixed
Income
Active
$247
Equity Active
Retail
39%
$121
$287
$317
Institutions
44%
US 73%
Non-US
27%
$198
$527
1 The adjusted financial measures are all non-GAAP financial measures. See page 36 and pages 45-47 of the enclosed Form 10-K for reconciliations of GAAP financial results
to adjusted financial results and notes describing the adjustments.
2 Includes index and enhanced index services
3 Includes certain multi-asset solutions and services not included in equity or fixed income services
Letter from the CEO
Financial markets rallied strongly to end 2023, as investors anticipated a shift in
U.S. Federal Reserve policy towards lower interest rates this year.
In 2023, AB was among the early beneficiaries of a wave of fixed
income re-allocations, with two of our three distribution channels (Retail
and Private Wealth) growing organically.
We experienced continued market share gains in US Retail, led by
Municipal separately managed accounts, which grew organically for the
11th straight year. We also saw strong cross-border fixed income flows
driven by healthy net inflows from Asia.
Still, the operating environment for global asset managers continues
to reflect a confluence of dynamic cyclical and secular factors. AB’s
ability to adapt and grow against this backdrop begins with a balanced,
geographically diverse, and scaled platform. This enables us to invest
for growth while prudently managing costs, with the goal of providing
high quality, value-add investment services to our clients.
Importantly, in 2023 we made strong progress against these key
strategic growth initiatives:
• Launching 10 new active Exchange-Traded Funds (“ETF’s”) – now
12 in total with over US$2 billion in AUM;
• Receiving approval for our wholly-owned China fund management
company license;
• Growing our relationship with Equitable, in support of our Private
Markets platform, through a second US$10 billion commitment;
• Executing towards the planned Joint Venture between Bernstein
Research Services, our sell-side equity research business, and
partner Société Générale.
These accomplishments are all made possible through our talented
teams, supported by a robust and resilient culture which remains the
bedrock of our firm. Every colleague plays a role in keeping what makes
AB special front and center. We view our culture as highly inclusive
and team oriented, which drives intellectual growth and a feeling of
professional fulfillment, all anchored to the goal of serving our clients.
Looking ahead, U.S money market funds entered 2024 at a record
US$6 trillion in AUM, some of which we expect will migrate to higher-
return opportunities as the interest rate cycle turns over later this year.
AB is well positioned to respond to our clients’ changing needs and
preferences, by delivering high quality investment services across
regions and asset classes.
2023 Market Overview
After struggling with higher inflation for two years, the global economy
made broad progress toward a more normalized environment in 2023.
While price pressures have not returned all the way to pre-pandemic
levels, inflation has come down meaningfully, providing welcome
relief to households suffering under the burden of increasing costs.
Most impressively, the progress on inflation came without significant
disruption to economic growth.
The combination of disinflationary progress and solid growth was most
evident in the US, where inflation ended the year within one percentage
point of the Federal Reserve’s 2.0% target and the economy
expanded by more than 3.0%, supported by a strong labor market.
Encouragingly, the Federal Reserve appears poised to lower borrowing
costs this year, which would play an important role in keeping the
economy on track. Central banks around the world are also likely
to lower borrowing costs in 2024, which should allow for economic
growth to continue. That combination has been positive for financial
market performance historically and so far this cycle.
The main risk to financial markets is if the improvement in inflation
proves ephemeral, which could drive higher yields along with financial
market volatility and increase the odds of a harder economic landing.
To be sure, geopolitical risks remain elevated with several conflicts
and significant elections in many majoa r economies, not least the
United States.
Executing Our Strategy
We continue to execute on our strategy “Deliver, Diversify and
Expand Responsibly, with Equitable.”
Delivering strong investment performance is a key priority. In 2023,
our fixed-income performance strengthened, with over 70% of fixed
income AUM outperforming in each of the 1-, 3-, and 5-year periods.
Concurrently, equity performance lagged, with 26%, 45% and 42%
of equity AUM outperforming over the 1-, 3-, and 5-year periods,
respectively. This was driven by stock selection, combined with a
disproportionate share of large cap index returns concentrated within
the “Magnificent Seven” companies.1
ACTIVE NET INFLOWS
Annualized Organic Growth Rates for Active Net Inflows
Organic Growth Averages: (FY19-FY23) & (FY21-FY23) (percent)
2.7
1.4
1.8
0.7
(1.5)
(2.4)
(5.7)
(5.6)
10.0
8.7
1.7
1.9
1.8
(0.2)
2.8
1.3
Total Active AUM AOG
Active Equities AOG
Active Fixed Income AOG
Active Alts/MAS AOG*
£ AB (FY19–FY23) £ AB (FY21–FY23) £ Peer Average (FY19–FY23)† £ Peer Average (FY21–FY23)†
Note: Total Active AUM and Active Fixed Income Average Annualized Growth excludes $11.8 billion in low-fee AXA terminated mandates during 2020, $1.3 billion in
2021 and $2.3 billion in 2022
*Includes peers with continuous Alts/MAS exposure over each corresponding period
†Peers: AMG, BEN, BLK, IVZ, JHG & TROW
1 “Magnificant Seven” includes Apple, Amazon, Alphabet, Meta Platforms, Microsoft, NVIDIA and Tesla, perceived as the main beneficiaries of the Artificial Intelligence revolution.
While we are not immune to industrywide headwinds, AB posted strong
active fixed income organic growth of 5% in 2023, outperforming
the peer average by 400 basis points. AB’s overall active organic
attrition of (0.9%) compared favorably to the peer group average of
(2.3%). Over the last five years, AB’s average active organic growth has
outperformed the peers by an average of 500 basis points, at 2.7% as
compared with the peer average of (2.4%).
(“NAV”AA ) lending strategy in our Private Credit business, supported by a
commitment from Equitable Holdings.
This is another example of our strong partnership with Equitable,
which continues to bear fruit, with Equitable having deployed 90% of
its initial US$10 billion allocation of permanent capital to our private
alternatives and private placements platform by year-end.
Importantly, we continued to diversify our offerings by maintaining a
focus on product innovation, with new investment strategy launches,
including: Security of the Future, US High Dividend ETF, Disruptors ETF,
and several taxable and municipal fixed income ETFs.
Importantly, Equitable committed to a second US$10 billion
permanent capital commitment at its May 2023 Investor Day. This
mutually beneficial program increases the higher-yielding element
in their General Account, accelerating the growth of our higher-fee,
longer-dated private alternatives platform.
Additionally, we launched multiple new vehicles for existing
investment strategies in response to customer demand, across
several geographies.
Our responsible investing offerings continued to grow, with our
goals-based Portfolios with Purpose platform totaling US$27.8 billion
of AUM at year-end, up 17% versus the prior year. Organic growth was
led by AB CarVal’s innovative Clean Energy offering.
AB’s Private Markets platform increased to US$61 billion, up 9%
year-over-year, reflecting a diverse and relevant suite of services for
Institutional, Retail and Private Wealth clients. 2023 net inflows were
led by Renewable Energy, Residential Mortgage Loans and European
Commercial Real Estate Debt. We announced a new Net Asset Value
In the Retail channel, annual sales of US$71 billion rose by 8% versus
the prior year. Net inflows of US$3.7 billion were driven by strength in
taxable fixed income (9% organic growth) and municipals (19% organic
growth). US Retail grew organically for the 5th consecutive year, a
testament to the strength of deep client relationships built through the
focused efforts of our talented salesforce.
In our Institutional channel, 2023 sales were US$12 billion, down
from strong 2022 levels which reflected US$16 billion in custom
target-date fundings. Reflecting our investment towards growing our
third-party insurance platform, our Insurance asset management team
was awarded its second straight Investment Team of the Year award
by Insurance Asset Risk, and we were also recognized as the inaugural
Alternatives Manager of the Year by the same publication.
ADJUSTED ANNUAL OPERATING MARGIN
% Percentages
35
30
25
25.4
20
+280 b.p.
28.2
2016
2017
2018
2019
2020
2021
2022
2023
Our Institutional channel pipeline was US$12 billion at year-end, with
a fee rate more than three times the channel average, driven by private
alternatives, which comprise more than 80% of the annualized fee rate.
In Private Wealth, gross sales of US$18.6 billion increased 6%
year over year. Net inflows were positive for the third straight year.
Alternative capital raises remained healthy at US$1.9 billion, led by
secondaries, real estate equity and private credit.
Managing Profitability
For the full year, our adjusted operating margin was 28.2%, down 70
basis points from the prior year, with adjusted earnings and unitholder
distributions down 9% versus the prior year. Financial comparisons to
the prior year improved in the second half of 2023, reflecting higher
average AUM levels driven by the market recovery. We continue to
identify and manage expenses diligently that are in our control as we
seek to improve our margin profile.
To that end, our Nashville relocation once again contributed to AB’s
earnings in 2023 and is forecast to do so again in 2024, growing to an
expected annual contribution of approximately US$75 million by 2025.
Combined with execution of the Bernstein Research Services Joint
Venture, anticipated in the first half of 2024, and growth in our Private
Alternatives segment, we foresee a possible 350-500 basis point
improvement in our annual adjusted operating margin through 2027,
assuming stable markets.
As a partnership, we continue to benefit from a low tax rate of
approximately 12%, attractive relative to corporate peers. And we
continue to pay out 100% of our adjusted operating income, or
US$2.69 per unit in 2023, a robust yield of 8%.
Over the last five years, AB has generated a total shareholder return
of 72%, versus the peer group average of 64% and the S&P 500 of
107%.2 Our reinvested distribution has comprised well over half of
AB’s total shareholder return over this period.
2 Peer group includes Affiliated Managers Group, Franklin Resources, BlackRock, Janus Henderson Investors, Invesco and T. Rowe Price.
People and Culture
In 2023, AB continued to prioritize advancing our employee
experience, with a focus on wellness. We committed to delivering both
programming and policies in several key areas to meet this need. For
example, we launched a “Well-Being Through the Decades” webinar
series to encourage a proactive management of one’s own health goals.
We improved our parental leave policy and we supported working
mothers with meaningful new benefits.
We remain invested in developing our managers, as we know the
quality of the employee and manager relationship is the largest
driver of engagement and retention. To meet that need, we offered
traditional classroom management development training, coaching,
and mentoring globally. We continued to educate our leaders on the
importance of our firm leadership expectations and how they serve
as a foundational guide for the way we manage the firm and drive top
performance from our people.
Our commitment to Diversity, Equity and Inclusion was reflected in
increasing education and support to address emerging topics, retaining
and developing key diverse talent, and scaling infrastructure for a more
global model.
As employee needs and expectations evolve, providing platforms
for education and productive discourse becomes even more critical.
We hosted an SVP Women’s Leadership Summit, geographically
expanded our Career Catalyst internal coaching program, and
launched AB ADAPT, our newest Employee Resource Group (ERG) for
those with disabilities.
TOTAL SHAREHOLDER RETURN
Total Shareholder Return* (12/31/2018 -12/31/2023)
t
n
e
c
r
e
P
120
100
80
60
40
20
0
–20
–40
72%
58%
AB
107%
64%
Peer Average
S&P 500
n Dividend Return*
n Price Return
Peer average includes: Affiliated Managers Group, Franklin Resources, Blackrock, Janus Henderson, Invesco, T. Rowe Price
*Assumes distributions reinvested during 12/31/2018 – 12/31/2023 period
Source: NasdaqIR
PARTING THOUGHTS
In 2023, the Board thanked Kristi Matus for her service. Our Board remains highly engaged,
providing valuable insight based on diverse and relevant experiences and backgrounds.
Although certain segments of our industry are mature, we remain energized by the promise for
those firms which can anticipate and adapt to meet global clients’ changing needs. To that end,
we are focused on executing well against our key growth objectives, which provide a distinct
opportunity for AB.
On behalf of our employees, I thank you for your continued trust in our firm.
Sincerely,
Seth P. Bernstein,
President and Chief Executive Officer
AllianceBernstein Holding L.P.
Form 10-K 2023
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the Fiscal Year Ended December 31, 2023
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from
to
Commission file number 001-09818
ALLIANCEBERNSTEIN HOLDING L.P.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation or organization)
13-3434400
(I.R.S. Employer Identification No.)
501 Commerce Street, Nashville, TN
(Address of principal executive offices)
37203
(Zip Code)
Registrant’s telephone number, including area code: (615) 622-0000
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class
Units Rep. Assignments of Beneficial
Ownership of LP Interests in AB
Holding ("Units")
Trading Symbol
AB
Name of Each Exchange on Which Registered
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to
submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting
company, or an emerging growth company. See definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and
“emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer ☒
Emerging growth company ☐
Accelerated filer ☐
Non-accelerated filer ☐
Smaller reporting company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its
internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting
firm that prepared or issued its audit report. Yes ☒ No ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒
If securities are registered pursuant to Section 12 (b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based
compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b)). ☐☐
The aggregate market value of the units representing assignments of beneficial ownership of limited partnership interests held by non-affiliates
computed by reference to the price at which such units were last sold on the New York Stock Exchange as of June 30, 2023 was approximately
$3.1 billion.
The number of units representing assignments of beneficial ownership of limited partnership interests outstanding as of December 31, 2023
was 114,436,091. (This figure includes 100,000 general partnership units having economic interests equivalent to the economic interests of the
units representing assignments of beneficial ownership of limited partnership interests.)
DOCUMENTS INCORPORATED BY REFERENCE
This Form 10-K does not incorporate any document by reference.
Table of Contents
Glossary of Certain Defined Terms
Part I
Item 1.
Business
Item 1A. Risk Factors
Item 1B. Unresolved Staff Comments
Item 1C. Cybersecurity
Item 2.
Properties
Item 3.
Legal Proceedings
Item 4.
Mine Safety Disclosures
Part II
Item 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities
Item 6.
Reserved
Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Executive Overview
Market Environment
AB Holding
AB
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
AB Holding
AB
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 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Part III
Part IV
Item 10. Directors, Executive Officers and Corporate Governance
Item 11.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related
Executive Compensation
Stockholder Matters
Item 13. Certain Relationships and Related Transactions, and Director Independence
Item 14. Principal Accounting Fees and Services
Item 15.
Exhibits, Financial Statement Schedules
Item 16.
Form 10-K Summary
Signatures
ii
1
17
27
27
28
29
29
30
32
32
32
32
34
36
58
58
58
60
127
127
128
128
129
144
175
179
180
181
183
184
2023 Annual Report
i
Glossary of Certain Defined Terms
Equitable Financial Equitable Financial Life Insurance
Company (New York stock life
insurance company), a subsidiary of
Equitable Holdings.
Equitable Holdings
or EQH
Equitable Holdings, Inc. (Delaware
corporation) and its subsidiaries
other than AB and its subsidiaries.
Exchange Act
the Securities Exchange Act of 1934,
as amended.
ERISA
GAAP
the Employee Retirement Income
Security Act of 1974, as amended.
U.S. Generally Accepted
Accounting Principles.
AllianceBernstein Corporation
(Delaware corporation), the general
partner of AB and AB Holding and a
subsidiary of Equitable Holdings,
and, where appropriate, ACMC, LLC,
its predecessor.
Investment
Advisers Act
the Investment Advisers Act of 1940,
as amended.
Investment
Company Act
the Investment Company Act of
1940, as amended.
NYSE
the New York Stock Exchange, Inc.
Partnerships
AB and AB Holding together.
SEC
the United States Securities and
Exchange Commission.
Securities Act
the Securities Act of 1933,
as amended.
AB Holding Units units representing assignments of
General Partner
AB
AB Holding
AB Holding
Partnership
Agreement
AllianceBernstein L.P. (Delaware
limited partnership formerly known as
Alliance Capital Management L.P.,
“Alliance Capital”), the operating
partnership, and its subsidiaries and,
where appropriate, its predecessors,
AB Holding and ACMC, Inc. and their
respective subsidiaries.
AllianceBernstein Holding L.P.
(Delaware limited partnership).
the Amended and Restated
Agreement of Limited Partnership of
AB Holding, dated as of
October 29, 1999 and as amended
February 24, 2006.
AB Partnership
Agreement
beneficial ownership of limited
partnership interest in AB Holding.
the Amended and Restated
Agreement of Limited Partnership of
AB, dated as of October 29, 1999 and
as amended February 24, 2006.
AB Units
units of limited partnership interest
in AB.
AUM
AB's assets under management.
Bernstein
Transaction
Equitable
America
AB's acquisition of the business and
assets of SCB Inc., formerly known as
Sanford C. Bernstein Inc., and the
related assumption of the liabilities of
that business, completed on
October 2, 2000.
Equitable Financial Insurance
Company of America (f/k/a MONY
Life Insurance Company of America,
an Arizona corporation), a subsidiary
of Equitable Holdings.
ii
AllianceBernstein
Part I
Item 1. Business
” and “ou“
The words “we““
employees. Similarly,l
between AB Holding and AB,B we identify which company is being discussed. Cross-references are in italics.
to AB Holding and AB and its subsidiaries,s or to their offiff cers and
” refer to both AB Holding and AB. Where the context requires distinguishing
r” in this Form 10-K refer collectivelyl
the words “co“ mpany” and “fi““ rmii
We use “gl“ obal” in this Form 10-K to refer to all nations, including the United States;s we use “in“
nations other than the United States.
ternatiott nal” or “no“
n-U.S.” to refer to
ergir ngii marketkk stt ” in this Form 10-K to refer to countries included in the Morgan Stanleye Capital International (“MS“
We use “em“
CI”)
emergir ng markets index, which include, as of December 31, 2023: Brazil, Chile,e China, Colombia, Czech Republic,c Egypgg t, Greece,
Hungary,r
India, Indonesia, Korea, Kuwait,tt Malaysia, Mexico,o Peru,u Philippines, Poland,dd Qatar, Saudi Arabia, South Afriff ca, Taiwan,
Thailand,dd Turkey and United Arab Emirates.
Clients
We provide diversified investment management, research and related services globally to a broad range of clients through our
three buy-side distribution channels: Institutions, Retail and Private Wealth Management, and our sell-side business, Bernstein
Research Services. See “Distribution Channels” in this Item 1 for additional information.
As of December 31, 2023, 2022 and 2021, our AUM were approximately $725 billion, $646 billion and $779 billion, respectively,
and our net revenues were approximately $4.2 billion, $4.1 billion and $4.4 billion, respectively. EQH (our parent company)yy and
its subsidiaries, whose AUM consist primarily of fixed income investments, is our largest client. Our EQH affiliates represented
approximately 16%, 16% and 17% of our AUM as of December 31, 2023, 2022 and 2021, and we earned approximately 5%, 4%
and 4% of our net revenues from services we provided to them in each of 2023, 2022 and 2021, respectively.
Assets Under Management (AUM)
($ billions)
Net Revenues
($ billions)
See “Distribution Channels” below and “Assets Under Management” and “Net Revenues” in Item 7 for additional information
regarding our AUM and net revenues.
Generally, we are compensated for our investment services on the basis of investment advisory and services fees calculated as
a percentage of AUM. For additional information about our investment advisory and services fees, including performance-
based fees, see “Risk Factors” in Item 1A and “Net Revenues – Investment Advisory and Services Fees” in Item 7.
Research
Our high-quality, in-depth research is the foundation of our asset management and private wealth management businesses. We
believe that our global team of research professionals, whose disciplines include economic, fundamental equity, fixed income
and quantitative research, gives us a competitive advantage in achieving investment success for our clients. We also have
experts focused on multi-asset strategies, wealth management, environmental, social and governance (“ESG”), and
alternative investments.
2023 Annual Report
1
Part I
Purpose, Values and Corporate Responsibility
At AB, we pursue insight that unlocks opportunity. This is our firm's purpose. Together with our firm's mission and values, which
we have described below,w our purpose forms the foundation of corporate responsibility at AB.
AB's mission is to help our clients define and achieve their investment goals, explicitly stating what we do to unlock opportunity
for our clients. As an active manager, our differentiated insights drive our ability to deliver alpha and design innovative
investment solutions. Our clients and their needs come first, always.
Our values provide a framework for the behaviors and actions that create our strong culture and enable us to meet our clients'
needs. Each value inspires us to be better:
• We invest in one another, meaning that we have a strong organizational culture in which diversity is celebrated and
mentorship is critical to our success.
• We strive for distinctive knowledge, meaning that we collaboratively identify creative solutions to clients'
investment
challenges through our expertise in a wide range of investment disciplines.
• We speak with courage and conviction, which informs how we engage with our AB colleagues, clients and others.
• We act with integrity — always, which is the bedrock of our relationships and drives us to avoid activities that could create
potential conflicts of interest or distract us from our singular focus to provide asset management and research to our
clients.
As noted above, we challenge ourselves to become a better version of AB. We are committed to being a responsible firm and
striving to model the behavior that we expect from the companies in which we invest. This means, in part, giving back to the
communities in which we work, and reducing our environmental footprint. Additionally, by promoting diversity, equity and
inclusion, we are afforded different perspectives and ways of thinking, which can lead to better outcomes for our clients (See
Diversity,t Equityt and Inclusion below in this Item 1).
Also, striving to be a good corporate citizen gives us a richer perspective for evaluating other companies. Our investors —
research analysts and portfolio managers — understand the companies and industries they cover in-depth. And, we continue to
invest in technology and innovation to further enable our investment teams to formalize their evaluations and share insights
from our engagements with other companies.
We provide additional information in this regard in the AB Responsibility Report, which can be found under “Responsibility -
tein.com. And, we have described our firm's governance structure, including our Board and its
Overview” on www.alliancebernsrr
committees, in Item 10 of this Form 10-K.
2
AllianceBernstein
Part I
Investment Philosophy
We believe that by using differentiated research insights and a disciplined process to build high active share portfolios, we can
achieve strong investment results for our clients over time. We are fully invested in delivering better outcomes for our clients.
Key to this philosophy is developing and integrating research on material ESG issues, as well as our approach to engagement,
when in the best interest of our clients. Our global research network, intellectual curiosity and collaborative culture allow us to
advance clients' investment objectives, whether our clients are seeking idiosyncratic alpha, total return, downside mitigation, or
sustainability and impact-focused outcomes.
Our investment services include expertise in:
• Actively managed equity strategies across global and regional universes, as well as capitalization ranges, concentration
ranges and investment strategies, including value, growth and core equities;
• Actively managed traditional and unconstrained fixed income strategies, including taxable and tax-exempt strategies;
• Actively managed alternative investments, including fundamental and systematically-driven hedge funds, fund of hedge
funds and direct assets (e.g., direct lending, real estate debt and private equity);
• Portfolios with Purpose, including Sustainable, Impact and Responsible+ (Climate-Conscious and ESG leaders) equity, fixed
income and multi-asset strategies that address our clients' desire to invest their capital with a dedicated ESG focus, while
pursuing strong investment returns;
• Multi-asset services and solutions,
including dynamic asset allocation, customized target-date funds and target-risk
funds; and
• Passively managed equity and fixed income strategies, including index, ESG index and enhanced index strategies.
Our AUM by client domicile and investment service as of December 31, 2023, 2022 and 2021 are as follows:
AUM by Client Domicile
($ in billions)
AUM by Investment Service
($ in billions)
2023 Annual Report
3
Part I
Distribution Channels
Institutions
We offer to our institutional clients, which include private and public pension plans, foundations and endowments, insurance
companies, central banks and governments worldwide, and EQH and its subsidiaries, separately managed accounts,
sub-advisory relationships, structured products, collective investment trusts, mutual funds, hedge funds and other investment
vehicles (“Institutional Services”).
We manage the assets of our institutional clients pursuant to written investment management agreements or other
arrangements, which generally are terminable at any time or upon relatively short notice by either party. In general, our written
investment management agreements may not be assigned without the client's consent. For information about our institutional
investment advisory and services fees, including performance-based fees, see “Risk Factors” in Item 1A and “Net Revenues –
Investment Advisory and Services Fees” in Item 7.
EQH and its subsidiaries constitute our largest institutional client. EQH and its subsidiaries combined AUM accounted for
approximately 25%, 24% and 25% of our institutional AUM as of December 31, 2023, 2022 and 2021, respectively, and
approximately 22%, 19% and 18% of our institutional revenues for 2023, 2022 and 2021, respectively. No single institutional
client other than EQH and its respective subsidiaries accounted for more than approximately 1% of our net revenues for the
year ended December 31, 2023.
EQH and Subsidiaries as a % of our Institutional AUM
EQH and Subsidiaries as a % of our Institutional Revenues
4
AllianceBernstein
As of December 31, 2023, 2022 and 2021, Institutional Services represented approximately 44%, 46% and 43%, respectively, of
our AUM, and the fees we earned from providing these services represented approximately 16%, 16% and 13%, respectively, of
our net revenues for each of those years. Our AUM and revenues are as follows:
Institutional Services Assets Under Management
(by Investment Service)
Part I
Equity:
Equity Actively Managed
Equity Passively Managed(1)
Total Equity
U.S.
Global & Non-U.S.
Total Equity
Fixed Income:
Fixed Income Taxable
Fixed Income Tax-Exempt
Fixed Income Passively Managed(1)
Total Fixed Income
U.S.
Global & Non-U.S.
Total Fixed Income
Alternatives/Multi-Asset Solutions(2):
U.S.
Global & Non-U.S.
Total Alternatives/Multi-Asset Solutions
Total:
U.S.
Global & Non-U.S.
Total
Affiliated - EQH
Non-affiliated
Total
Years Ended December 31
% Change
2023
2022
2021
2023-22
2022-21
(in millions)
$
59,423
$
55,731
$
73,726
6.6%
(24.4%)
23,630
83,053
40,930
42,123
83,053
21,062
76,793
35,428
41,365
76,793
28,995
102,721
47,409
55,312
102,721
126,350
121,871
155,940
1,317
306
849
192
127,973
122,912
95,808
32,165
88,800
34,112
127,973
122,912
13,810
92,288
106,098
12,873
84,703
97,576
1,108
224
157,272
110,312
46,960
157,272
7,697
69,390
77,087
150,548
166,576
137,101
160,180
165,418
171,662
$ 317,124
$ 297,281
$ 337,080
78,942
238,182
70,924
226,357
84,096
252,984
$ 317,124
$ 297,281
$ 337,080
12.2
8.2
15.5
1.8
8.2
3.7
55.1
59.4
4.1
7.9
(5.7)
4.1
7.3
9.0
8.7
9.8
4.0
6.7
11.3
5.2
6.7
(27.4)
(25.2)
(25.3)
(25.2)
(25.2)
(21.8)
(23.4)
(14.3)
(21.8)
(19.5)
(27.4)
(21.8)
67.2
22.1
26.6
(17.1)
(6.7)
(11.8)
(15.7)
(10.5)
(11.8)
(1)
(2)
Includes index and enhanced index services.
Includes certain multi-asset solutions and services not included in equity or fixed income services.
2023 Annual Report
5
Part I
Revenues from Institutional Services
(by Investment Service)
Equity:
Equity Actively Managed
Equity Passively Managed(1)
Total Equity
U.S.
Global & Non-U.S.
Total Equity
Fixed Income:
Fixed Income Taxable
Fixed Income Tax-Exempt
Fixed Income Passively Managed(1)
Fixed Income Servicing(2)
Total Fixed Income
U.S.
Global & Non-U.S.
Total Fixed Income
Alternatives/Multi-Asset Solutions(3):
U.S.
Global & Non-U.S.
Total Alternatives/Multi-Asset Solutions
Total Investment Advisory and Services Fees:
U.S.
Global & Non-U.S.
Total
Distribution Revenues
Shareholder Servicing Fees
Total
Affiliated - EQH
Non-affiliated
Total
Years Ended December 31
% Change
2023
2022
2021
2023-22
2022-21
(in thousands)
$ 197,822
$ 220,917
$ 240,049
(10.5%)
(8.0%)
4,115
201,937
75,861
126,076
201,937
4,910
225,827
80,908
144,919
225,827
6,119
246,168
97,522
148,646
246,168
180,625
189,679
199,866
1,300
580
20,149
202,654
135,560
67,094
202,654
94,488
166,964
261,452
305,909
360,134
666,043
250
377
1,182
425
15,991
207,277
128,392
78,885
207,277
114,982
111,202
226,184
324,282
335,004
659,286
268
429
1,356
105
14,738
216,065
124,004
92,061
216,065
64,646
59,179
123,825
286,172
299,886
586,058
474
485
$ 666,670
$ 659,983
$ 587,017
144,523
522,147
125,229
534,754
105,415
481,602
$ 666,670
$ 659,983
$ 587,017
(16.2)
(10.6)
(6.2)
(13.0)
(10.6)
(4.8)
10.0
36.5
26.0
(2.2)
5.6
(14.9)
(2.2)
(17.8)
50.1
15.6
(5.7)
7.5
1.0
(6.7)
(12.1)
1.0
15.4
(2.4)
1.0
(19.8)
(8.3)
(17.0)
(2.5)
(8.3)
(5.1)
(12.8)
n/m
8.5
(4.1)
3.5
(14.3)
(4.1)
77.9
87.9
82.7
13.3
11.7
12.5
(43.5)
(11.5)
12.4
18.8
11.0
12.4
(1)
Includes index and enhanced index services.
(2) Fixed Income Servicing includes advisory-related services fees that are not based on AUM, including derivative transaction fees, capital
purchase program-related advisory services and other fixed income advisory services.
(3)
Includes certain multi-asset solutions and services not included in equity or fixed income services.
6
AllianceBernstein
Part I
Retail
We provide investment management and related services to a wide variety of individual retail investors globally through retail
mutual funds we sponsor, mutual fund sub-advisory relationships, separately-managed account programs (see below), and
other investment vehicles (“Retail Products and Services”).
intermediaries, including broker-dealers,
We distribute our Retail Products and Services through financial
insurance sales
representatives, banks, registered investment advisers and financial planners. These products and services include open-end
and closed-end funds that are either (i) registered as investment companies under the Investment Company Act (“U.S. Funds”),
or (ii) not registered under the Investment Company Act and generally not offered to U.S. persons (“Non-U.S. Funds” and,
collectively with the U.S. Funds, “AB Funds”). They also include separately-managed account programs, which are sponsored by
financial intermediaries and generally charge an all-inclusive fee covering investment management, trade execution, asset
allocation, and custodial and administrative services. In addition, we provide distribution, shareholder servicing, transfer agency
services and administrative services for our Retail Products and Services. See “Net Revenues – Investment Advisory and
Services Fees” in Item 7 for information about our retail investment advisory and services fees. See Note 2 to AB’s consolidated
financial statements in Item 8 for a discussion of the commissions we pay to financial intermediaries in connection with the
sale of open-end AB Funds.
Fees paid by the U.S. Funds are reflected in the applicable investment management agreement, which generally must be
approved annually by the board of directors or trustees of those funds, by a majority vote of the independent directors or
trustees. Increases in these fees must be approved by fund shareholders; decreases need not be, including any decreases
implemented by a fund’s directors or trustees. In general, each investment management agreement with the U.S. Funds
provides for termination by either party, at any time, upon 60 days’ notice.
Fees paid by Non-U.S. Funds are reflected in management agreements that continue until they are terminated. Increases in
these fees generally must be approved by the relevant regulatory authority, depending on the domicile and structure of the fund,
and Non-U.S. Fund shareholders must be given advance notice of any fee increases.
The mutual funds we sub-advise for EQH and its subsidiaries constitute our largest retail client. EQH and its subsidiaries
accounted for approximately 14% of our retail AUM as of December 31, 2023, 2022 and 2021 and approximately 1% of our retail
net revenues for the years ended December 31, 2023, 2022 and 2021.
Most open-end U.S. Funds have adopted a plan under Rule 12b-1 of the Investment Company Act that allows the fund to pay,
out of assets of the fund, distribution and service fees for the distribution and sale of its shares. The open-end U.S. Funds have
entered into such agreements with us, and we have entered into selling and distribution agreements pursuant to which we pay
sales commissions to the financial intermediaries that distribute our open-end U.S. Funds. These agreements are terminable by
either party upon notice (generally 30 days) and do not obligate the financial intermediary to sell any specific amount of
fund shares.
As of December 31, 2023, retail U.S. Fund AUM were approximately $66 billion, or 23% of retail AUM, as compared to $54
billion, or 22%, as of December 31, 2022, and $73 billion, or 23%, as of December 31, 2021. Retail non-U.S. Fund AUM, as of
December 31, 2023, totaled $107 billion, or 37% of retail AUM, as compared to $96 billion, or 39%, as of December 31, 2022, and
$130 billion, or 41%, as of December 31, 2021.
2023 Annual Report
7
Part I
Our Retail Services represented approximately 39%, 38% and 41% of our AUM as of December 31, 2023, 2022 and 2021,
respectively, and the fees we earned from providing these services represented approximately 46%, 49% and 50% of our net
revenues for the years ended December 31, 2023, 2022 and 2021, respectively. Our AUM and revenues are as follows:
Retail Services Assets Under Management
(by Investment Service)
Equity:
Equity Actively Managed
Equity Passively Managed(1)
Total Equity
U.S.
Global & Non-U.S.
Total Equity
Fixed Income:
Fixed Income Taxable
Fixed Income Tax-Exempt
Fixed Income Passively Managed(1)
Total Fixed Income
U.S.
Global & Non-U.S.
Total Fixed Income
Alternatives/Multi-Asset Solutions(2):
U.S.
Global & Non-U.S.
Total Alternatives/Multi-Asset Solutions
Total:
U.S.
Global & Non-U.S.
Total
Affiliated - EQH
Non-affiliated
Total
Years Ended December 31
% Change
2023
2022
2021
2023-22
2022-21
(in millions)
$ 137,702
$ 116,235
$ 154,200
18.5%
(24.6%)
34,582
172,284
141,721
30,563
172,284
64,051
33,014
11,066
108,131
52,683
55,448
108,131
2,724
3,636
6,360
30,445
146,680
118,547
28,133
146,680
53,995
26,714
9,206
89,915
41,151
48,764
89,915
2,697
3,594
6,291
40,821
195,021
152,106
42,915
195,021
75,813
29,009
12,762
117,584
46,361
71,223
117,584
3,595
3,718
7,313
197,128
89,647
162,395
80,491
202,062
117,856
13.6
17.5
19.5
8.6
17.5
18.6
23.6
20.2
20.3
28.0
13.7
20.3
1.0
1.2
1.1
21.4
11.4
(25.4)
(24.8)
(22.1)
(34.4)
(24.8)
(28.8)
(7.9)
(27.9)
(23.5)
(11.2)
(31.5)
(23.5)
(25.0)
(3.3)
(14.0)
(19.6)
(31.7)
$ 286,775
$ 242,886
$ 319,918
18.1%
(24.1%)
40,516
246,259
34,110
208,776
44,417
275,501
18.8
18.0
(23.2)
(24.2)
$ 286,775
$ 242,886
$ 319,918
18.1%
(24.1%)
(1)
(2)
Includes index and enhanced index services.
Includes certain multi-asset solutions and services not included in equity or fixed income services
8
AllianceBernstein
Revenues from Retail Services
(by Investment Service)
Equity:
Equity Actively Managed
Equity Passively Managed(1)
Total Equity
U.S.
Global & Non-U.S.
Total Equity
Fixed Income:
Fixed Income Taxable
Fixed Income Tax-Exempt
Fixed Income Passively Managed(1)
Total Fixed Income
U.S.
Global & Non-U.S.
Total Fixed Income
Alternatives/Multi-Asset Solutions(2):
U.S.
Global & Non-U.S.
Total Alternatives/Multi-Asset Solutions
Total Investment Advisory and Services Fees:
U.S.
Global & Non-U.S.
Consolidated company-sponsored
investment funds
Total
Distribution Revenues
Shareholder Servicing Fees
Total
Affiliated - EQH
Non-affiliated
Total
Part I
Years Ended December 31
% Change
2023
2022
2021
2023-22
2022-21
n thousands)
$ 732,186
$ 746,889
$ 766,578
(2.0%)
(2.6%)
11,283
743,469
556,751
186,718
743,469
12,870
759,759
558,319
201,440
759,759
14,773
781,351
556,398
224,953
781,351
373,659
390,708
517,327
88,128
12,247
474,034
118,288
355,746
474,034
44,273
13,499
57,772
89,450
13,682
493,840
119,053
374,787
493,840
55,356
13,484
68,840
84,945
12,994
615,266
115,248
500,018
615,266
81,872
13,117
94,989
719,312
555,963
732,728
589,711
753,518
738,086
836
770
1,243
1,276,111
1,323,209
1,492,847
569,485
80,424
594,431
83,268
644,125
86,857
(12.3)
(2.1)
(0.3)
(7.3)
(2.1)
(4.4)
(1.5)
(10.5)
(4.0)
(0.6)
(5.1)
(4.0)
(20.0)
0.1
(16.1)
(1.8)
(5.7)
8.6
(3.6)
(4.2)
(3.4)
(12.9)
(2.8)
0.3
(10.5)
(2.8)
(24.5)
5.3
5.3
(19.7)
3.3
(25.0)
(19.7)
(32.4)
2.8
(27.5)
(2.8)
(20.1)
(38.1)
(11.4)
(7.7)
(4.1)
$1,926,020
$2,000,908
$2,223,829
(3.7%)
(10.0%)
21,842
23,836
28,334
1,904,178
1,977,072
2,195,495
(8.4)
(3.7)
(15.9)
(9.9)
$1,926,020
$2,000,908
$2,223,829
(3.7%)
(10.0%)
(1)
(2)
Includes index and enhanced index services.
Includes certain multi-asset solutions and services not included in equity or fixed income services.
2023 Annual Report
9
Part I
Private Wealth Management
We partner with our clients, embracing innovation and research to address increasingly complex challenges. Our clients include
high-net-worth individuals and families who have created generational wealth as successful business owners, athletes,
entertainers, corporate executives and private practice owners. We also provide investment and wealth advice to foundations
and endowments, family offices and other entities. Our flexible and extensive investment platform offers a range of
solutions, including separately-managed accounts, hedge funds, mutual funds and other investment vehicles, tailored to meet
each distinct client's needs. Our investment platform is complimented with a wealth platform that includes complex tax and
estate planning, pre-IPO and pre-transaction planning, multi-generational family engagement, and philanthropic advice in
addition to tailored approaches to meeting the unique needs of emerging wealth and multi-cultural demographics ("Private
Wealth Services").
We manage accounts pursuant to written investment advisory agreements, which generally are terminable at any time or upon
relatively short notice by any authorized party, and may not be assigned without the client's consent. For information about our
investment advisory and services fees, including performance-based fees, see “Risk Factors” in Item 1A and “Net Revenues –
Investment Advisory and Services Fees” in Item 7.
Our Private Wealth Services represented approximately 17%, 16% and 16% of our AUM as of December 31, 2023, 2022 and
2021, respectively. The fees we earned from providing these services represented approximately 25% of our net revenues for
2023, 2022 and 2021. Our AUM and revenues are as follows:
Private Wealth Services Assets Under Management
(by Investment Service)
Equity:
Equity Actively Managed
Equity Passively Managed(1)
Total Equity
U.S.
Global & Non-U.S.
Total Equity
Fixed Income:
Fixed Income Taxable
Fixed Income Tax-Exempt
Fixed Income Passively Managed(1)
Total Fixed Income
U.S.
Global & Non-U.S.
Total Fixed Income
Alternatives/Multi-Asset Solutions(2):
U.S.
Global & Non-U.S.
Total Alternatives/Multi-Asset Solutions
Total:
U.S.
Global & Non-U.S.
Total
Years Ended December 31
% Change
2023
2022
2021
2023-22
2022-21
(in millions)
$
50,351
$
45,977
$
59,709
3,851
54,202
33,639
20,563
54,202
18,201
26,760
2
44,963
40,166
4,797
44,963
6,923
15,167
22,090
80,728
40,527
2,304
48,281
28,014
20,267
48,281
14,391
24,953
2
39,346
34,764
4,582
39,346
6,607
12,021
18,628
69,385
36,870
1,764
61,473
35,014
26,459
61,473
14,567
26,929
231
41,727
36,166
5,561
41,727
6,926
11,446
18,372
78,106
43,466
9.5%
67.1%
12.3
20.1
1.5
12.3
26.5
7.2
—
14.3
15.5
4.7
14.3
4.8
26.2
18.6
16.3
9.9
(23.0%)
30.6%
(21.5)
(20.0)
(23.4)
(21.5)
(1.2)
(7.3)
(99.1)
(5.7)
(3.9)
(17.6)
(5.7)
(4.6)
5.0
1.4
(11.2)
(15.2)
$ 121,255
$ 106,255
$ 121,572
14.1%
(12.6%)
(1)
(2)
Includes index and enhanced index services.
Includes certain multi-asset solutions and services not included in equity or fixed income services.
10
AllianceBernstein
Part I
Revenues from Private Wealth Services
(by Investment Service)
Equity:
Equity Actively Managed
Equity Passively Managed(1)
Total Equity
U.S.
Global & Non-U.S.
Total Equity
Fixed Income:
Fixed Income Taxable
Fixed Income Tax-Exempt
Fixed Income Passively Managed(1)
Total Fixed Income
U.S.
Global & Non-U.S.
Total Fixed Income
Alternatives/Multi-Asset Solutions(2):
U.S.
Global & Non-U.S.
Total Alternatives/Multi-Asset Solutions
Total Investment Advisory and Services Fees:
U.S.
Global & Non-U.S.
Total
Distribution Revenues
Shareholder Servicing Fees
Total
Years Ended December 31
% Change
2023
2022
2021
2023-22
2022-21
(in thousands)
$ 502,673
$ 521,155
$ 584,455
(3.5%)
(10.8%)
14,711
517,384
304,456
212,928
517,384
70,887
124,438
13
195,338
164,601
30,737
195,338
223,518
97,074
320,592
8,700
529,855
295,235
234,620
529,855
66,851
125,123
1,804
193,778
159,411
34,367
193,778
195,666
69,245
264,911
4,780
589,235
325,154
264,081
589,235
72,404
130,391
2,634
205,429
167,402
38,027
205,429
249,432
71,524
320,956
692,575
340,739
650,311
338,232
741,987
373,632
1,033,314
988,543
1,115,619
16,528
3,001
12,496
2,964
7,641
2,882
69.1
(2.4)
3.1
(9.2)
(2.4)
6.0
(0.5)
(99.3)
0.8
3.3
(10.6)
0.8
14.2
40.2
21.0
6.5
0.7
4.5%
32.3
1.2
82.0
(10.1)
(9.2)
(11.2)
(10.1)
(7.7)
(4.0)
(31.5)
(5.7)
(4.8)
(9.6)
(5.7)
(21.6)
(3.2)
(17.5)
(12.4)
(9.5)
(11.4%)
63.5
2.8
$1,052,843
$1,004,003
$1,126,142
4.9%
(10.8%)
(1)
(2)
Includes index and enhanced index services.
Includes certain multi-asset solutions and services not included in equity or fixed income services.
2023 Annual Report
11
Part I
Bernstein Research Services
investors, such as mutual fund and hedge fund managers, pension funds and other institutional
We offer high-quality fundamental and quantitative research and trade execution services in equities and listed options to
investors
institutional
("Bernstein Research Services" or "BRS"). We serve our clients, which are based in major markets around the world, through our
trading professionals, who are primarily based in New York, London and Hong Kong, and our research analysts, who provide
fundamental company and industry research along with quantitative research into securities valuation and factors affecting
stock-price movements.
Additionally, we occasionally provide equity capital markets services to issuers of publicly traded securities, such as initial
public offerings and follow-on offerings, generally acting as co-manager in such offerings.
We earn revenues for providing investment research to, and executing brokerage transactions for, institutional clients. These
clients compensate us principally by directing us to execute brokerage transactions on their behalf, for which we earn
commissions, and to a lesser but increasing extent, by paying us directly for research through commission sharing agreements
or cash payments. Bernstein Research Services accounted for approximately 9%, 10% and 10% of our net revenues for the
years ended December 31, 2023, 2022 and 2021, respectively.
For information regarding trends in fee rates charged for brokerage transactions, see “Risk Factors” in Item 1A.
In the fourth quarter of 2022, AB and Société Générale (EURONEXT: GLE, “SocGen”), a leading European bank, announced plans
to form a joint venture combining their respective cash equities and research businesses. As a result, the BRS business has
been classified as held for sale on the consolidated statement of financial condition. For further discussion, see Note 24
Acquisitions and Divestitures to AB's consolidated financial statements in Item 8.
Our Bernstein Research Services revenues are as follows:
Revenues from Bernstein Research Services
Years Ended December 31
% Change
2023
2022
2021
2023-22
2022-21
(in thousands)
Bernstein Research Services
$ 386,142
$ 416,273
$ 452,017
(7.2%)
(7.9%)
Custody
Our U.S. based broker-dealer subsidiary acts as custodian for the majority of our Private Wealth Management AUM and some
of our Institutional AUM. Other custodian arrangements, directed by clients, include banks, trust companies, brokerage firms
and other financial institutions.
People Management
As a leading global investment management and research firm, we bring together a wide range of insights, expertise and
innovations to advance the interests of our clients around the world. The intellectual capital and distinctive knowledge of our
employees are collectively the most important assets of our firm, so the long-term sustainability and success of our firm is
heavily dependent on our people. In 2022, our human capital and administrative services teams became our "People" team, a
key acknowledgement of the central role they play in supporting our employees and advancing their work experience. We are
keenly focused on:
•
fostering an inclusive culture by incorporating diversity, equity and inclusion in all levels of our business;
• encouraging innovation;
• developing, retaining and recruiting high quality talent; and
• aligning employees’ incentives and risk taking with those of the firm.
As a result, we have a strong firm culture that helps us maximize performance and drive excellence. Further, our firm’s role as a
fiduciary is embedded in our culture. As a fiduciary, our firm’s primary objective is to act in our clients' best interests and help
them reach their financial goals.
Also, our Board of Directors (the "Board") and committees of the Board, particularly our Compensation and Workplace Practices
Committee, provide oversight into various matters affecting our people, including emerging people management risks and
strategies to mitigate our exposure to those risks. These collaborative efforts contribute to the overall framework that guides
how AB attracts, retains and develops a workforce that supports our values and strategic initiatives.
12
AllianceBernstein
Part I
Talent Acquisition and Development
AB seeks to achieve excellence in business, including investment performance, client service, and being defined as an employer
of choice. Across our global offices, we recruit and hire a workforce with diverse perspectives, backgrounds, and experiences.
Our talent acquisition strategy helps us serve both our clients and our workforce, hand in hand, at an optimal level. We engage
external organizations, including search firms and partnerships to assist in attracting and recruiting top talent at all levels. We
also leverage technology tools to source and evaluate candidates against our needs and we continue to prioritize attracting
diverse talent throughout our search activities. Outside of traditional recruiting, we believe investing in emerging talent is key to
our future planning. Both our internship and associate programs serve as robust pipelines for future leadership. The talent
acquisition process is our firm’s first impression to future employees, and we strive to provide all candidates with an excellent
experience. We focus heavily on high candidate engagement, an efficient offer process and sound onboarding to support
success. Investing in the continued development of our talent is ongoing through a blend of formal training, independent
learning, mentoring, and progressing assignments of responsibility. Internal mobility is championed throughout the firm. We are
highly committed to development and believe that top performers expect and deserve this ongoing investment.
Employee Engagement and Culture
We believe a workforce is most engaged when employees feel connected to our culture. We seek to create a workplace where
our people recognize the high importance of the work they do and enjoy the environment where the work gets done. By creating
a culture of excellence and accountability, we see employees thrive and contribute at their highest levels. It is important that our
employees are not only connected to our business but also to the communities in which we operate. We offer many
opportunities to volunteer, including our firm-wide philanthropic initiative, AB Gives Back. Coming out of the global pandemic,
we continue to prioritize the well-being of our staff through our global wellness programming, employee wellness groups, and
our hybrid work schedule. We believe that the flexibility to work remotely up to two days per week allows our employees to
maintain the important benefits of in-person collaboration while providing greater work-life balance. Measuring engagement is
key to understanding the views of the organization. We utilize AB Voice, a periodic engagement survey designed to measure
employee sentiment, to identify and address gaps that could impact productivity and retention.
Diversity, Equity and Inclusion
The past year has been a robust year for Diversity, Equity and Inclusion ("DEI") as we continued to focus on delivering equitable
positive outcomes across the various segments of our business: colleagues, clients and communities. These elements
included increasing education and support to address emerging topics, retaining and developing key diverse talent segments,
improving data capture and reporting capabilities and scaling infrastructure for a more global, distributed DEI and philanthropy
model. As DEI was again catapulted into the spotlight for a myriad of reasons, these elements have allowed for a more
intentional, consistent approach and have acted to accelerate the overall success of the strategy. Furthermore, our Board and
Board committees evaluate the overall effectiveness of our social responsibility policies, goals and programs and recommend
changes to management as necessary.
Over the past few years, we have seen an increase in social issues being brought to the forefront of national and global
conversations including in the workplace. In an effort to appropriately respond to such issues, we formed the Social Response
Committee (the "SRC"). The SRC has developed an approach to value-driven action that is rooted in broad evaluation of the
various issues integrated with AB’s purpose and values to maintain consistency in decision making. The SRC’s remit is to
surface, review and direct AB’s public or internal response to social issues that impact our business and our people.
Data is at the heart of a strong and agile DEI strategy and serves as an incredibly effective tool to best uncover gaps and
determine key focus areas. This year, we continued to closely monitor internal quantitative and qualitative metrics such as our
AB Voice employee engagement survey to measure progress and determine which populations may require additional focus
and development. We also leveraged external data sources such as the Investment Company Institute Asset Management D&I
benchmarking survey, Disability Equality Index and Coqual’s Asian/Asian American and Pacific Islander focused research to
maintain awareness of how we are performing relative to peers and competitors and ensure alignment with common practices.
As global demographics change and employee needs and expectations evolve, providing platforms for education and
productive discourse becomes even more critical. In 2023, we introduced several
intentional engagement and retention
initiatives including disability inclusion, expanded programs and focus groups. Our Employee Resource Groups which hosted
over 50 events, remain essential to AB’s commitment to inclusivity as they not only encourage a positive work culture, but also
contribute to business development and the professional development of employees worldwide.
2023 Annual Report
13
Part I
Compensation and Benefits
We recognize the role that a competitive total rewards offering plays in attracting and retaining top talent. Our pay practices
include base salaries, annual cash bonuses, and, for employees with total compensation over $300,000 annually, a long-term
incentive compensation award. These awards are generally denominated in restricted AB Holding Units. We utilize this
structure with intentionality to foster a stronger sense of ownership by employees, aligning their interests directly with the
interests of our Unitholders and indirectly with the interests of our clients. We are a meritocracy and pay for performance under
the auspices of providing compensation that is competitive and consistent with employee positions, skill levels, performance,
experience, knowledge, and geographic location. Annually, we engage a compensation consulting firm to independently
evaluate the accuracy of our executive compensation and to provide benchmarking against our industry peers. We also use
these insights to make pay decisions for the broader organization. Periodically, we engage outside counsel to conduct
privileged pay equity reviews. Pay is evaluated on an annual basis, with the firm providing merit-based and cost of living annual
base salary increases, as well as incentive compensation. This information is communicated to employees at year-end. On
occasion, pay is adjusted off-cycle due to internal transfer and/or promotion. Based on unique geographies, the firm makes
benefits available to all eligible employees, including health insurance, paid and unpaid leaves, a retirement plan, and life and
disability/accident coverage. We also offer a variety of voluntary benefits, ranging from adoption and surrogacy assistance to
tuition reimbursement, which allows employees to select the options that meet their individual needs.
Employees
As of December 31, 2023, our firm had 4,707 full-time employees, including 284 new hires onboarded during the first quarter of
2023, which were previously outsourced consultants in Pune, India. Net of these hires, headcount declined year-over-year, as
compared with 4,436 employees as of December 31, 2022.
As of December 31, 2023, our employees reflected the following characteristics and locations:
Region:
Americas
Asia ex Japan
EMEA
Japan
Grand Total(1)
Female
1,133
298
224
55
1,710
% Female
25%
7%
5%
1%
38%
Male
2,037
378
350
42
2,807
% Male
Grand Total
% of Total
45%
8%
8%
1%
62%
3,170
676
574
97
70%
15%
13%
2%
4,517
100%
(1) The table above reflects only those employees who have self-reported as male or female and as such does not reconcile to our total of
4,707 full-time employees as of December 31, 2023.
Information about our Executive Officers
Please refer to "Item 10. Directors, Executive Offiff cers and Corporate Governance" below for information relating to our firm's
executive officers.
Service Marks
We have registered a number of service marks with the U.S. Patent and Trademark Office and various foreign trademark
offices, including the mark “AllianceBernstein.” The logo set forth below is a service mark of AB:
In 2015, we established a new brand identity by prominently incorporating “AB” into our brand architecture, while maintaining
the legal names of our corporate entities. With this and other related refinements, our company, and our Institutional and Retail
businesses, are referred to as “AllianceBernstein (AB)” or simply “AB.” Private Wealth Management and Bernstein Research
Services are referred to as “AB Bernstein.” Also, we adopted the logo service mark described above.
In connection with the Bernstein Transaction, we acquired all of the rights in, and title to, the Bernstein service marks, including
the mark “Bernstein.”
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AllianceBernstein
Part I
Service marks are generally valid and may be renewed indefinitely, as long as they are in use and/or their registrations are
properly maintained.
Regulation
Virtually all aspects of our business are subject to various federal and state laws and regulations, rules of various securities
regulators and exchanges, and laws in the foreign countries in which our subsidiaries conduct business. These laws and
regulations primarily are intended to protect clients and fund shareholders and generally grant supervisory agencies broad
administrative powers, including the power to limit or restrict the carrying on of business for failure to comply with such laws
and regulations. Possible sanctions that may be imposed on us include the suspension of individual employees, limitations on
engaging in business for specific periods, the revocation of the registration as an investment adviser or broker-dealer, censures
and fines.
AB, AB Holding, the General Partner and six of our subsidiaries (Sanford C. Bernstein & Co., LLC (“SCB LLC”), AB Broadly
Syndicated Loan Manager LLC, AB Custom Alternative Solutions LLC, AB Private Credit Investors LLC, AB CarVal Investors and
W.P. Stewart Asset Management Ltd.) are registered with the SEC as investment advisers under the Investment Advisers Act.
Additionally, AB Holding is an NYSE-listed company and, accordingly, is subject to applicable regulations promulgated by the
NYSE. Also, AB, SCB LLC and AB Custom Alternative Solutions LLC are registered with the Commodity Futures Trading
Commission (“CFTC”) as commodity pool operators and commodity trading advisers; SCB LLC also is registered with the CFTC
as a commodities introducing broker.
Each U.S. Fund is registered with the SEC under the Investment Company Act and each Non-U.S. Fund is subject to the laws in
the jurisdiction in which the fund is registered. For example, our platform of Luxembourg-based funds operates pursuant to
Luxembourg laws and regulations, including Undertakings for the Collective Investment in Transferable Securities Directives,
and is authorized and supervised by the Commission de Surveillance du Secteur Financier (“CSSF”), the primary regulator in
Luxembourg. AllianceBernstein Investor Services, Inc., one of our subsidiaries, is registered with the SEC as a transfer and
servicing agent.
SCB LLC and another of our subsidiaries, AllianceBernstein Investments, Inc., are registered with the SEC as broker-dealers, and
both are members of the Financial Industry Regulatory Authority. In addition, SCB LLC is a member of the NYSE and other
principal U.S. exchanges.
Many of our subsidiaries are subject to the oversight of regulatory authorities in the jurisdictions outside the United States in
which they operate, including the Ontario Securities Commission, the Investment Industry Regulatory Organization of Canada,
the European Securities and Markets Authority, the Financial Conduct Authority in the U.K., the CSSF in Luxembourg, the
Financial Services Agency in Japan, the Securities & Futures Commission in Hong Kong, the Monetary Authority of Singapore,
the Financial Services Commission in South Korea, the Financial Supervisory Commission in Taiwan and The Securities and
Exchange Board of India. While these regulatory requirements often may be comparable to the requirements of the SEC and
other U.S. regulators, they are sometimes more restrictive and may cause us to incur substantial expenditures of time and
money related to our compliance efforts. For additional information relating to the regulations that impact our business, please
refer to "Risk Factors" in Item 1A.
History and Structure
We have been in the investment research and management business for more than 50 years. Bernstein was founded in 1967.
Alliance Capital was founded in 1971 when the investment management department of Donaldson, Lufkin & Jenrette, Inc.
(since November 2000, a part of Credit Suisse Group) merged with the investment advisory business of Moody’s Investors
Service, Inc.
In April 1988, AB Holding “went public” as a master limited partnership. AB Holding Units, which trade under the ticker symbol
“AB,” have been listed on the NYSE since that time.
In October 1999, AB Holding reorganized by transferring its business and assets to AB, a newly-formed operating partnership, in
exchange for all of the AB Units (the “Reorganization”). Since the date of the Reorganization, AB has conducted the business
formerly conducted by AB Holding and AB Holding’s activities have consisted of owning AB Units and engaging in related
activities. Unlike AB Holding Units, AB Units do not trade publicly and are subject to significant restrictions on transfer. The
General Partner is the general partner of both AB and AB Holding.
In October 2000, our two legacy firms, Alliance Capital and Bernstein, combined, bringing together Alliance Capital’s expertise in
growth equity and corporate fixed income investing and its family of retail mutual funds, with Bernstein’s expertise in value
equity investing, tax-exempt fixed income management, and its Private Wealth Management and Bernstein Research
Services businesses.
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Part I
As of December 31, 2023, the condensed ownership structure of AB is as follows (for a more complete description of our
ownership structure, see “Principal Security Holders” in Item 12):
The General Partner owns 100,000 general partnership units in AB Holding and a 1.0% general partnership interest in AB.
Including these general partnership interests, EQH, directly and through certain of its subsidiaries (see “Principal Security
Holders” in Item 12), had an approximate 61.2% economic interest in AB as of December 31, 2023.
Competition
We compete in all aspects of our business with numerous investment management firms, mutual fund sponsors, brokerage
and investment banking firms, insurance companies, banks and other financial institutions that often provide investment
products with similar features and objectives as those we offer. Our competitors offer a wide range of financial services to the
same customers that we seek to serve. Some of our competitors are larger, have a broader range of product choices and
investment capabilities, conduct business in more markets, and have substantially greater resources than we do. These factors
may place us at a competitive disadvantage, and we can give no assurance that our strategies and efforts to maintain and
enhance our current client relationships, and create new ones, will be successful.
In addition, EQH and its subsidiaries provide financial services, some of which compete with those we offer. The AB Partnership
Agreement specifically allows EQH and its subsidiaries (other than the General Partner) to compete with AB and to pursue
opportunities that may be available to us. EQH and certain of its subsidiaries have substantially greater financial resources than
we do and are not obligated to provide resources to us.
To grow our business, we believe we must be able to compete effectively for AUM. Key competitive factors include:
• our investment performance for clients;
• our commitment to place the interests of our clients first;
•
the quality of our research;
• our ability to attract, motivate and retain highly skilled, and often highly specialized, personnel;
•
•
the array of investment products we offer;
the fees we charge;
• Morningstar/Lipper rankings for the AB Funds;
• our ability to sell our actively-managed investment services despite the fact that many investors favor passive services;
• our operational effectiveness;
• our ability to further develop and market our brand; and
• our global presence.
Competition is an important risk that our business faces and should be considered along with the other factors we discuss in
“Risk Factors” in Item 1A.
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AllianceBernstein
Part I
Available Information
AB and AB Holding file or furnish annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K,
amendments to such reports, and other reports (and amendments thereto) required to comply with federal securities laws,
including Section 16 beneficial ownership reports on Forms 3, 4 and 5, registration statements and proxy statements. We
maintain an Internet site (http://w// ww.alliancebernsrr
tein.com) where the public can view these reports, free of charge, as soon as
reasonably practicable after each report is filed with, or furnished to, the Securities and Exchange Commission ("SEC"). In
addition, the SEC maintains an Internet site (http://w// ww.sec.gov)v that contains reports, proxy and information statements, and
other information regarding issuers that file electronically with the SEC.
Item 1A. Risk Factors
Please consider this section along with the description of our business in Item 1, the competition section immediatelyl above
and AB’s financial information contained in Items 7 and 8. The majority of the risk factors discussed below directly affect AB.
These risk factors also affect AB Holding because AB Holding’s principal source of income and cash flow is attributable to its
investment in AB. See also “Cautions Regarding Forward-Looking Statements” in Item 7.
Business-related Risks
Our revenues and results of operations depend on the market value and composition of our AUM, which can fluctuate
significantly based on various factors, including many factors outside of our control.
We derive most of our revenues from investment advisory and services fees, which typically are calculated as a percentage of
the value of AUM as of a specified date, or as a percentage of the value of average AUM for the applicable billing period, and
vary with the type of investment service, the size of the account and the total amount of assets we manage for a particular
client. The value and composition of our AUM can be adversely affected by several factors, including:
• Market Factors. Our AUM remain sensitive to the volatility associated with global financial market conditions. For example,
the heightened global inflationary pressures that resulted in sizable interest rate increases and associated market volatility in
2022 and 2023. We recognize that, due to continued uncertainty associated with the global response to heightened global
inflationary pressures, markets may remain volatile and, accordingly, there remains risk of a significant reduction in our
revenues and net income in future periods. Global economies and financial markets are increasingly interconnected, which
increases the probability that conditions in one country or region might adversely impact a different country or region.
Conditions affecting the general economy, including political, social or economic instability at the local, regional or global
level may also affect the market value of our AUM. War, such as the ongoing conflict in Ukraine and the middle east, or civil
disturbance, acts of terrorism (whether foreign or domestic), health crises (such as the COVID-19 pandemic), as well as other
incidents that interrupt the expected course of events, such as natural disasters, power outages and other unforeseeable and
external events, and the public response to or fear of such diseases or events, have had and may in the future have a
significant adverse effect on financial markets and our AUM, revenues and net income. Also, significant market volatility and
uncertainty, and reductions in the availability of margin financing, can significantly limit the liquidity of certain asset backed
and other securities, making it at times impossible to sell these securities at prices reflecting their true economic value.
While liquidity conditions were relatively stable in 2023 despite market volatility, we recognize the possibility that conditions
could deteriorate in the future. Lack of liquidity makes it more difficult for our funds to meet redemption requests. If liquidity
were to worsen, this may have a significant adverse effect on our AUM, revenues and net income in the future.
• Client Preferences. Generally, our clients may withdraw their assets at any time and on short notice. Also, changing market
dynamics and investment trends, particularly with respect to sponsors of defined benefit plans choosing to invest in less
risky investments and the ongoing shift to lower-fee passive services described below, may continue to reduce interest in
some of the investment products we offer, and/or clients and prospects may continue to seek investment products that we
may not currently offer. Loss of, or decreases in, AUM reduces our investment advisory and services fees and revenues.
2023 Annual Report
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Part I
• Our Investment Performance. Our ability to achieve investment returns for clients that meet or exceed investment returns for
comparable asset classes and competing investment services is a key consideration when clients decide to keep their
assets with us or invest additional assets, and when a prospective client is deciding whether to invest with us. Poor
investment performance, both in absolute terms and/or relative to peers and stated benchmarks, may result in clients
withdrawing assets and prospective clients choosing to invest with competitors.
•
Investing Trends. Our fee rates can vary significantly among the various investment products and services we offer to our
clients (see “Net Revenues” in Item 7 for additional information regarding our fee rates); our fee realization rate fluctuates as
clients shift assets between accounts or products with different fee structures.
• Service Changes. We may be required to reduce our fee levels, restructure the fees we charge and/or adjust the services we
offer to our clients because of, among other things, regulatory initiatives (whether industry-wide or specifically targeted),
changing technology in the asset management business (including algorithmic strategies and emerging financial
technology), court decisions and competitive considerations. A reduction in fee levels would reduce our revenues.
•
Interest Rate Changes. Investor interest in and the valuation of our fixed income and multi-asset investment portfolios can
be adversely affected by changes in interest rates, particularly if interest rates increase substantially and quickly.
A decrease in the value of our AUM, a decrease in the amount of AUM we manage, an adverse mix shift in our AUM and/or a
reduction in the level of fees we charge would adversely affect our investment advisory fees and revenues. A reduction in
revenues, without a commensurate reduction in expenses, adversely affects our results of operations.
The industry-wide shift from actively managed investment services to passive services has adversely affected our
investment advisory and services fees, revenues and results of operations, and this trend may continue.
Our competitive environment has become increasingly difficult, as active managers, which invest based on individual security
selection, have, on average, consistently underperformed passive services, which invest based on market indices. In the most
recent period this trend reversed, as active performance relative to benchmarks improved, with 57% of active managers
outperforming their passive benchmarks for the 12 months ended June 30, 2023 (latest data available), compared to 43% for
the prior 12-month period. 57% of active US stock funds outperformed, up from 48% the prior year, while 63% of active non-U.S.
stock funds outperformed their benchmarks, up from just 33% the prior period. Performance of actively managed bond funds
also improved in 2023, with 55% outperforming benchmarks, up from just 30% in the prior-year period.
Flows into actively managed funds substantially improved industry-wide in 2023, with U.S. industry-wide active mutual fund
inflows of $549 billion in 2023, compared with outflows of $931 billion in 2022. The improvement was led by $927 billion in
inflows to Money Market funds, as investors responded to the higher interest rate environment. Active fixed income U.S. mutual
funds also experienced improvement, with inflows of $16 billion in 2023, compared with outflows of $465 billion in 2022. Active
equity U.S. mutual fund outflows were $246 billion in 2023, compared to outflows of $235 billion in 2022. Demand for passive
strategies in the U.S. continued to grow, though at a reduced rate from the prior year, as industry-wide total passive mutual fund
net inflows of $489 billion in 2023 compared to $540 billion in 2022. Organic growth through net inflows continues to be
difficult to achieve for active managers, such as AB, and requires taking market share from other active managers.
The significant shift from active services to passive services adversely affects Bernstein Research Services revenues as well.
Institutional global market trading volumes continue to be pressured by persistent active equity outflows and passive equity
inflows. As a result, portfolio turnover has declined and investors hold fewer shares that are actively traded by managers.
Our reputation could suffer if we are unable to deliver consistent, competitive investment performance.
Our business is based on the trust and confidence of our clients. Damage to our reputation, resulting from poor or inconsistent
investment performance, among other factors, can reduce substantially our AUM and impair our ability to maintain or grow
our business.
EQH and its subsidiaries provide a significant amount of our AUM and fund a significant portion of our seed investments, and
if our agreements with them terminate or they withdraw capital support it could have a material adverse effect on our
business, results of operations and/or financial condition.
EQH (our parent company) and its subsidiaries constitute our largest client. Our EQH affiliates represented approximately 16%
of our AUM as of December 31, 2023, and we earned approximately 5% of our net revenues from services we provided to them.
Our related investment management agreements are terminable at any time or on short notice by either party, and EQH is not
under any obligation to maintain any level of AUM with us. A material adverse effect on our business, results of operations and/
or financial condition could result if EQH were to terminate its investment management agreements with us.
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AllianceBernstein
Part I
Our business is dependent on investment advisory agreements with clients, and selling and distribution agreements with
various financial intermediaries and consultants, which generally are subject to termination or non-renewal on short notice.
We derive most of our revenues pursuant to written investment management agreements (or other arrangements) with
investors, mutual funds and private wealth clients, and selling and distribution agreements with financial
institutional
intermediaries that distribute AB Funds. Generally, the investment management agreements (and other arrangements),
including our agreements with EQH and its subsidiaries, are terminable at any time or upon relatively short notice by either
party. The investment management agreements pursuant to which we manage the U.S. Funds must be renewed and approved
by the Funds’ boards of directors annually. A significant majority of the directors are independent. Consequently, there can be
no assurance that the board of directors of each fund will approve the fund’s investment management agreement each year, or
will not condition its approval on revised terms that may be adverse to us. In addition, investors in AB Funds can redeem their
investments without notice. Any termination of, or failure to renew, a significant number of these agreements, or a significant
increase in redemption rates, could have a material adverse effect on our results of operations and business prospects.
Similarly, the selling and distribution agreements with securities firms, brokers, banks and other financial intermediaries are
terminable by either party upon notice (generally 30 days) and do not obligate the financial intermediary to sell any specific
amount of fund shares. These intermediaries generally offer their clients investment products that compete with our products.
In addition, certain institutional investors rely on consultants to advise them about choosing an investment adviser and some of
our services may not be considered among the best choices by these consultants. As a result, investment consultants may
advise their clients to move their assets invested with us to other investment advisers, which could result in significant
net outflows.
Lastly, our Private Wealth Services rely on referrals from financial planners, registered investment advisers and other
professionals. We cannot be certain that we will continue to have access to, or receive referrals from, these third parties. Loss
of such access or referrals could have a material adverse effect on our results of operations and business prospects.
Performance-based fee arrangements with our clients may cause greater fluctuations in our net revenues.
We sometimes charge our clients performance-based fees, whereby we charge a base advisory fee and are eligible to earn an
additional performance-based fee or incentive allocation that is calculated as either a percentage of absolute investment
results or a percentage of investment results in excess of a stated benchmark over a specified period of time. Some
performance-based fees include a high-watermark provision, which generally provides that if a client account under-performs
relative to its performance target (whether in absolute terms or relative to a specified benchmark), it must gain back such
under-performance before we can collect future performance-based fees. Therefore, if we fail to achieve the performance
target for a particular period, we will not earn a performance-based fee for that period and, for accounts with a high-watermark
provision, our ability to earn future performance-based fees will be impaired.
We are eligible to earn performance-based fees on 9.3%, 8.3% and 0.4% of the assets we manage for institutional clients,
private wealth clients and retail clients, respectively (in total, 5.6% of our AUM). If the percentage of our AUM subject to
performance-based fees increases, seasonality and volatility of revenue and earnings are likely to become more significant. Our
performance-based fees were $144.9 million, $145.2 million and $245.1 million in 2023, 2022 and 2021, respectively.
The revenues generated by Bernstein Research Services may be adversely affected by circumstances beyond our control,
including declines in brokerage transaction rates, declines in global market volumes, failure to settle our trades by
significant counterparties.
Electronic, or “low-touch,” trading represents a significant percentage of buy-side trading activity and typically produces
transaction fees that are significantly lower than traditional full-service fee rates. As a result, blended pricing throughout our
industry is lower now than it was historically, and price declines may continue. In addition, fee rates we charge and charged by
other brokers for brokerage services have historically experienced price pressure, and we expect these trends to continue. Also,
while increases in transaction volume and market share often can offset decreases in rates, this may not continue.
In addition, the failure or inability of any of our broker-dealer's significant counterparties to perform could expose us to
substantial expenditures and adversely affect our revenues. For example, SCB LLC, as a member of clearing and settlement
organizations, would be required to settle open trades of any non-performing counterparty. This exposes us to the mark-to-
market adjustment on the trades between trade date and settlement date, which could be significant, especially during periods
of severe market volatility. Also, our ability to access liquidity in such situations may be limited by what our funding
relationships are able to offer us at such times.
Lastly, extensive changes proposed by the SEC to the equity market structure,
including Regulation Best Execution, the
proposed Order Competition Rule, the proposed volume-based exchange transaction pricing rule and proposed changes to
Regulation NMS establishing, among other things, minimum pricing increments and required disclosures by larger broker-
dealers and specified trading platforms, if adopted as proposed, could substantially increase the cost of conducting our buy-
side and broker-dealer operations and, possibly, adversely impact trade execution quality.
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Part I
We may be unable to develop new products and services, and the development of new products and services may expose us
to reputational harm, additional costs or operational risk.
r financial performance depends, in part, on our ability to react nimbly to changes in the asset management industry, respond
to evolving client needs, and develop, market and manage new investment products and services. Conversely, the development
and introduction of new products and services, including the creation of products with concentrations in industries or sectors
specific to individual client criteria, or with a focus on ESG, requires continuous innovative effort on our part and may require
significant time and resources as well as ongoing support and investment. Substantial risk and uncertainties are associated
with the introduction of new products and services, including the implementation of new and appropriate operational controls
and procedures, shifting client and market preferences, the introduction of competing products or services, and compliance
with regulatory and disclosure requirements. We can make no assurance that we will be able to develop new products and
services that successfully address the needs of clients within needed timeframes. Any failure to successfully develop new
products and services, or effectively manage associated operational risks, could harm our reputation and expose us to
additional costs, which could adversely affect our AUM, revenues and operating income.
Fluctuations in the exchange rates between the U.S. dollar and various other currencies can adversely affect our AUM,
revenues and results of operations.
Although significant portions of our net revenues and expenses, as well as our AUM, presently are denominated in U.S. dollars,
we have subsidiaries and clients outside of the United States with functional currencies other than the U.S. dollar. Weakening of
these currencies relative to the U.S. dollar adversely affects the value in U.S. dollar terms of our revenues and our AUM
denominated in these other currencies. Accordingly, fluctuations in U.S. dollar exchange rates affect our AUM, revenues and
reported financial results from one period to the next.
We may not be successful in our efforts to hedge our exposure to such fluctuations, which could negatively impact our
revenues and reported financial results.
Our seed capital investments are subject to market risk. While we enter into various futures, forwards, swap and option
contracts to economically hedge many of these investments, we also may be exposed to market risk and credit-related
losses in the event of non-performance by counterparties to these derivative instruments.
We have a seed investment program for the purpose of building track records and assisting with the marketing initiatives
pertaining to our firm's new products. These seed capital investments are subject to market risk. Our risk management team
oversees a seed hedging program that attempts to minimize this risk, subject to practical and cost considerations. Also, not all
seed investments are deemed appropriate to hedge, and in those cases we are exposed to market risk. In addition, we may be
subject to basis risk in that we cannot always hedge with precision our market exposure and, as a result, we may be subject to
relative spreads between market sectors. As a result, volatility in the capital markets may cause significant changes in our
period-to-period financial and operating results.
We use various derivative instruments, including futures, forwards, swaps and option contracts, in conjunction with our seed
hedging program. While in most cases broad market risks are hedged, our hedges are imperfect and some market risk remains.
In addition, our use of derivatives results in counterparty risk (i.e., the risk that we may be exposed to credit-related losses in the
event of non-performance by counterparties to these derivative instruments), regulatory risk (e.g., short selling restrictions) and
cash/synthetic basis risk (i.e.,
the underlying positions do not move identically to the related
derivative instruments).
the risk that
We may engage in strategic transactions that could pose risks.
As part of our business strategy, we consider potential strategic transactions, including acquisitions (such as our purchase of
CarVal Investors in 2022), dispositions, mergers, consolidations, joint venture partnerships (such as our planned joint venture
partnership with SocGen) and similar transactions, some of which may be material. These transactions, if undertaken, may
involve various risks and present financial, managerial and operational challenges, including:
• adverse effects on our earnings if acquired intangible assets or goodwill become impaired;
• existence of unknown liabilities or contingencies that arise after closing;
• potential disputes with counterparties; and
•
the possible need for us to increase our firm's leverage or, if we fund the purchase price of a transaction with AB Units or AB
Holding Units, likely dilution to our existing unitholders.
Acquisitions also pose the risk that any business we acquire may lose customers or employees or could under-perform relative
to expectations. Additionally, the loss of investment personnel poses the risk that we may lose the AUM we expected to
manage, which could adversely affect our results of operations.
20
AllianceBernstein
Part I
We may not accurately value the securities we hold on behalf of our clients or our company investments.
In accordance with applicable regulatory requirements, contractual obligations or client direction, we employ procedures for the
pricing and valuation of securities and other positions held in client accounts or for company investments. We have established
a Valuation Committee and sub-committees, consisting of senior officers and employees, which oversee a consistent
framework of pricing controls and valuation processes for the firm and each of its advisory affiliates. If market quotations for a
security are not readily available, the Valuation Committee determines a fair value for the security.
Extraordinary volatility in financial markets, significant liquidity constraints or our failure to adequately consider one or more
factors when determining the fair value of a security based on information with limited market observability could result in our
failing to properly value securities we hold for our clients or investments accounted for on our balance sheet. Improper
valuation likely would result in our basing fee calculations on inaccurate AUM figures, our striking incorrect net asset values for
company-sponsored mutual funds or hedge funds or, in the case of company investments, our inaccurately calculating and
reporting our financial condition and operating results. Although the overall percentage of our AUM that we fair value based on
information with limited market observability is not significant, inaccurate fair value determinations can harm our clients, create
regulatory issues and damage our reputation.
The quantitative and systematic models we use in certain of our investment services may contain errors, resulting in
imprecise risk assessments and unintended output.
We use quantitative and systematic models in a variety of our investment services, usually in combination with fundamental
research. These models are developed by senior quantitative professionals and typically are implemented by IT professionals.
Our Model Risk Oversight Committee oversees the model governance framework and associated model review activities, which
are then executed by our Model Risk Team. However, due to the complexity and large data dependency of such models, it is
possible that errors in the models could exist and our controls could fail to detect such errors. Failure to detect errors could
result in client losses and reputational damage.
The financial services industry is intensely competitive.
We compete on the basis of a number of factors, including our investment performance for our clients, our array of investment
services, innovation, reputation and price. By having a global presence, we often face competitors with more experience and
more established relationships with clients, regulators and industry participants in the relevant market, which could adversely
affect our ability to expand. Furthermore, if we are unable to maintain and/or continue to improve our investment performance,
our client flows may be adversely affected, which may make it more difficult for us to compete effectively.
Also, increased competition could reduce the demand for our products and services, which could have a material adverse
information regarding
effect on our financial condition, results of operations and business prospects. For additional
competitive factors, see “Competition” in Item 1.
People-related Risks
We may be unable to continue to attract, motivate and retain key personnel, and the cost to retain key personnel could put
pressure on our adjusted operating margin.
Our business depends on our ability to attract, motivate and retain highly skilled, and often highly specialized, technical,
investment, managerial and executive personnel, and there is no assurance that we will be able to continue to do so.
The market for these professionals is extremely competitive. Certain of these professionals often maintain strong, personal
relationships with investors in our products and other members of the business community so their departure may cause us to
lose client accounts or result in fewer opportunities to win new business, either of which factors could have a material adverse
effect on our results of operations and business prospects.
Additionally, a decline in revenues may limit our ability to pay our employees at competitive levels, and maintaining (or
increasing) compensation without a revenue increase, in order to retain key personnel, may adversely affect our operating
margin. For additional information regarding our compensation practices, see "Compensation Discussion and Analysl
is" in
Item 11.
Our process of relocating our headquarters may not be executed as we have envisioned.
have established our corporate headquarters in and have relocated a large number of the positions jobs previously located
in the New York metropolitan area to Nashville, Tennessee (for additional information, see “Relocation Strategy” in Item 7).7
Although the ongoing impact on AB from this process is not yet known, the uncertainty created by these circumstances
could adversely affect AB’s ability to motivate and retain current employees and hire qualified employees in our
Nashville headquarters.
Additionally, our estimates for both the transition costs and the corresponding expense savings relating to our headquarters
relocation are based on our current assumptions of employee relocation costs, severance, and overlapping compensation and
to be inaccurate, our expenses and operating income could be
occupancy costs.
adversely affected.
If our assumptions turn out
2023 Annual Report
21
Part I
Employee misconduct, which can be difficult to detect and deter, could harm us by impairing our ability to attract and retain
clients and subjecting us to significant regulatory scrutiny, legal liability and reputational harm.
ere have been several highly publicized cases involving fraud or other misconduct by employees in the financial services
industry generally, and we are not immune. Misconduct by employees could involve the improper use or disclosure of
confidential information, which could result in legal action, regulatory sanctions, and reputational or financial harm. Further,
fraud, payment or solicitation of bribes and other deceptive practices or other misconduct by our employees could similarly
subject us to regulatory scrutiny, legal liability and reputational damage.
Operational, Technology and Cyber-related Risks
Technology failures and disruptions, including failures to properly safeguard confidential information, can significantly
constrain our operations and result in significant time and expense to remediate, which could result in a material adverse
effect on our results of operations and business prospects.
We are highly dependent on software and related technologies throughout our business, including both proprietary systems and
those provided by third-party vendors. We use our technology to, among other things, obtain securities pricing information,
process client transactions, store and maintain data, and provide reports and other services to our clients. Despite our
protective measures, including measures designed to effectively secure information through system security technology and
established and tested business continuity plans, we may still experience system delays and interruptions as a result of natural
disasters, hardware failures, software defects, power outages, acts of war and third-party failures. We cannot predict with
certainty all of the adverse effects that could result from our failure, or the failure of a third party, to efficiently address and
resolve these delays and interruptions. These adverse effects could include the inability to perform critical business functions
or failure to comply with financial reporting and other regulatory requirements, which could lead to loss of client confidence,
reputational damage, exposure to disciplinary action and liability to our clients.
Many of the software applications that we use in our business are licensed from, and supported, upgraded and maintained by,
third-party vendors. A suspension or termination of certain of these licenses or the related support, upgrades and maintenance
could cause temporary system delays or interruption. Additionally, technology rapidly evolves and we cannot guarantee that our
competitors may not implement more advanced technology platforms for their products and services, which may place us at a
competitive disadvantage and adversely affect our results of operations and business prospects.
Also, we could be subject to losses if we fail to properly safeguard sensitive and confidential information. As part of our normal
operations, we maintain and transmit confidential information about our clients as well as proprietary information relating to
our business operations. Although we take protective measures, our systems still could be vulnerable to cyber attack or other
forms of unauthorized access (including computer viruses) that have a security impact, such as an authorized employee or
vendor inadvertently or intentionally causing us to release confidential or proprietary information. Such disclosure could, among
other things, allow competitors access to our proprietary business information and require significant time and expense to
investigate and remediate the breach. Moreover, loss of confidential client information could harm our reputation and subject
us to liability under laws that protect confidential personal data, resulting in increased costs or loss of revenues.
Any significant security breach of our information and cyber security infrastructure, as well as our failure to properly
escalate and respond to such an incident, may significantly harm our operations and reputation.
It is critical that we ensure the continuity and effectiveness of our information and cyber security infrastructure, policies,
procedures and capabilities to protect our computer and telecommunications systems and the data that reside on or are
transmitted through them and contracted third-party systems. Although we take protective measures, including measures to
effectively secure information through system security technology, our technology systems may still be vulnerable to
unauthorized access, supply chain attacks, computer viruses or other events that have a security impact, such as an external
information and
attack by one or more cyber criminals (including phishing attacks attempting to obtain confidential
ransomware attacks attempting to block access to a computer system until a sum of money is paid), which could materially
harm our operations and reputation. Additionally, while we take precautions to password protect and encrypt our laptops and
sensitive information on our other mobile electronic devices, if such devices are stolen, misplaced or left unattended, they may
become vulnerable to hacking or other unauthorized use, creating a possible security risk and resulting in potentially costly
actions by us.
Furthermore, although we maintain a robust cyber security infrastructure and incident preparedness strategy, which we test
frequently, we may be unable to respond, both internally and externally, to a cyber incident in a sufficiently expeditious manner.
Any such failure could cause significant harm to our reputation and result in litigation, regulatory scrutiny and/or significant
remediation costs, see "CybC ersecurity" in Item 1C.
22
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Part I
Climate change and other unpredictable events, including outbreak of infectious disease, natural disaster, dangerous
weather conditions,
terrorist attack and political unrest, may adversely affect our ability to
conduct business.
War, terrorist attack, political unrest, power failure, climate change, natural disaster and rapid spread of infectious disease
(such as the COVID-19 pandemic) could interrupt our operations by:
technology failure,
• causing disruptions in global economic conditions, thereby decreasing investor confidence and making investment products
generally less attractive;
inflicting loss of life;
triggering large-scale technology failures or delays;
•
•
• breaching our information and cyber security infrastructure; and
•
requiring substantial capital expenditures and operating expenses to remediate damage and restore operations.
Furthermore, climate change may increase the severity and frequency of catastrophes, or adversely affect our investment
portfolio or investor sentiment. Climate change may also increase the frequency and severity of weather-related disasters and
pandemics. And, climate change regulation may affect the prospects of companies and other entities whose securities in which
we invest, or our willingness to continue to invest in such securities.
Despite the contingency plans and facilities we have in place, including system security measures, information back-up and
disaster recovery processes, our ability to conduct business, including in key business centers where we have significant
operations, such as Nashville, Tennessee, New York City, San Antonio, Texas, London, England, Hong Kong, and India, may be
adversely affected by a disruption in the infrastructure that supports our operations and the communities in which they are
located. This may include a disruption involving electrical, communications, transportation or other services we may use or
third parties with which we conduct business. If a disruption occurs in one location and our employees in that location are
unable to occupy our offices or communicate with or travel to other locations, our ability to conduct business with and on
behalf of our clients may suffer, and we may not be able to successfully implement contingency plans that depend on
communication or travel. Furthermore, unauthorized access to our systems as a result of a security breach, the failure of our
systems, or the loss of data could give rise to legal proceedings or regulatory penalties under laws protecting the privacy of
personal information, disrupt operations, and damage our reputation.
Our operations require experienced, professional staff. Loss of a substantial number of such persons or an inability to provide
properly equipped places for them to work may, by disrupting our operations, adversely affect our financial condition, results of
operations and business prospects. In addition, our property and business interruption insurance may not be adequate to
compensate us for all losses, failures or breaches that may occur.
Our own operational failures or those of third parties on which we rely, including failures arising out of human error, could
disrupt our business, damage our reputation and reduce our revenues.
Weaknesses or failures in our internal processes or systems could lead to disruption of our operations, liability to clients,
exposure to disciplinary action or harm to our reputation. Our business is highly dependent on our ability to process, on a daily
basis,
large numbers of transactions, many of which are highly complex, across numerous and diverse markets. These
transactions generally must comply with client investment guidelines, as well as stringent legal and regulatory standards.
Our obligations to clients require us to exercise skill, care and prudence in performing our services. Despite our employees
being highly trained and skilled, the large number of transactions we process makes it highly likely that errors will occasionally
occur. If we make a mistake in performing our services that causes financial harm to a client, we have a duty to act promptly to
put the client in the position the client would have been in had we not made the error. The occurrence of mistakes, particularly
significant ones, can have a material adverse effect on our reputation, results of operations and business prospects.
The individuals and third-party vendors on whom we rely to perform services for us or our clients may be unable or unwilling
to honor their contractual obligations to us.
We rely on various counterparties and other third-party vendors to augment our existing investment, operational, financial and
technological capabilities, but the use of a third-party vendor does not diminish AB's responsibility to ensure that client and
regulatory obligations are met. Default rates, credit downgrades and disputes with counterparties as to the valuation of
collateral increase significantly in times of market stress. Disruptions in the financial markets and other economic challenges
may cause our counterparties and other third-party vendors to experience significant cash flow problems or even render them
insolvent, which may expose us to significant costs and impair our ability to conduct business.
Weaknesses or failures within a third-party vendor's internal processes or systems, or inadequate business continuity plans,
can materially disrupt our business operations. Also, third-party vendors may lack the necessary infrastructure or resources to
effectively safeguard our confidential data. If we are unable to effectively manage the risks associated with such third-party
relationships, we may suffer fines, disciplinary action and reputational damage.
2023 Annual Report
23
Part I
We may not always successfully manage actual and potential conflicts of interest that arise in our business.
Increasingly, we must manage actual and potential conflicts of interest, including situations where our services to a particular
client conflict, or are perceived to conflict, with the interests of another client. Failure to adequately address potential conflicts
of interest could adversely affect our reputation, results of operations and business prospects.
We have procedures and controls that are designed to identify and mitigate conflicts of interest, including those designed to
prevent the improper sharing of information. However, appropriately managing conflicts of interest is complex. Our reputation
could be damaged and the willingness of clients to enter into transactions in which such a conflict might arise may be affected
if we fail, or appear to fail, to deal appropriately with actual or perceived conflicts of interest. In addition, potential or perceived
conflicts could give rise to litigation or regulatory enforcement actions.
Maintaining adequate liquidity for our general business needs depends on certain factors, including operating cash flows
and our access to credit on reasonable terms.
Our financial condition is dependent on our cash flow from operations, which is subject to the performance of the capital
markets, our ability to maintain and grow AUM and other factors beyond our control. Our ability to issue public or private debt
on reasonable terms may be limited by adverse market conditions, our profitability, our creditworthiness as perceived by
lenders and changes in government regulations, including tax rates and interest rates. Furthermore, our access to credit on
reasonable terms is partially dependent on our firm’s credit ratings.
Both Moody’s Investors Service, Inc. and Standard & Poor's Rating Service affirmed AB’s long-term and short-term credit ratings
and indicated a stable outlook in 2023. Future changes in our credit ratings are possible and any downgrade to our ratings is
likely to increase our borrowing costs and limit our access to the capital markets. If this occurs, we may be forced to incur
unanticipated costs or revise our strategic plans, which could have a material adverse effect on our financial condition, results
of operations and business prospects.
An impairment of goodwill may occur.
Determining whether an impairment of the goodwill asset exists requires management to exercise a substantial amount of
judgment. In addition, to the extent that securities valuations are depressed for prolonged periods of time and/or market
conditions deteriorate, or if we experience significant net redemptions, our AUM, revenues, profitability and unit price will be
adversely affected. Although the price of an AB Holding Unit is just one factor in the calculation of fair value, if AB Holding Unit
price levels decline significantly, reaching the conclusion that fair value exceeds carrying value will, over time, become more
difficult. In addition, control premiums, industry earnings multiples and discount rates are impacted by economic conditions. As
a result, subsequent impairment tests may occur more frequently and be based on more negative assumptions and future cash
flow projections, and may result in an impairment of goodwill. An impairment may result in a material charge to our earnings.
For additional information about our impairment testing, see Item 7.
The insurance that we purchase may not fully cover all potential exposures.
We maintain professional liability, errors & omissions, fidelity, cyber, property, casualty, business interruption and other types of
insurance, but such insurance may not cover all risks associated with the operation of our business. Our coverage is subject to
exclusions and limitations, including high self-insured retentions or deductibles and maximum limits and liabilities covered. In
addition, from time to time, various types of insurance may not be available on commercially acceptable terms or, in some
cases, at all. We can make no assurance that a claim or claims will be covered by our insurance policies or, if covered, will not
exceed our available insurance coverage, or that our insurers will remain solvent and meet their obligations.
In the future, we may not be able to obtain coverage at current levels, if at all, and our premiums may increase significantly on
coverage that we maintain. Also, we currently are party to certain joint insurance arrangements with subsidiaries of EQH. If our
affiliates choose not to include us as insured parties under any such policies, we may need to obtain stand-alone insurance
coverage, which could have coverage terms that are less beneficial to us and/or cost more.
Legal and Regulatory-related Risks
Our business is subject to pervasive, complex and continuously evolving global regulation, compliance with which involves
substantial expenditures of time and money, and violation of which may result in material adverse consequences.
Virtually all aspects of our business are subject to federal and state laws and regulations, rules of securities regulators and
exchanges, and laws and regulations in the foreign jurisdictions in which our subsidiaries conduct business. If we violate these
laws or regulations, we could be subject to civil liability, criminal liability or sanction, including restriction or revocation of our
and our subsidiaries’ professional licenses or registrations, revocation of the licenses of our employees, censures, fines, or
temporary suspension or permanent bar from conducting business. Any such liability or sanction could have a material adverse
effect on our financial condition, results of operations and business prospects. A regulatory proceeding, even if it does not
result in a finding of wrongdoing or sanction, could require substantial expenditures of time and money and could potentially
damage our reputation.
24
AllianceBernstein
Part I
In recent years, global regulators have substantially increased their oversight of financial services. Some of the newly-adopted
and proposed regulations are focused on investment management services. Others, while more broadly focused, nonetheless
impact our business. Moreover, the adoption of new laws, regulations or standards and changes in the interpretation or
enforcement of existing laws, regulations or standards have directly affected, and will continue to affect, our business,
including making our efforts to comply more expensive and time-consuming.
For example, there has been increasing regulatory focus on ESG-related practices by investment managers. In 2023, the State
of California passed two climate disclosure laws that will
impose significant reporting obligations on companies doing
business in California. Additionally, the SEC is poised in 2024 to issue a rule enhancing and standardizing climate disclosures
by U.S. public companies, including investment managers. The SEC also has focused on the labeling by investment funds of
their activities or investments as "sustainable" and has examined the methodology used by funds for determining ESG
investments, with a keen focus on whether such labeling may be misleading. Outside the U.S., the European Commission has
adopted an action plan on financing sustainable growth, as well as initiatives at the European Union (the "EU") level, such as
the EU Sustainable Finance Disclosure Regulation (the "SFDR"). Compliance with the SFDR and other ESG-related regulations
may subject us to increased restrictions, disclosure obligations, and compliance and other associated costs, as well as
potential reputational harm.
Also, in 2015 the Financial Supervisory Commission in Taiwan (the “FSC”) implemented new limits on the degree to which local
investors can own an offshore investment product. While certain exemptions have been available to us, should we not continue
to qualify, the FSC’s rules could force some of our local resident investors to redeem their investments in our funds sold in
Taiwan (and/or prevent further sales of those funds in Taiwan), some of which funds have local ownership levels substantially
above the FSC limits. This could lead to significant declines in our investment advisory and services fees and revenues earned
from these funds.
We are involved in various legal proceedings and regulatory matters and may be involved in such proceedings in the future,
any one or combination of which could have a material adverse effect on our reputation, financial condition, results of
operations and business prospects.
We are involved in various matters, including regulatory inquiries, administrative proceedings and litigation, some of which
allege significant damages, and we may be involved in additional matters in the future. Litigation is subject to significant
uncertainties, particularly when plaintiffs allege substantial or indeterminate damages, the litigation is in its early stages, or
when the litigation is highly complex or broad in scope.
Structure-related Risks
The partnership structure of AB Holding and AB limits Unitholders’ abilities to influence the management and operation of
AB’s business and is highly likely to prevent a change in control of AB Holding and AB.
The General Partner, as general partner of both AB Holding and AB, generally has the exclusive right and full authority and
responsibility to manage, conduct, control and operate their respective businesses, except as otherwise expressly stated in
their respective Amended and Restated Agreements of Limited Partnership. AB Holding and AB Unitholders have more limited
voting rights on matters affecting AB than do holders of common stock in a corporation. Both Amended and Restated
Agreements of Limited Partnership provide that Unitholders do not have any right to vote for directors of the General Partner
and that Unitholders only can vote on certain extraordinary matters (including removal of the General Partner under certain
extraordinary circumstances). Additionally, the AB Partnership Agreement includes significant restrictions on the transfer of AB
Units and provisions that have the practical effect of preventing the removal of the General Partner, which provisions are highly
likely to prevent a change in control of AB’s management.
AB Units are illiquid and subject to significant transfer restrictions.
There is no public trading market for AB Units and we do not anticipate that a public trading market will develop. The AB
Partnership Agreement restricts our ability to participate in a public trading market or anything substantially equivalent to one
by providing that any transfer that may cause AB to be classified as a “publicly traded partnership” (“PTP”) as defined in Section
7704 of the Internal Revenue Code of 1986, as amended (the “Code”), shall be deemed void and shall not be recognized by AB.
In addition, AB Units are subject to significant restrictions on transfer, such as obtaining the written consent of EQH and the
General Partner pursuant to the AB Partnership Agreement. Generally, neither EQH nor the General Partner will permit any
transfer that it believes would create a risk that AB would be treated as a corporation for tax purposes. EQH and the General
Partner have implemented a transfer program that requires a seller to locate a purchaser and imposes annual volume
restrictions on transfers. You may
the transfer program from our Corporate Secretary
rate_see ecretary@alliancebernsrr
(corporr
tein.com). Also, we have filed the transfer program as Exhibit 10.07 to this Form 10-K.
request a copy of
Changes in the treatment of AB Holding and AB as partnerships for tax purposes would have significant tax ramifications.
Having elected under Section 7704(g) of the Code to be subject to a 3.5% federal tax on partnership gross income from the
active conduct of a trade or business, AB Holding is a PTP that is taxable as a partnership for federal income tax purposes. To
preserve AB Holding's status as a PTP that is taxed as a partnership for federal income tax purposes, AB Holding must not
directly or indirectly (through AB) enter into a substantial new line of business. A “new line of business” includes any business
2023 Annual Report
25
Part I
that is not closely related to AB’s historical business of providing research and diversified investment management and related
services to its clients. A new line of business is “substantial” when a partnership derives more than 15% of its gross income
from, or uses more than 15% (by value) of its total assets in, the new line of business.
To preserve AB’s status as a private partnership for federal
publicly traded.
income tax purposes, AB Units must not be considered
If either or both AB Holding and AB were taxable as a corporation, the return on investment to Unitholders generally would be
reduced because distributions to Unitholders generally would be subject to two layers of taxation: first, amounts available for
distribution would be subject to federal (and applicable state and local) taxes at the corporate entity level; and second,
Unitholders generally would be subject to federal (and applicable state and local) taxes upon receipt of dividends.
AB Holding and AB are subject to the 4.0% New York City unincorporated business tax (“UBT”). AB Holding may net credits for
UBT paid by AB.
Changes in tax law governing us or an increase in business activities outside the U.S. could have a material impact on us.
Legislative proposals have been or may be introduced that, if enacted, could have a material adverse effect on us. We cannot
predict the outcome of such legislative proposals. AB management continues to monitor and assess how any new legislation
could affect AB.
Each of AB's non-U.S. corporate subsidiaries generally is subject to taxes in the foreign jurisdiction where it is located. If our
business increasingly operates in countries other than the U.S., or if there are changes in tax law or rates of taxation in foreign
jurisdictions where our corporate subsidiaries operate, AB's effective tax rate could increase.
If any audit by the Internal Revenue Service ("IRS") of our income tax returns for any of our taxable years beginning after
December 31, 2017 results in any adjustments, the IRS may collect any resulting taxes, including any applicable penalties
and interest, directly from us, in which case our net income and the cash available for quarterly Unitholder distributions may
be substantially reduced.
For taxable years beginning after December 31, 2017, a "partnership representative" that we designate (a “Partnership
Representative”) will have the sole authority to act on our behalf for purposes of, among other things, IRS audits and related
proceedings (and any similar state or local audits and proceedings). Any actions taken by us or by the Partnership
Representative on our behalf in connection with such audits or proceedings will be binding on us and our Unitholders.
For an audit of a partnership's taxable years beginning after December 31, 2017, the IRS, absent an election by the partnership
to the contrary (see discussion below),w generally determines adjustments at the partnership level in the year in which the audit
is resolved.
Generally, we will have the ability to collect any resulting tax liability (and any related interest and penalties) from our
Unitholders in accordance with their percentage interests during the year under audit, but there can be no assurance that we
will elect to do so or be able to do so under all circumstances. If we do not collect such tax liability from our Unitholders in
accordance with their percentage interests in the tax year under audit, our net income and the available cash for quarterly
distributions to current Unitholders may be substantially reduced. Accordingly, our current Unitholders may bear some or all of
the tax liability resulting from such audit adjustment, even if such Unitholders did not own Units during the tax year under audit.
In particular, with respect to AB Holding, our Partnership Representative may, in certain instances, request that any “imputed
under-payment” resulting from an audit be adjusted by amounts of certain of our passive losses. If we successfully make such
a request, we would have to reduce suspended passive loss carryovers in a manner which is binding on the partners.
In addition, for taxable years beginning after December 31, 2017, we may, but are not required to, make an election to require
our Unitholders to take into account on their income tax returns an audit adjustment made to our income tax items, also known
as a “push-out” election. This may also require Unitholders to provide certain information to us (possibly including information
about the beneficial owners of our Unitholders). Also, a partnership that is a partner of another partnership (such as AB Holding
with respect to AB) may elect to have its unitholders take an audit adjustment of the lower-tier partnership into account (i.e., the
upper-tier partnership may push adjustments received from the lower-tier partnership through to the partners of the upper-tier
partnership). There are several requirements to make a “push-out” election and we may be unable or unwilling to comply with
such requirements. If we do not make a “push-out” election, we would be required to pay any tax resulting from the adjustments
to our income tax items, and the cash available for distribution to unitholders would be substantially reduced.
Non-U.S. unitholders may be subject to withholding tax on the sale of their AB Units or AB Holding Units, as well as on
distributions, and we may be liable for any under-withholding.
Gain or loss from the sale or exchange of a partnership unit by a non-U.S. unitholder is treated as effectively connected with a
U.S. trade or business and is subject to U.S. federal income tax to the extent that the non-U.S. unitholder would have had
effectively connected gain or loss on a hypothetical sale by the partnership of all of its assets at fair market value as of the date
of the sale or exchange of the partnership units. In furtherance of the foregoing, a transferee of a partnership unit is required to
withhold a tax equal to 10% of the amount realized on any transfer of such a partnership unit unless an exception applies.
26
AllianceBernstein
Part I
Distributions by a PTP to a non-U.S. unitholder also are subject to U.S. withholding tax if the PTP has effectively connected
gross income, gain or loss.
A transferee is not required to withhold tax if it relies on a certification issued by the transferor or the underlying partnership
establishing that an exception to withholding applies. If a transferee of AB Units is required to withhold and failed to properly do
so, AB would be required to withhold on distributions to the transferee to satisfy that liability.
A broker is not required to withhold on the transfer of an interest in a PTP or on a distribution by a PTP if the PTP certifies that
the "10% exception" applies. This exception applies if, either (1) the PTP was not engaged in a U.S. trade or business during a
specified time period, or (2) upon a hypothetical sale of the PTP's assets at fair market value, (i) the amount of net gain that
would have been effectively connected with the conduct of a trade or business within the U.S. would be less than 10% of the
total net gain, or (ii) no gain would have been effectively connected with the conduct of a trade or business in the U.S.
To make this certification, the PTP must issue a "qualified notice" indicating that it qualifies for this exception, which we have
done and intend to continue to do. The qualified notice must state the amount of a distribution that is attributable to each type
of income group specified in the Treasury Regulations. The PTP must post each qualified notice on its primary public website
(and keep it accessible for 10 years) and deliver it to any registered holder that is a nominee. A broker may not rely on such a
certification if it has actual knowledge that the certification is incorrect or unreliable.
As a PTP, AB Holding may be liable for any under-withholding by a broker that relies on a qualified notice for which we failed to
make a reasonable estimate of the amounts required for determining the applicability of the 10% exception.
Item 1B. Unresolved Staff Comments
Neither AB nor AB Holding has unresolved comments from the staff of the SEC to report.
Item 1C. Cybersecurity
Cyber Risk Management and Strategy
We rely on digital technology to conduct our business operations and engage with our clients, business partners and
employees. The technology that we, our clients, business partners and employees rely upon becomes more complex over time
as do threats to our business operations from cyber intrusions, denial of service attacks, manipulation and other cyber
misconduct.
Information Security is an ongoing process of exercising the due care necessary to protect corporate, client and
employee information and systems from unauthorized access, destruction, disclosure, disruption and modification of use.
Through a combination of security, risk and compliance resources, AB implements Information Security through a dedicated
Information Security Program ("ISP") that is intended to identify, assess and manage material risks from cybersecurity threats
and which includes a focus on safeguarding information and assets from cyber threats, engaging in cyber threat monitoring
and responding to actual or potential cyber incidents. Our ISP is led by our Chief Information Security Officer ("CISO") who
actively partners with our Chief Compliance Officer ("CCO") and Chief Risk Officer "("CRO"). Ultimately, our ISP is part of our full
enterprise risk framework, which includes information technology, business continuity and resiliency,
in addition to
cybersecurity risk. Our ISP is coordinated with our broader risk management team,
including our Chief Security Officer.
Enterprise risk, including cybersecurity risk, is overseen by the Audit and Risk Committee on behalf of the Board.
Our CISO, with assistance from internal and external resources, is responsible for implementing and providing oversight of our
ISP. The ISP employs a defense-in-depth strategy: an information assurance concept in which multiple layers of security
controls are distributed throughout an operating environment. The concept manages risk with diverse defensive strategies, so
that if one layer of defense fails, another later of defense will attempt to compensate. Our ISP features cybersecurity policies,
standards and guidelines, committee governance, training, access controls and data controls. We periodically execute table top
exercises as a part of our ISP program.
2023 Annual Report
27
Part I
Our ISP, together with our risk and compliance resources, proactively manage the risk of threat from cybersecurity incidents
through (i) implementing protocols to take cybersecurity considerations into account in adopting and onboarding our
technology resources, (ii) monitoring IT controls to better ensure compliance with cybersecurity and other related legal and
regulatory requirements, (iii) assessing adherence by critical and material third parties we partner with to ensure that the
appropriate risk management standards are met, (iv) ensuring essential business functions remain available during a business
disruption, and (v) regularly developing and updating response plans to address potential IT or cyber incidents should they
occur. Our security, risk and compliance resources are designed to prioritize IT and cybersecurity risk areas, identify solutions
that minimize such risks, pursue optimal outcomes and maintain compliance standards. We also maintain an operational
incidents and triggers impact mitigation
security function that has a real time response capability that triages potential
protocols. Additionally, we utilize third parties to conduct periodic cybersecurity assessments and our internal audit function
includes certain cyber risk audits as part of its overall risk audit. We review the recommendations and findings from those
assessments and audits and implement corrective and other measures as appropriate. Our cybersecurity processes rely
predominantly on internal resources, but also include important third party resources for certain matters,
including the
aforementioned assessments as well as our continuous cybersecurity threat monitoring and initial incident reporting system.
As part of our ISP, we also perform cyber risk assessments on our critical and material third party vendors during onboarding,
then periodically thereafter.
We have not had a cybersecurity incident that has materially affected, or was reasonably likely to, materially affect our business
strategy, results of operations or financial condition. There are risks from cybersecurity threats that if they were to occur could
materially affect our business strategy, results of operations or financial condition, including those discussed in Item 1A Risk
Factors - Operations,s Technology and Cybeyy
r-Related Risks although we do not currently believe that such a result is
reasonably likely.
Cyber Risk Governance
information security,
The Audit and Risk Committee is responsible for assisting the Board with oversight of our enterprise risk framework, including
information technology and business continuity and resiliency. Our CISO and other
cybersecurity,
members of senior management including our General Counsel, CCO and CRO report quarterly to the Audit and Risk Committee
at its regular meetings on the status of the Company's cybersecurity risk, risk management policies and risk assessment
initiatives. the full Board is updated on an as needed basis. In the event of an immediate cyber threat to our business
operations, our ISP would involve our General Counsel, who would promptly notify the Chairperson of the Audit and Risk
Committee, as to the nature, timing and extent of the threat and our applicable contingency plans would go into effect. Our CRO,
in collaboration with our CISO, is responsible for notifying the Audit and Risk Committee of world events or of other significant
external events that may pose cybersecurity threats or material risks to our business continuity.
While our Board provides oversight of our cybersecurity risk environment, the ultimate responsibility for our processes for
identifying, assessing and managing cybersecurity risks resides with management. Our CISO, with assistance from internal and
external resources, is responsible for the implementation and providing oversight to our ISP within the organization and
maintaining the appropriate level of expertise to manage and implement cybersecurity policies, programs and strategies. Our
CISO has years of applied experience in actively managing cybersecurity and information security programs for large global
publicly traded companies with complex and evolving information systems. Management oversight of our ISP is provided by
various governance committees including the Operational Risk Oversight Committee, the Information Security Risk Oversight
Subcommittee and the Financial Crimes Control Oversight Subcommittee.
Item 2. Properties
Our headquarters is located at 501 Commerce Street, Nashville, Tennessee. We occupy 218,976 square feet of space at this
location under a 15-year lease agreement that commenced in the fourth quarter of 2020.
We lease space at our other principal location, 1345 Avenue of the Americas, New York, New York pursuant to a lease expiring
in 2024. At this location, we currently lease 999,963 square feet of space, within which we currently occupy approximately
512,284 square feet of space and have sub-let approximately 487,679 square feet of space.
Also, we entered into a 20-year lease agreement in New York, New York, at 66 Hudson Boulevard, for 166,015 square feet that
commenced in January 2024.
We also lease 50,792 square feet of space in San Antonio, Texas under a lease expiring in 2029.
Additionally, we lease 100,000 square feet of space in Pune, India under a lease expiring in 2033.
We lease more modest amounts of space in 27 other cities in the United States.
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Part I
Our subsidiaries lease space in 32 cities outside the United States, the most significant of which is a lease in London, England,
expiring in 2031, and in Hong Kong, China, under a lease expiring in 2027. In London we currently lease 60,732 square feet of
space. In Hong Kong, we currently lease and occupy 35,878 square feet of space.
Item 3. Legal Proceedings
With respect to all significant litigation matters, we consider the likelihood of a negative outcome. If we determine the likelihood
of a negative outcome is probable and the amount of the loss can be reasonably estimated, we record an estimated loss for the
expected outcome of the litigation. Any such accruals are adjusted thereafter as appropriate to reflect changed circumstances.
When we are able to do so, we also determine estimates of reasonably possible losses or ranges of reasonably possible losses
for such matters, whether in excess of any related accrued liability or where there is no accrued liability, and disclose an
estimate of the possible loss or range of losses. However, it is often difficult to predict the outcome or estimate a possible loss
or range of loss because litigation is subject to inherent uncertainties, particularly when plaintiffs allege substantial or
indeterminate damages. Such is particularly the case when the litigation is in its early stages or when the litigation is highly
complex or broad in scope. In these cases, we disclose that we are unable to predict the outcome or estimate a possible loss or
range of loss. As a result of these types of factors, we are unable, at this time, to estimate the losses that are reasonably
possible to be incurred or ranges of such losses with respect to our significant litigation matters.
On December 14, 2022, four individual participants in the Profit Sharing Plan for Employees of AB (the "AB Profit Sharing Plan")
filed a class action complaint (the "Complaint") in the U.S. District Court for the Southern District of New York against AB,
current and former members of the Compensation and Workplace Practices Committee of the Board of Directors, and the
Investment and Administrative Committees under the AB Profit Sharing Plan. Plaintiffs, who seek to represent a class of all
participants in the AB Profit Sharing Plan from December 14, 2016 to the present, allege that defendants violated their fiduciary
duties and engaged in prohibited transactions under ERISA by including proprietary collective investment trusts as investment
options offered in the AB Profit Sharing Plan. The Complaint seeks unspecified damages, disgorgement and other equitable
relief. AB is prepared to defend itself vigorously against these claims and filed a motion to dismiss on February 24, 2023. While
the outcome of this matter currently is not determinable given the matter remains in its early stages, we do not believe this
litigation will have a material adverse effect on our results of operations, financial condition or liquidity.
AB may be involved in various other matters, including regulatory inquiries, administrative proceedings and litigation, some of
which may allege significant damages. It is reasonably possible that we could incur losses pertaining to these matters, but we
cannot currently estimate any such losses.
Management, after consultation with legal counsel, currently believes that the outcome of any individual matter that is pending
or threatened, or all of them combined, will not have a material adverse effect on our results of operations, financial condition
or liquidity. However, any inquiry, proceeding or litigation has an element of uncertainty; management cannot determine
whether further developments relating to any individual matter that is pending or threatened, or all of them combined, will have
a material adverse effect on our results of operation, financial condition or liquidity in any future reporting period.
Item 4. Mine Safety Disclosures
Not applicable.
2023 Annual Report
29
Part II
Item 5. Market for Registrant’s Common Equity, Related Stockholder
Matters and Issuer Purchases of Equity Securities
Market for AB Holding Units and AB Units; Cash Distributions
AB Holding Units are listed on the NYSE and trade publicly under the ticker symbol “AB". There is no established public trading
market for AB Units, which are subject to significant restrictions on transfer. For information about these transfer restrictions,
see “Structure-related Risks” in Item 1A.
AB Holding’s principal source of income and cash flow is attributable to its limited partnership interests in AB.
Each of AB Holding and AB distributes on a quarterly basis all of its Available Cash Flow, as defined in the AB Holding
Partnership Agreement and the AB Partnership Agreement, respectively, to its Unitholders and the General Partner. For
additional information concerning distribution of Available Cash Flow by AB Holding, see Note 2 to AB Holding’s’
financial
statements in Item 8. For additional information concerning distribution of Available Cash Flow by AB, see Note 2 to AB’s
consolidated financial statements in Item 8.
On December 29, 2023 (the last trading day of the year), the closing price of an AB Holding Unit on the NYSE was $31.03 per
Unit. On December 31, 2023, there were (i) 871 AB Holding Unitholders of record for approximately 112,000 beneficial owners,
and (ii) 359 AB Unitholders of record (we do not believe there are substantial additional beneficial owners).
Recent Sales of Unregistered Securities; Use of Proceeds from
Registered Securities
We did not engage in any unregistered sales of our securities during the years ended December 31, 2023, 2022 and 2021,
except as previously disclosed in a Current Report on Form 8-K dated July 1, 2022 in connection with the acquisition of CarVal
Investors L.P.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
Each quarter, AB considers whether to implement a plan to repurchase AB Holding Units pursuant to Rules 10b5-1 and 10b-18
under the Exchange Act. We did not adopt a plan during the fourth quarter of 2023. AB may adopt additional plans in the future
to engage in open-market purchases of AB Holding Units to help fund anticipated obligations under the firm’s incentive
compensation award program and for other corporate purposes. For additional information about Rule 10b5-1 plans, see “Units
Outstanding” in Item 7.
30
AllianceBernstein
AB Holding Units bought by us or one of our affiliates during the fourth quarter of 2023 are as follows:
Issuer Purchases of Equity Securities
Part II
Total
Number of
AB Holding
Units
Purchased as
Part of
Publicly
Announced
Plans or
Programs
—
—
—
—
Maximum
Number (or
Approximate
Dollar Value)
of AB
Holding
Units that
May Yet Be
Purchased
Under the
Plans or
Programs
—
—
—
—
Total
Number of
AB Holding
Units
Purchased
Average
Price Paid
Per AB
Holding Unit,
net of
Commissions
191,411
$
3,309
2,157,787
2,352,507
$
30.47
30.38
29.09
29.20
Period
10/1/23-10/31/23(1)(2)
11/1/23-11/30/23(1)
12/1/23-12/31/23(1)
Total
(1) During the fourth quarter of 2023, AB retained from employees 2,166,396 AB Holding Units to allow them to fulfill statutory withholding tax
requirements at the time of distribution of long-term incentive compensation awards.
(2) During the fourth quarter of 2023, AB purchased 186,111 AB Holding Units on the open market pursuant to a Rule 10b5-1 plan to help fund
anticipated obligations under our incentive compensation award program.
2023 Annual Report
31
Part II
Item 6. [Reserved]
Item 7. Management’s Discussion and Analysis of Financial Condition
and Results of Operations
Executive Overview(1)
Our total Assets Under Management ("AUM") as of December 31, 2023 were $725.2 billion, up $78.8 billion, or 12.2%, during
2023. The increase was driven by market appreciation of $85.8 billion, offset by net outflows of $7.0 billion (reflecting
Institutional net outflows of $11.8 billion, offset by Retail net inflows of $3.7 billion and Private Wealth Management net inflows
of $1.1 billion).
Institutional AUM increased $19.8 billion, or 6.7%, to $317.1 billion during 2023, primarily due to market appreciation of $31.5
billion, partially offset by net outflows of $11.8 billion. Gross sales decreased $20.4 billion, from $32.2 billion in 2022 to $11.8
billion in 2023. Redemptions and terminations decreased $0.7 billion, from $13.3 billion in 2022 to $12.6 billion in 2023.
Retail AUM increased $43.9 billion, or 18.1%, to $286.8 billion during 2023, primarily due to market appreciation of $40.3 billion
and net inflows of $3.7 billion. Gross sales increased $5.2 billion, from $65.9 billion in 2022 to $71.1 billion in 2023.
Redemptions and terminations decreased $8.2 billion, from $66.3 billion in 2022 to $58.1 billion in 2023.
Private Wealth Management AUM increased $15.1 billion, or 14.1%, to $121.3 billion during 2023, due to market appreciation of
$14.0 billion and net inflows of $1.1 billion. Gross sales increased $1.1 billion, from $17.5 billion in 2022 to $18.6 billion in
2023. Redemptions and terminations increased $1.7 billion, from $15.8 billion in 2022 to $17.5 billion in 2023.
Bernstein Research Services ("BRS") revenue decreased $30.1 million, or 7.2%, in 2023. The decrease was primarily driven by
significantly lower global customer trading activity due to the prevailing macro-economic environment. In the fourth quarter of
2022, AB and Société Générale (EURONEXT: GLE, “SocGen”), a leading European bank, announced plans to form a joint venture
combining their respective cash equities and research businesses. As a result, the BRS business has been classified as held for
sale. For further discussion, see Note 24 Acquisitions and Divestitures to our consolidated financial statements in Item 8.
Our 2023 net revenues of $4.2 billion increased $101.0 million, or 2.5%, compared to net revenues of $4.1 billion in the prior
year. The increase was primarily driven by investment gains in the current year compared to investment losses in the prior year
(impact of $116.6 million), higher net dividend and interest income of $35.2 million and higher base advisory fees of $4.8
million, partially offset by lower Bernstein Research Services revenue of $30.1 million and lower distribution revenues of $20.9
million.
Our operating expenses of $3.3 billion increased $98.5 million, or 3.0%, compared to the prior year. The increase was primarily
driven by higher employee compensation and benefits expenses of $102.5 million, higher interest on borrowings of $36.5
million, higher amortization of intangibles of $20.3 million and higher contingent payment arrangements of $16.3 million,
partially offset by lower general and administrative expenses of $60.1 million and lower promotion and servicing expenses of
$17.1 million. Our operating income increased $2.6 million, or 0.3%, to $817.7 million from $815.1 million in 2022 and our
operating margin decreased to 19.1% in 2023 from 21.5% in 2022.
Market Environment
U.S. Equities
U.S. Equity markets registered strong gains in the final quarter of 2023, buoyed by slowing inflation data and expectations that
the U.S. Federal Reserve (the "Fed") has finished its rate hiking cycle and will move towards cuts in 2024. Market breadth
improved in the fourth quarter, with share price appreciation moving beyond mega-cap technology stocks. Both the cap-
weighted S&P 500 and the equal-weighted S&P 500 returned positive 12% in the fourth quarter (including dividends). Previously
lagging segments of the market rebounded, with Small-Caps (market capitalization ranges between $250 million to $2 billion)
and Mid-Caps (market capitalization ranges between $2 billion to $10 billion) outperforming Large-Caps (market capitalization
above $10 billion) with the Russell 2000 index posting a positive 14% return in the fourth quarter and Value stocks
outperforming Growth stocks in the fourth quarter.
1 Percentage change figures are calculated using assets under management rounded to the nearest million, while financial statement amounts
are rounded to the nearest hundred thousand.
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Part II
Despite the broadening rally in late 2023, annual index returns were largely concentrated within the "Magnificent-7" companies:
a term coined for Apple, Amazon, Alphabet, Meta Platforms, Microsoft, NVIDIA and Tesla which were perceived as the main
beneficiaries of the Artificial Intelligence revolution. These seven companies boast the largest market capitalization values in
the S&P 500 and account for more than a quarter of the index, disproportionally driving the capitalization-weighted S&P 500's
2023 total return of positive 26% versus positive 14% for the equal-weighted version.
Global and Non-U.S. Equities
Moderating inflation data and peaking interest rates drove nearly unilateral gains beyond U.S. equity markets (MSCI World Index
was positive 11.4% in the fourth quarter). Within the Eurozone, annual inflation fell to 2.4% (as of November 2023) from 10.1% a
year ago, sending the MSCI European Economic and Monetary Union index 7.8% higher in the fourth quarter. In the U.K., gains
were led by Small-Cap and Mid-Cap indices while Large-Cap lagged on account of a strengthening GBP (sterling). Japan's
TOPIX trading index posted a positive 2.0% total return despite a volatile quarter and overall Emerging Market equities were
strong in the fourth quarter, albeit lagging Developed Markets. All markets in the MSCI Asia (ex Japan) index ended the quarter
positively, apart from China, where lackluster growth continues to be a drag on asset prices.
Global Bonds
Fixed income markets experienced their strongest quarterly performance in over 20 years, as indicated by the Bloomberg
Global Aggregate indices. This was primarily driven by a perceived shift in monetary policy direction, with expectations of rate
cuts replacing the previous "higher-for-longer" narrative. As a result, government bond yields fell significantly, and credit
markets outperformed government bonds. The Fed maintained its rates throughout the quarter, but a more dovish tone in
December accelerated the market rally. The revised dot plot, which plots the Federal Open Market Committee's ("FOMC")
projections for the federal funds rate, now anticipates three rate cuts in 2024, up from the previous expectation of two. The
FOMC appears more comfortable with the progress made in bringing inflation back towards the target, as indicated by positive
news on the Personal Consumption Expenditures Price Index, which is the Fed's most closely watched measure.
Relationship with EQH and its Subsidiaries
EQH (our parent company) and its subsidiaries are our largest client. EQH is collaborating with AB in order to improve the risk-
adjusted yield for the General Accounts of EQH's insurance subsidiaries by investing additional assets at AB, including the
utilization of AB's higher-fee, longer-duration alternative offerings. In mid-2021, Equitable Financial Life Insurance Company, a
subsidiary of EQH ("Equitable Financial"), agreed to provide an initial $10 billion in permanent capital to build out AB's private
is
illiquid offerings,
approximately 90% completed and is expected to continue over the next year. In addition, during the second quarter of 2023,
EQH committed to provide an additional $10 billion in permanent capital, which will begin following the completion of the initial
$10 billion commitment. We expect this anticipated capital from Equitable Financial will continue to accelerate both organic
and inorganic growth in our private alternatives business, allowing us to continue to deliver for our clients, employees,
unitholders and other stakeholders. For example, included in the initial $10 billion commitment by EQH is $750 million in capital
to be deployed through AB CarVal.
including private alternatives and private placements. Deployment of
this capital commitment
Permanent capital means investment capital of indefinite duration, for which commitments may be withdrawn under certain
conditions. Such conditions primarily include potential regulatory restrictions, lacking sufficient liquidity to fund the capital
commitments to AB and AB's inability to identify attractive investment opportunities which align with the investment strategy.
Although EQH’s insurance subsidiaries have indicated their intention over time to provide this investment capital to AB, they
have no binding commitment to do so. While the withdrawal of their commitment could potentially slow down our introduction
of certain products, the impact to our overall operations would not be material.
Relocation Strategy
As previously announced, we have established our corporate headquarters in Nashville, TN, at 501 Commerce Street. Our
Nashville headquarters houses Finance, IT, Operations, Legal, Compliance, Internal Audit, Human Capital, and Sales and
Marketing, and at year-end 2023 we had 1,048 employees in Nashville. We will continue to maintain a principal location in New
York City, which houses our Portfolio Management, Sell-Side Research and Trading, and New York-based Private Wealth
Management businesses.
We believe relocating our corporate headquarters to Nashville affords us the opportunity to provide an improved quality of life
alternative for our employees and enables us to attract and recruit new talented employees to a highly desirable location while
improving the long-term cost structure of the firm.
During the transition period, which began in 2018 and is expected to continue through 2024, we currently estimate that we will
incur transition costs of between $145 million to $155 million. These costs include employee relocation, severance,
recruitment, and overlapping compensation and occupancy costs. Over this same period, we expect to realize total expense
savings of between $205 million to $215 million. However, we did incur some transition costs before we began to realize
2023 Annual Report
33
Part II
expense savings. For the period beginning in 2018 and ending in the fourth quarter of 2023, we incurred $140 million of
cumulative transition costs compared to $175 million of cumulative savings. We incurred $20 million of transition costs for the
twelve months ended December 31, 2023, compared to $43 million of expense savings, resulting in an overall net savings of
$23 million for the period. In 2023, our net income per unit ("EPU") increased $0.08 as a result of our relocation strategy, which
compares to the $0.07 EPU increase that occurred in 2022. We also expect to achieve EPU accretion in each future year.
Beginning in 2025, once the transition period has been completed, we estimate ongoing annual expense savings of
approximately $75 million, which will result from a combination of occupancy and compensation-related savings. Our
estimates for both the transition costs and the corresponding expense savings are based on our current assumptions of
employee relocation costs, severance, and overlapping compensation and occupancy costs. In addition, our estimates for both
the timing of when we incur transition costs and realize the related expense savings are based on our current relocation
implementation plan and the timing for execution of each phase. The actual total charges we eventually record, the related
expense savings we realize, and the timing of EPU impact may differ from our current estimates as we implement each phase
of our headquarters relocation.
During October 2018, we signed a lease, which commenced in the fourth quarter of 2020, relating to 218,976 square feet of
space at our new Nashville headquarters. Our estimated total base rent obligation (excluding taxes, operating expenses and
utilities) over the 15-year initial lease term is $134 million.
Although we have presented many of our transition costs and annual expense savings with numerical specificity, and we
believe these targets to be reasonable as of the date of this report, the uncertainties surrounding the assumptions we discuss
above create a significant risk that these targets may not be achieved. Accordingly, the expenses we actually incur and the
savings we actually realize may differ from our targets, particularly if actual events adversely differ from one or more of our key
assumptions. The transition costs and expense savings, together with their underlying assumptions, are Forward-Looking
Statements and can be affected by any of the factors discussed in “Risk Factors” and “Cautions Regarding Forward-Looking
Statements” in this 2023 10-K. We strongly caution investors not to place undue reliance on any of these assumptions or our
cost and expense targets. Except as may be required by applicable securities laws, we are not under any obligation, and we
expressly disclaim any obligation, to update or alter any assumptions, estimates, financial goals, targets, projections or other
related statements that we may make.
AB Holding
AB Holding’s principal source of income and cash flow is attributable to its investment in AB Units. The AB Holding financial
statements, notes to the financial statements and management’s discussion and analysis of financial condition and results of
operations (“MD&A”) should be read in conjunction with those of AB.
Results of Operations
Years Ended December 31
% Change
2023
2022
2021
2023-22
2022-21
(in thousands, except per unit amounts)
Net income attributable to AB Unitholders
$ 764,610
$ 831,813
$1,148,623
(8.1%)
(27.6%)
Weighted average equity ownership interest
39.2%
36.7%
36.2%
Equity in net income attributable to AB Unitholders
$ 299,781
$ 305,504
$ 416,326
Income taxes
Net income of AB Holding
Diluted net income per AB Holding Unit
Distributions per AB Holding Unit (1)
35,597
31,339
30,483
$ 264,184
$ 274,165
$ 385,843
$
$
2.34
2.69
$
$
2.69
2.95
$
$
3.88
3.90
(1.9)
13.6
(3.6)
(13.0)
(8.8)
(26.6)
2.8
(28.9)
(30.7)
(24.4)
(1) Distributions reflect the impact of AB’s non-GAAP adjustments.
AB Holding had net income of $264.2 million in 2023 compared to $274.2 million in 2022, reflecting lower net income
attributable to AB Unitholders, partially offset by higher weighted average equity ownership interest. AB Holding had net income
of $274.2 million in 2022 compared to $385.8 million in 2021, reflecting lower net income attributable to AB Unitholders,
partially offset by higher weighted average equity ownership interest.
AB Holding's partnership gross income is derived from its interest in AB. AB Holding’s income taxes, which reflect a 3.5%
federal tax on its partnership gross income from the active conduct of a trade or business, are computed by multiplying certain
AB qualifying revenues by AB Holding’s ownership interest in AB, multiplied by the 3.5% tax rate. Certain AB qualifying revenues
are primarily U.S. investment advisory fees, research payments and brokerage commissions. AB Holding’s effective tax rate
was 11.9% in 2023, 10.3% in 2022 and 7.3% in 2021. The increase in AB Holdings effective tax rate is primarily due to the
34
AllianceBernstein
Part II
increase in the weighted average equity ownership interest. See Note 6 to AB Holding’s’
further description.
financial statements in Item 8 for a
As supplemental information, AB provides the performance measures “adjusted net revenues,” “adjusted operating income”
and “adjusted operating margin,” which are the principal metrics management uses in evaluating and comparing the period-to-
period operating performance of AB. Management principally uses these metrics in evaluating performance because they
present a clearer picture of AB's operating performance and allow management to see long-term trends without the distortion
primarily caused by long-term incentive compensation-related mark-to-market adjustments, acquisition-related expenses,
interest expense and other adjustment items. Similarly, management believes that these management operating metrics help
investors better understand the underlying trends in AB's results and, accordingly, provide a valuable perspective for investors.
Such measures are not based on generally accepted accounting principles (“non-GAAP measures”).
We provide the non-GAAP measures "adjusted net income" and "adjusted diluted net income per unit" because our quarterly
distribution per unit is typically our adjusted diluted net income per unit (which is derived from adjusted net income).
These non-GAAP measures are provided in addition to, and not as substitutes for, net revenues, operating income and
operating margin, and they may not be comparable to non-GAAP measures presented by other companies. Management uses
both GAAP and non-GAAP measures in evaluating the company’s financial performance. The non-GAAP measures alone may
pose limitations because they do not include all of AB’s revenues and expenses. Further, adjusted diluted net income per AB
Holding Unit is not a liquidity measure and should not be used in place of cash flow measures. See “Management Operating
Metrics” in this Item 7.
The impact of these adjustments on AB Holding’s net income and diluted net income per AB Holding Unit are as follows:
AB non-GAAP adjustments2
AB Income tax (expense) benefit on non-GAAP adjustments
AB non-GAAP adjustments, after taxes
Years Ended December 31
2023
2022
2021
(in thousands, except per unit amounts)
$ 103,164
$ 75,745
$
2,959
(2,786)
100,378
(6,395)
69,350
71
3,030
AB Holding’s weighted average equity ownership interest in AB
39.2%
36.7%
36.2%
Impact on AB Holding’s net income of AB non-GAAP adjustments
$ 39,355
$ 25,468
$
1,098
Net income - diluted, GAAP basis
$ 264,184
$ 274,167
$ 385,873
Impact on AB Holding’s net income of AB non-GAAP adjustments
39,355
25,468
1,098
Adjusted net income - diluted
Diluted net income per AB Holding Unit, GAAP basis
Impact of AB non-GAAP adjustments
Adjusted diluted net income per AB Holding Unit
$ 303,539
$ 299,635
$ 386,971
$
$
2.34
0.35
2.69
$
$
2.69
0.25
2.94
$
$
3.88
0.01
3.89
The degree to which AB’s non-GAAP adjustments impact AB Holding’s net income fluctuates based on AB Holding's ownership
percentage in AB.
Tax Legislation
For a discussion of tax legislation, see “Risk Factors - Structure-related Risks” in Item 1A.
Capital Resources and Liquidity
During the year ended December 31, 2023, net cash provided by operating activities was $294.0 million, compared to $362.6
million during the corresponding 2022 period. The decrease primarily resulted from lower cash distributions received from AB
of $64.6 million. During the year ended December 31, 2022, net cash provided by operating activities was $362.6 million,
compared to $355.1 million during the corresponding 2021 period. The increase primarily resulted from higher cash
distributions received from AB of $9.3 million.
During the years ended December 31, 2023, 2022 and 2021, net cash used in investing activities was zero, $1.8 million and $3.4
million, respectively, reflecting investments in AB with proceeds from exercises of compensatory options to buy AB Holding
Units and capital contributions to AB.
2 Includes all AB non-GAAP adjustments to pre-tax income.
2023 Annual Report
35
Part II
During the year ended December 31, 2023, net cash used in financing activities was $294.0 million, compared to $360.8 million
during the corresponding 2022 period. The decrease was primarily due to lower cash distributions to Unitholders of $64.9
million and higher capital contributions from AB of $2.2 million. During the year ended December 31, 2022, net cash used in
financing activities was $360.8 million, compared to $351.7 million during the corresponding 2021 period. The increase was
due to cash distributions to Unitholders of $3.5 million and proceeds from exercise of compensatory options to buy AB Holding
Units of $3.2 million, offset by lower capital contributions from AB of $2.3 million.
Management believes that AB Holding will have the resources it needs to meet its financial obligations as a result of the cash
flow AB Holding realizes from its investment in AB. AB Holding’s cash inflow is comprised entirely of distributions from AB.
These distributions are subsequently distributed (net of taxes paid) in their entirety to AB Holding’s Unitholders. As a result, AB
Holding has no liquidity risk as it only pays distributions to AB Holding’s Unitholders to the extent of distributions received from
AB (net of taxes paid).
Cash Distributions
AB Holding is required to distribute all of its Available Cash Flow, as defined in the AB Holding Partnership Agreement, to its
Unitholders (including the General Partner). Available Cash Flow typically is the adjusted diluted net income per unit for the
quarter multiplied by the number of units outstanding at the end of the quarter. Management anticipates that Available Cash
Flow will continue to be based on adjusted diluted net income per unit, unless management determines, with concurrence of
the Board of Directors, that one or more adjustments made to adjusted net income should not be made with respect to the
Available Cash Flow calculation. See Note 2 to AB Holding’s’
financial statements in Item 8 for a description of Available
Cash Flow.
Commitments and Contingencies
For a discussion of commitments and contingencies, see Note 7 to AB Holding’s’
financial statements in Item 8.
AB
Assets Under Management
Assets under management by distribution channel are as follows:
Institutions
Retail
Private Wealth Management
Total
As of December 31
% Change
2023
2022
2021
2023-22
2022-21
(in billions)
$
$
317.1
286.8
121.3
297.3
242.9
106.2
$
$
725.2
$
646.4
$
337.1
319.9
121.6
778.6
6.7%
(11.8%)
18.1
14.1
(24.1)
(12.6)
12.2 %
(17.0)%
36
AllianceBernstein
Assets under management by investment service are as follows:
As of December 31
% Change
2023
2022
2021
2023-22
2022-21
(in billions)
Part II
Equity
Actively Managed
Passively Managed(1)
Total Equity
Fixed Income
Actively Managed
Taxable
Tax–exempt
Total
Passively Managed(1)
$
247.5
$
217.9
$
287.6
62.1
309.6
208.6
61.1
269.7
11.4
281.1
125.9
8.6
134.5
725.2
$
53.8
271.7
190.3
52.5
242.8
9.4
252.2
115.8
6.7
122.5
646.4
$
71.6
359.2
246.3
57.1
303.4
13.2
316.6
97.3
5.5
102.8
778.6
Total Fixed Income
Alternatives/Multi-Asset Solutions(2)
Actively Managed
Passively Managed(1)
Total Alternatives/Multi-Asset Solutions
Total
$
(1)
(2)
Includes index and enhanced index services.
Includes certain multi-asset solutions and services not included in equity or fixed income services.
13.6%
15.3
13.9
(24.2%)
(24.8)
(24.3)
9.6
16.3
11.1
21.0
11.5
8.7
29.7
9.8
(22.8)
(7.9)
(20.0)
(28.9)
(20.3)
19.1
21.5
19.2
12.2%
(17.0%)
2023 Annual Report
37
Part II
Changes in assets under management during 2023 and 2022 are as follows:
Balance as of December 31, 2022
$
297.3
$
242.9
$
106.2
$
646.4
Distribution Channel
Institutions
Retail
Private
Wealth
Management
Total
(in billions)
Long-term flows:
Sales/new accounts
Redemptions/terminations
Cash flow/unreinvested dividends
Net long-term (outflows) inflows
Transfers
Market appreciation
Net change
Balance as of December 31, 2023
Balance as of December 31, 2021
Long-term flows:
Sales/new accounts
Redemptions/terminations
Cash flow/unreinvested dividends
Net long-term inflows (outflows)(1)
Adjustments(2)
Acquisitions(3)
Transfers
Market (depreciation)
Net change
$
$
$
$
11.8
(12.6)
(11.0)
(11.8)
0.1
31.5
19.8
317.1
337.1
32.2
(13.3)
(12.6)
6.3
(0.4)
12.2
(0.1)
(57.8)
(39.8)
$
$
71.1
(58.1)
(9.3)
3.7
(0.1)
40.3
43.9
286.8
319.9
65.9
(66.3)
(11.2)
(11.6)
—
—
0.1
(65.5)
(77.0)
$
$
18.6
(17.5)
—
1.1
—
14.0
15.1
121.3
121.6
17.5
(15.8)
—
1.7
—
—
—
(17.1)
(15.4)
101.5
(88.2)
(20.3)
(7.0)
—
85.8
78.8
725.2
778.6
115.6
(95.4)
(23.8)
(3.6)
(0.4)
12.2
—
(140.4)
(132.2)
Balance as of December 31, 2022
$
297.3
$
242.9
$
106.2
$
646.4
(1) Net flows include $4.5 billion of AXA redemptions for 2022.
(2) Approximately $0.4 billion of Institutional AUM was removed from our total assets under management during the second quarter of 2022
due to a change in the fee structure.
(3) The CarVal acquisition added approximately $12.2 billion of Institutional AUM in the third quarter of 2022.
38
AllianceBernstein
Part II
Investment Service
Equity
Actively
Managed
Equity
Passively
Managed(1)
Fixed
Income
Actively
Managed-
Taxable
Fixed
Income
Actively
Managed-
Tax-
Exempt
(in billions)
Fixed
Income
Passively
Managed(1)
Alternatives/
Multi-Asset
Solutions(2)
Total
Balance as of December 31, 2022
$ 217.9
$
53.8
$ 190.3
$
52.5
$
9.4
$ 122.5
$ 646.4
Long-term flows:
Sales/new accounts
Redemptions/terminations
Cash flow/unreinvested dividends
t long-term (outflows) inflows
rket appreciation
Net change
37.3
(43.8)
(9.0)
(15.5)
45.1
29.6
1.3
(0.3)
(5.0)
(4.0)
12.3
8.3
36.4
(27.3)
(2.5)
6.6
11.7
18.3
16.5
(11.1)
0.3
5.7
2.9
8.6
1.7
(0.3)
0.1
1.5
0.5
2.0
8.3
(5.4)
(4.2)
(1.3)
13.3
12.0
101.5
(88.2)
(20.3)
(7.0)
85.8
78.8
Balance as of December 31, 2023
$ 247.5
$
62.1
$ 208.6
$
61.1
$
11.4
$ 134.5
$ 725.2
Balance as of December 31, 2021
$ 287.6
$
71.6
$ 246.3
$
57.1
$
13.2
$ 102.8
$ 778.6
Long-term flows:
Sales/new accounts
Redemptions/terminations
Cash flow/unreinvested dividends
Net long-term (outflows) inflows(3)
Adjustments(4)
Acquisitions(5)
Market (depreciation)
Net change
46.0
(39.0)
(9.7)
(2.7)
—
—
(67.0)
(69.7)
1.8
(3.1)
(4.0)
(5.3)
—
—
(12.5)
(17.8)
25.5
(32.6)
(10.8)
(17.9)
—
—
(38.1)
(56.0)
16.0
(15.0)
(0.4)
0.6
—
—
(5.2)
(4.6)
(0.1)
(1.5)
0.3
(1.3)
—
—
(2.5)
(3.8)
26.4
(4.2)
0.8
23.0
(0.4)
12.2
(15.1)
19.7
115.6
(95.4)
(23.8)
(3.6)
(0.4)
12.2
(140.4)
(132.2)
Balance as of December 31, 2022
$ 217.9
$
53.8
$ 190.3
$
52.5
$
9.4
$ 122.5
$ 646.4
(1)
(2)
Includes index and enhanced index services.
Includes certain multi-asset solutions and services not included in equity or fixed income services.
(3) Net flows include $4.5 billion of AXA redemptions for 2022.
(4) Approximately $0.4 billion of Institutional AUM was removed from our total assets under management during the second quarter of 2022
due to a change in the fee structure.
(5) The CarVal acquisition added approximately $12.2 billion of Institutional AUM in the third quarter of 2022.
2023 Annual Report
39
Part II
Net long-term (outflows) inflows for actively managed investment services as compared to passively managed investment
services during 2023 and 2022 are as follows:
Actively Managed
Equity
Fixed Income
Alternatives/Multi- Asset Solutions
Total
Passively Managed
Equity
Fixed Income
Alternatives/Multi- Asset Solutions
Total
Years Ended December 31
2023
2022
(in billions)
$
(15.5)
$
12.3
(2.0)
(5.2)
(4.0)
1.5
0.7
(1.8)
(2.7)
(17.3)
20.9
0.9
(5.3)
(1.3)
2.1
(4.5)
Total net long-term (outflows)
$
(7.0)
$
(3.6)
Average assets under management by distribution channel and investment service are as follows:
Distii
ritt buii
tion Channel:
Institutions
Retail
Private Wealth Management
Total
Investmett
nt Servicvv e:
Equity Actively Managed
Equity Passively Managed(1)
Fixed Income Actively Managed – Taxable
Fixed Income Actively Managed – Tax-exempt
Fixed Income Passively Managed(1)
Alternatives/Multi-Asset Solutions(2)
Total
Years Ended December 31
% Change
2023
2022
2021
2023-22
2022-21
(in billions)
304.6
262.0
113.7
680.3
231.5
57.7
198.3
56.0
9.7
127.1
680.3
$
$
$
$
308.4
267.8
110.3
686.5
239.7
60.4
210.0
54.1
11.5
110.8
686.5
$
$
$
$
$
$
$
325.7
291.0
114.1
730.8
252.2
68.7
253.1
53.8
9.6
93.4
(1.2%)
(2.1)
3.0
(0.9)%
(3.4)
(4.5)
(5.6)
3.4
(15.2)
14.8
(5.3%)
(8.0)
(3.3)
(6.1)%
(4.9)
(12.1)
(17.1)
0.6
20.2
18.6
$
730.8
(0.9)%
(6.1)%
(1)
(2)
Includes index and enhanced index services.
Includes certain multi-asset solutions and services not included in equity or fixed income services.
40
AllianceBernstein
Part II
During 2023, our Institutional channel average AUM of $304.6 billion decreased $3.8 billion, or 1.2%, compared to 2022, while
ending AUM increased $19.8 billion, or 6.7%, to $317.1 billion from December 31, 2022. The $19.8 billion increase in AUM
resulted primarily from market appreciation of $31.5 billion (with $22.7 billion of market appreciation occurring in the fourth
quarter of 2023), partially offset by net outflows of $11.8 billion. During 2022, our Institutional channel average AUM of $308.4
billion decreased $17.3 billion, or 5.3%, compared to 2021, primarily due to this AUM decreasing $39.8 billion, or 11.8%, to
$297.3 billion from December 31, 2021. The $39.8 billion decrease in AUM resulted primarily from market depreciation of $57.8
billion, partially offset by an addition of $12.2 billion due to the acquisition of CarVal and net inflows of $6.3 billion.
During 2023, our Retail channel average AUM of $262.0 billion decreased $5.8 billion, or 2.1%, compared to 2022, while ending
AUM increased $43.9 billion, or 18.1%, to $286.8 billion from December 31, 2022. The $43.9 billion increase in AUM resulted
primarily from market appreciation of $40.3 billion (with $26.3 billion of market appreciation occurring in the fourth quarter of
2023) and net inflows of $3.7 billion. During 2022, our Retail channel average AUM of $267.8 billion decreased $23.2 billion, or
8.0%, compared to 2021, primarily due to this AUM decreasing $77.0 billion, or 24.1%, to $242.9 billion from December 31,
2021. The $77.0 billion decrease in AUM resulted primarily from market depreciation of $65.5 billion and net outflows of $11.6
billion.
During 2023, our Private Wealth Management channel average AUM of $113.7 billion increased $3.4 billion, or 3.0%, compared
to 2022, primarily due to this AUM increasing $15.1 billion, or 14.1%, to $121.3 billion from December 31, 2022. The $15.1 billion
increase in AUM resulted from market appreciation of $14.0 billion (with $9.0 billion of market appreciation occurring in the
fourth quarter of 2023) and net inflows of $1.1 billion. During 2022, our Private Wealth Management channel average AUM of
$110.3 billion decreased $3.8 billion, or 3.3%, compared to 2021, primarily due to this AUM decreasing $15.4 billion, or 12.6%, to
$106.2 billion from December 31, 2021. The $15.4 billion decrease in AUM resulted from market depreciation of $17.1 billion,
offset by net inflows of $1.7 billion.
Absolute investment composite returns, gross of fees, and relative performance as of December 31, 2023 compared to
benchmarks for certain representative Institutional equity and fixed income services are as follows:
1-Year
3-Year(1)
5-Year(1)
Income - Hedged (fixed income)
Absolute return
Relative return (vs. Bloomberg Barclays Global High Yield Index - Hedged)
High Income (fixed income)
Absolute return
Relative return (vs. Bloomberg Barclays U.S. Aggregate Index)
Global Plus - Hedged (fixed income)
Absolute return
Relative return (vs. Bloomberg Barclays Global Aggregate Index - Hedged
)
Intermediate Municipal Bonds (fixed income)
Absolute return
Relative return (vs. Lipper Short/Int. Blended Muni Fund Avg)
U.S. Strategic Core Plus (fixed income)
Absolute return
Relative return (vs. Bloomberg Barclays U.S. Aggregate Index)
Emerging Market Debt (fixed income)
Absolute return
Relative return (vs. JPM EMBI Global/JPM EMBI)
9.7%
4.2
15.1
1.4
7.7
0
.6
5.6
0.9
6.2
0.6
12.6
2.2
(0.8%)
2.5
2.3
1.1
(1.8)
0.3
0.6
0.7
(2.9)
0.4
(3.5)
(0.3)
3.3%
2.0
5.1
0.6
1.8
0.4
2.4
0.8
1.6
0.5
2.3
0.3
2023 Annual Report
41
Part II
Sustainable Global Thematic
Absolute return
Relative return (vs. MSCI ACWI Index)
International Strategic Core Equity
Absolute return
Relative return (vs. MSCI EAFE Index)
U.S. Small & Mid Cap Value
Absolute return
Relative return (vs. Russell 2500 Value Index)
U.S. Strategic Value
Absolute return
Relative return (vs. Russell 1000 Value Index)
U.S. Small Cap Growth
Absolute return
Relative return (vs. Russell 2000 Growth Index)
U.S. Large Cap Growth
Absolute return
Relative return (vs. Russell 1000 Growth Index)
U.S. Small & Mid Cap Growth
Absolute return
Relative return (vs. Russell 2500 Growth Index)
Concentrated U.S. Growth
Absolute return
Relative return (vs. S&P 500 Index)
Select U.S. Equity
Absolute return
Relative return (vs. S&P 500 Index)
Strategic Equities
Absolute return
Relative return (vs. Russell 3000 Index)
Global Core Equity
Absolute return
Relative return (vs. MSCI ACWI Index)
U.S. Strategic Core Equity
Absolute return
Relative return (vs. S&P 500 Index)
Select U.S. Equity Long/Short
Absolute return
Relative return (vs. S&P 500 Index)
Global Strategic Core Equity
Absolute return
Relative return (vs. S&P 500 Index)
(1) Reflects annualized returns.
42
AllianceBernstein
1-Year
3-Year(1)
5-Year(1)
17.0
(5.2)
16.6
(1.6)
18.0
2.0
19.7
8.2
19.1
0.5
35.8
(6.8)
19.7
0.8
19.4
(6.9)
20.1
(6.2)
25.8
(0.2)
21.0
(1.2)
21.1
(5.2)
12.6
(13.6)
20.3
(4.0)
2.1
(3.6)
3.6
(0.4)
11.1
2.3
13.0
4.1
(6.7)
(3.2)
8.0
(0.9)
(4.8)
(2.1)
6.6
(3.4)
11.1
1.1
9.5
0.9
5.1
(0.6)
11.2
1.2
7.1
(2.9)
11.1
1.7
14.5
2.7
7.3
(0.9)
11.7
0.9
12.2
1.2
11.6
2.4
18.2
(1.3)
11.9
(0.5)
15.7
—
15.8
0.1
15.0
(0.2)
10.7
(1.0)
14.5
(1.2)
10.3
(5.4)
13.0
(0.9)
Consolidated Results of Operations
Net revenues
Expenses
Operating income
Income taxes
Net income
Part II
Years Ended December 31
% Change
2023
2022
2021
2023-22
2022-21
(in thousands, except per unit amounts)
$4,155,323
$4,054,290
$4,441,602
2.5 %
(8.7%)
3,337,653
3,239,194
817,670
29,051
788,619
815,096
39,639
3,225,140
1,216,462
62,728
775,457
1,153,734
3.0
0.3
(26.7)
1.7
0.4
(33.0)
(36.8)
(32.8)
Net income (loss) of consolidated entities
attributable to non-controlling interests
24,009
(56,356)
5,111
n/m
n/m
Net income attributable to AB Unitholders
$ 764,610
$ 831,813
$1,148,623
Diluted net income per AB Unit
Distributions per AB Unit
Operating margin(1)
$
$
$
$
2.65
3.00
19.1 %
$
$
3.01
3.26
21.5%
4.18
4.19
27.3%
(8.1)
(12.0)
(8.0)
(27.6)
(28.0)
(22.2)
(1) Operating income excluding net income (loss) attributable to non-controlling interests as a percentage of net revenues.
Net income attributable to AB Unitholders for the year ended December 31, 2023 decreased $67.2 million from the year ended
December 31, 2022. The decrease primarily is due to (in millions):
Higher employee compensation and benefits
$
(102.5)
Higher net gains of consolidated entities attributable to non-controlling interest
Higher interest on borrowings
Lower Bernstein Research Services revenue
Lower distribution revenues
Higher amortization of intangible assets
Higher contingent payment arrangements
Higher investment gains
Lower general and administrative expenses
Higher net dividend and interest income
Lower promotion and servicing expenses
Lower income taxes
Other
(80.4)
(36.5)
(30.1)
(20.9)
(20.3)
(16.3)
116.6
60.1
35.2
17.1
10.6
0.2
$
(67.2)
2023 Annual Report
43
Part II
Net income attributable to AB Unitholders for the year ended December 31, 2022 decreased $316.8 million from the year ended
December 31, 2021. The decrease primarily was due to (in millions):
Lower base advisory fees
Higher investment losses
Lower performance-based fees
Higher general and administrative expenses
Lower distribution revenues
Lower Bernstein Research Services revenue
Lower promotion and servicing expenses
Higher net loss of consolidated entities attributable to non-controlling interest
Lower employee compensation and benefits
Other
$
(123.6)
(101.8)
(99.9)
(86.0)
(45.0)
(35.7)
60.1
61.5
49.4
4.2
$
(316.8)
Units Outstanding
Each quarter, we consider whether to implement a plan to repurchase AB Holding Units pursuant to Rules 10b5-1 and 10b-18
under the Securities Exchange Act of 1934, as amended (“Exchange Act”). A plan of this type allows a company to repurchase
its shares at times when it otherwise might be prevented from doing so because of self-imposed trading blackout periods or
because it possesses material non-public information. Each broker we select has the authority to repurchase AB Holding Units
on our behalf in accordance with the terms and limitations specified in the plan. Repurchases are subject to regulations
promulgated by the SEC, as well as certain price, market volume and timing constraints specified in the plan. There was no plan
adopted during the fourth quarter of 2023. We may adopt additional plans in the future to engage in open-market purchases of
AB Holding Units to help fund anticipated obligations under our incentive compensation award program and for other
corporate purposes.
Cash Distributions
We are required to distribute all of our Available Cash Flow, as defined in the AB Partnership Agreement, to our Unitholders and
the General Partner. Available Cash Flow typically is the adjusted diluted net income per unit for the quarter multiplied by the
number of general and limited partnership interests at the end of the quarter. In future periods, management anticipates that
Available Cash Flow will continue to be based on adjusted diluted net income per unit, unless management determines, with
concurrence of the Board of Directors, that one or more adjustments that are made for adjusted net income should not be
made with respect to the Available Cash Flow calculation. See Note 2 to our consolidated financial statements contained in Item
8 for a description of Available Cash Flow.
Management Operating Metrics
We are providing the non-GAAP measures “adjusted net revenues,” “adjusted operating income” and “adjusted operating
margin” because they are the principal operating metrics management uses in evaluating and comparing period-to-period
operating performance. Management principally uses these metrics in evaluating performance because they present a clearer
picture of our operating performance and allow management to see long-term trends without the distortion primarily caused by
long-term incentive compensation-related mark-to-market adjustments, acquisition-related expenses,
interest expense and
other adjustment items. Similarly, we believe that these management operating metrics help investors better understand the
underlying trends in our results and, accordingly, provide a valuable perspective for investors.
These non-GAAP measures are provided in addition to, and not as substitutes for, net revenues, operating income and
operating margin, and they may not be comparable to non-GAAP measures presented by other companies. Management uses
both accounting principles generally accepted in the United States of America ("US GAAP") and non-GAAP measures in
evaluating our financial performance. The non-GAAP measures alone may pose limitations because they do not include all of
our revenues and expenses.
44
AllianceBernstein
Net revenues, US GAAP basis
Adjustments:
Distribution-related adjustments:
Distribution revenues
Investment advisory services fees
Pass-through adjustments:
Investment advisory services fees
Other revenues
Impact of consolidated company-sponsored funds
Incentive compensation-related items
Write-down of investment
Adjusted net revenues
Operating income, US GAAP basis
Adjustments:
Real estate
Incentive compensation-related items
EQH award compensation
Write-down of investment
Acquisition-related expenses
Sub-total of non-GAAP adjustments before interest on borrowings
Interest on borrowings1
Subtotal of non-GAAP adjustments
Less: Net income (loss) of consolidated entities attributable to non-
controlling interests
Adjusted operating income1
Less: Interest on borrowings
Adjusted pre-tax income
Less: Adjusted income taxes
Adjusted net income
Diluted net income per AB Unit, GAAP basis
Impact of non-GAAP adjustments
Adjusted diluted net income per AB Unit
Operating margin, GAAP basis
Impact of non-GAAP adjustments
Adjusted operating margin
Part II
Years Ended December 31
2023
2022
2021
(in thousands)
$ 4,155,323
$ 4,054,290
$ 4,441,602
(586,263)
(607,195)
(652,240)
(60,919)
(57,139)
(90,242)
(62,538)
(34,910)
(25,123)
(13,621)
—
(65,116)
(38,959)
57,436
(7,083)
—
(40,628)
(37,209)
(6,933)
(6,694)
1,880
$ 3,371,949
$ 3,336,234
$ 3,609,536
$ 817,670
$ 815,096
$ 1,216,462
(825)
5,192
727
—
98,070
103,164
54,394
157,558
24,009
951,219
54,394
896,825
31,837
(825)
3,461
606
—
72,503
75,745
17,906
93,651
(56,356)
965,103
17,906
947,197
46,034
(3,162)
687
940
1,880
2,614
2,959
5,145
8,104
5,111
1,219,455
5,145
1,214,310
62,658
$ 864,988
$ 901,163
$ 1,151,652
$
$
$
$
$
$
2.65
0.35
3.00
19.1%
9.1
28.2%
3.01
0.25
3.26
21.5%
7.4
28.9%
4.18
0.02
4.20
27.3%
6.5
33.8%
1.
During the second quarter of 2023, we revised adjusted operating income to exclude interest on borrowings in order to align with our
industry peer group. We have recast prior periods presentation to align with the current period presentation.
Adjusted operating income for the year ended December 31, 2023 decreased $13.9 million, or 1.4%, from the year ended
December 31, 2022, primarily due to higher employee compensation and benefits expense of $39.3 million, lower Bernstein
Research Services revenue of $30.1 million, lower investment advisory base fees of $25.1 million and higher general and
administrative expenses of $6.2 million, partially offset by higher net dividend and interest income of $51.6 million and higher
performance-based fees of $35.5 million.
Adjusted operating income for the year ended December 31, 2022 decreased $254.4 million, or 20.9%, from the year ended
December 31, 2021, primarily due to lower performance-based fees of $130.9 million, lower investment advisory base fees of
2023 Annual Report
45
Part II
$99.1 million, lower Bernstein Research Services revenue of $35.7 million and higher general and administrative expenses of
$32.3 million, partially offset by lower employee compensation and benefits expense of $58.4 million.
Adjud sted Net Revenues
Net Revenue, as adjusted, is reduced to exclude all of the company's distribution revenues, which are recorded as a separate
line item on the consolidated statement of income, as well as a portion of investment advisory services fees received that is
used to pay distribution and servicing costs. For certain products, based on the distinct arrangements, certain distribution fees
are collected by us and passed through to third-party client intermediaries, while for certain other products, we collect
investment advisory services fees and a portion is passed through to third-party client intermediaries. In both arrangements, the
third-party client intermediary owns the relationship with the client and is responsible for performing services and distributing
the product to the client on our behalf. We believe offsetting distribution revenues and certain investment advisory services
fees is useful for our investors and other users of our financial statements because such presentation appropriately reflects the
nature of these costs as pass-through payments to third parties that perform functions on behalf of our sponsored mutual
funds and/or shareholders of these funds. Distribution-related adjustments fluctuate each period based on the type of
investment products sold, as well as the average AUM over the period. Also, we adjust distribution revenues for the
amortization of deferred sales commissions as these costs, over time, will offset such revenues.
We adjust investment advisory and services fees and other revenues for pass through costs, primarily related to our transfer
agent and shareholder servicing fees. Also, we adjust for certain performance-based fees passed through to our investment
advisors. These fees do not affect operating income, as such, we exclude these fees from adjusted net revenues.
We adjust for the revenue impact of consolidating company-sponsored investment funds by eliminating the consolidated
company-sponsored investment funds' revenues and including AB's fees from such consolidated company-sponsored
investment funds and AB's investment gains and losses on its investments in such consolidated company-sponsored
investment funds that were eliminated in consolidation.
Adjusted net revenues exclude investment gains and losses and dividends and interest on employee long-term incentive
compensation-related investments. Also, we adjust for certain acquisition-related pass-through performance-based fees and
performance related compensation.
During the fourth quarter of 2021, we wrote down an equity method investment; this write-down brought the investment balance
to zero.
Adjud sted Operating Income
Adjusted operating income represents operating income on a US GAAP basis excluding (1) real estate charges (credits), (2) the
impact on net revenues and compensation expense of the investment gains and losses (as well as the dividends and interest)
associated with employee long-term incentive compensation-related investments, (3) the equity compensation paid by EQH to
certain AB executives, as discussed below,w (4) the write-down of investments (discussed immediatelyl above), (5) acquisition-
related expenses, (6) interest on borrowings and (7) the impact of consolidated company-sponsored investment funds.
Real estate charges (credits) incurred during the fourth quarter of 2019 through the fourth quarter of 2020, while excluded in the
period in which the charges (credits) were recorded, are included ratably over the remaining applicable lease term.
Prior to 2009, a significant portion of employee compensation was in the form of long-term incentive compensation awards
that were notionally invested in AB investment services and generally vested over a period of four years. AB economically
hedged the exposure to market movements by purchasing and holding these investments on its balance sheet. All such
investments had vested as of year-end 2012 and the investments have been delivered to the participants, except for those
investments with respect to which the participant elected a long-term deferral. Fluctuation in the value of these investments,
which also impacts compensation expense,
is recorded within investment gains and losses on the income statement.
Management believes it is useful to reflect the offset achieved from economically hedging the market exposure of these
investments in the calculation of adjusted operating income and adjusted operating margin. The non-GAAP measures exclude
gains and losses and dividends and interest on employee long-term incentive compensation-related investments included in
revenues and compensation expense.
The board of directors of EQH granted to Seth Bernstein, our CEO, equity awards in connection with EQH's IPO. Additionally,
equity awards were granted to Mr. Bernstein and other AB executives for their membership on the EQH Management
Committee. These individuals may receive additional equity or cash compensation from EQH in the future related to their
service on the Management Committee. Any awards granted to these individuals by EQH are recorded as compensation
expense in AB’s consolidated statement of income. The compensation expense associated with these awards has been
excluded from our non-GAAP measures because they are non-cash and are based upon EQH's, and not AB's,
financial performance.
46
AllianceBernstein
Part II
The write-down of investments discussed above in Adjud sted Net Revenues have been excluded due to their non-recurring nature
and because they are not part of our core operating results.
Acquisition-related expenses have been excluded because they are not considered part of our core operating results when
comparing financial results from period to period and to industry peers. Acquisition-related expenses include professional fees
and the recording of changes in estimates to contingent payment arrangements associated with our acquisitions. Beginning in
the first quarter of 2022, acquisition-related expenses also include certain compensation-related expenses, amortization of
intangible assets for contracts acquired and accretion expense with respect to contingent payment arrangements. During 2023,
2022 and 2021, acquisition related expenses included an intangible asset impairment charge of zero, $5.6 million and $1.0
million, respectively, related to various historical acquisitions.
The recording of changes in estimates of contingent consideration payable with respect to contingent payment arrangements
associated with our acquisitions are not considered part of our core operating results and, accordingly, have been excluded.
During 2023, we recorded an expense of $28.4 million due to a change in estimate related to the contingent consideration
associated with the acquisition of Autonomous LLC in 2019. The change in estimate was based upon better than expected
revenues during the 2023 performance evaluation period. We recorded $14.1 million as contingent payment arrangement
expense and $14.3 million as compensation and benefits expense in the condensed consolidated statement of income. The
charges to compensation and benefits expense are due to certain service conditions and special awards included in the
acquisition agreement.
We adjust operating income to exclude interest on borrowings in order to align with our industry peer group.
We adjusted for the operating income impact of consolidating certain company-sponsored investment funds by eliminating the
consolidated company-sponsored funds' revenues and expenses and including AB's revenues and expenses that were
eliminated in consolidation. We also excluded the limited partner interests we do not own.
Adjud sted Net Income and Adjud sted Diluted Net Income per AB Unit
As previously discussed, our quarterly distribution is typically our adjusted diluted net income per unit (which is derived from
adjusted net income) for the quarter multiplied by the number of general and limited partnership interests at the end of the
quarter. Adjusted income taxes, used in calculating adjusted net income, are calculated using the GAAP effective tax rate
adjusted for non-GAAP income tax adjustments.
Adjud sted Operating Margin
Adjusted operating margin allows us to monitor our financial performance and efficiency from period to period without the
volatility noted above in our discussion of adjud sted operating income and to compare our performance to industry peers on a
basis that better reflects our performance in our core business. Adjusted operating margin is derived by dividing adjusted
operating income by adjusted net revenues.
2023 Annual Report
47
Part II
Net Revenues
The components of net revenues are as follows:
Years Ended December 31
% Change
2023
2022
2021
2023-22
2022-21
(in thousands)
Investment advisory and services fees:
Institutions:
Base fees
Performance-based fees
Retail:
Base fees
$
612,341
$
581,987
$
540,478
53,702
666,043
77,299
659,286
45,580
586,058
1,275,914
1,321,645
1,442,178
Performance-based fees
197
1,564
50,669
Private Wealth Management:
Base fees
Performance-based fees
Total:
Base fees
1,276,111
1,323,209
1,492,847
942,302
91,012
922,159
66,384
966,749
148,870
1,033,314
988,543
1,115,619
2,830,557
2,825,791
2,949,405
Performance-based fees
144,911
145,247
245,119
Bernstein Research Services
Distribution revenues
Dividend and interest income
Investment gains (losses)
Other revenues
Total revenues
2,975,468
2,971,038
3,194,524
386,142
586,263
199,443
14,206
101,342
416,273
607,195
123,091
(102,413)
105,544
452,017
652,240
38,734
(636)
108,409
4,262,864
4,120,728
4,445,288
Less: broker-dealer related interest expense
107,541
66,438
3,686
Net revenues
$ 4,155,323
$ 4,054,290
$ 4,441,602
5.2 %
(30.5)
1.0
(3.5)
(87.4)
(3.6)
2.2
37.1
4.5
0.2
(0.2)
0.1
(7.2)
(3.4)
62.0
n/m
(4.0)
3.4
61.9
2.5 %
7.7%
69.6
12.5
(8.4)
(96.9)
(11.4)
(4.6)
(55.4)
(11.4)
(4.2)
(40.7)
(7.0)
(7.9)
(6.9)
n/m
n/m
(2.6)
(7.3)
n/m
(8.7)%
Investment Advisory and Services Fees
Investment advisory and services fees are the largest component of our revenues. These fees generally are calculated as a
percentage of the value of AUM as of a specified date, or as a percentage of the value of average AUM for the applicable billing
period, and vary with the type of investment service, the size of account and the total amount of assets we manage for a
particular client. Accordingly, fee income generally increases or decreases as AUM increase or decrease and is affected by
market appreciation or depreciation, the addition of new client accounts or client contributions of additional assets to existing
accounts, withdrawals of assets from and termination of client accounts, purchases and redemptions of mutual fund shares,
shifts of assets between accounts or products with different fee structures, and acquisitions. Our average basis points realized
(investment advisory and services fees divided by average AUM) generally approximate 30 to 105 basis points for actively
managed equity services, 10 to 65 basis points for actively-managed fixed income services and 1 to 50 basis points for
passively managed services. Average basis points realized for other services could range from 3 basis points for certain
Institutional third party managed services to over 190 basis points for certain Retail and Private Wealth Management alternative
services. These ranges include all-inclusive fee arrangements (covering investment management, trade execution and other
services) for our Private Wealth Management clients.
We calculate AUM using established market-based valuation methods and fair valuation (non-observable market) methods.
Market-based valuation methods include: last sale/settle prices from an exchange for actively-traded listed equities, options
and futures; evaluated bid prices from recognized pricing vendors for fixed income, asset-backed or mortgage-backed issues;
mid prices from recognized pricing vendors and brokers for credit default swaps; and quoted bids or spreads from pricing
48
AllianceBernstein
Part II
vendors and brokers for other derivative products. Fair valuation methods include: discounted cash flow models or any other
methodology that is validated and approved by our Valuation Committee and sub-committee (the "Valuation Committee") (see
paragraph immediatelyl below for more information regarding our Valuation Committee). Fair valuation methods are used only
where AUM cannot be valued using market-based valuation methods, such as in the case of private equity or illiquid securities.
The Valuation Committee, consists of senior officers and employees, which oversees a consistent framework of pricing and
valuation of all investments held in client and AB portfolios. The Valuation Committee has adopted a Statement of Pricing
Policies describing principles and policies that apply to pricing and valuing investments held in these portfolios. We also have a
Pricing Group, which is overseen by the Valuation Committee and is responsible for managing the pricing process for
all investments.
We sometimes charge our clients performance-based fees. In these situations, we charge a base advisory fee and are eligible
to earn an additional performance-based fee or incentive allocation that is calculated as either a percentage of absolute
investment results or a percentage of investment results in excess of a stated benchmark over a specified period of time. Some
performance-based fees include a high-watermark provision, which generally provides that if a client account underperforms
relative to its performance target (whether absolute or relative to a specified benchmark),
it must gain back such
underperformance before we can collect future performance-based fees. Therefore, if we fail to achieve our performance target
for a particular period, we will not earn a performance-based fee for that period and, for accounts with a high-watermark
provision, our ability to earn future performance-based fees will be impaired. We are eligible to earn performance-based fees on
9.3%, 8.3% and 0.4% of the assets we manage for institutional clients, private wealth clients and retail clients, respectively (in
total, 5.6% of our AUM).
Our investment advisory and services fees increased by $4.4 million, or 0.1%, in 2023, due to a $4.8 million, or 0.2%, increase in
base fees, offset by a $0.3 million decrease in performance-based fees. The increase in base fees is primarily due to slight shift
in product mix to alternatives, which generally earn higher fees, partially offset by a 0.9% decrease in average AUM. Our
investment advisory and services fees decreased by $223.5 million, or 7.0%, in 2022, due to a $123.6 million, or 4.2%, decrease
in base fees and a $99.9 million decrease in performance-based fees. The decrease in base fees was primarily due to a 6.1%
decrease in average AUM, partially offset by a slight increase in our portfolio fee rate.
Performance-based fees decreased $0.3 million, or 0.2%, in 2023, primarily due to lower performance-based fees earned on
U.S. Real Estate fund and Emerging Markets Opportunistic Credit fund, partially offset by higher performance-based fees
earned on Private Credit fund, Global Opportunistic Credit fund, Global Multi-Strategy fund and Securitized Assets fund.
Performance-based fees decreased $99.9 million, or 40.7%, in 2022, primarily due to lower performance-based fees earned on
Financial Services Opportunities fund, U.S. Select Equity fund, Arya Partners fund and Private Credit Services fund, partially
offset by higher U.S. Real Estate fund fees.
Institutional base fees increased $30.4 million, or 5.2%, in 2023, primarily due to a higher portfolio fee rate, partially offset by a
1.2% decrease in average AUM. Retail base fees decreased $45.7 million, or 3.5%, in 2023, primarily due to a 2.1% decrease in
average AUM. Private Wealth base fees increased $20.1 million, or 2.2%, in 2023, primarily due to a 3.0% increase in average
AUM. Institutional base fees increased $41.5 million, or 7.7%, in 2022, primarily due to a higher portfolio fee rate, partially offset
by a 5.3% decrease in average AUM. Retail base fees decreased $120.5 million, or 8.4%, in 2022, primarily due to an 8.0%
decrease in average AUM. Private Wealth base fees decreased $44.6 million, or 4.6%, in 2022, primarily due to a 3.3% decrease
in average AUM.
Bernstein Research Services
We earn revenues for providing investment research to, and executing brokerage transactions for, institutional clients. These
clients compensate us principally by directing us to execute brokerage transactions on their behalf, for which we earn
commissions, and to a lesser extent, but increasingly, by paying us directly for research through commission sharing
agreements or cash payments. In the fourth quarter of 2022, AB and SocGen, a leading European bank, announced plans to
form a joint venture combining their respective cash equities and research businesses. As a result, the BRS business has been
classified as held for sale. For further discussion, see Note 24 Acquisitions and Divestitures to our consolidated financial
statements in Item 8.
Revenues from Bernstein Research Services decreased $30.1 million, or 7.2%, in 2023. The decrease was primarily driven by
significantly lower global customer trading activity due to the prevailing macro-economic environment.
Revenues from Bernstein Research Services decreased $35.7 million, or 7.9%, in 2022. The decrease was driven by significantly
lower customer trading activity in Europe and Asia due to local market conditions.
Distribution Revenues
Two of our subsidiaries act as distributors and/or placement agents of company-sponsored mutual funds and receive
distribution services fees from certain of those funds as full or partial reimbursement of the distribution expenses they incur.
Period-over-period fluctuations of distribution revenues typically are in line with fluctuations of the corresponding average AUM
of these mutual funds.
2023 Annual Report
49
Part II
Distribution revenues decreased $20.9 million, or 3.4%, in 2023, primarily due to a shift in product mix from mutual funds with
higher distribution rates to mutual funds with lower distribution rates, as well as a 1.4% decrease in the corresponding average
AUM of these mutual funds. Distribution revenues decreased $45.0 million, or 6.9%, in 2022, primarily due to the corresponding
average AUM of these mutual funds decreasing 12.4%, partially offset by a shift in product mix from mutual funds with lower
distribution rates to mutual funds with higher distribution rates.
Dividend and Interest Income and Interest Expense
Dividend and interest income consists primarily of investment income and interest earned on customer margin balances and
U.S. Treasury Bills as well as dividend and interest income in our consolidated company-sponsored investment funds. Interest
expense principally reflects interest accrued on cash balances in customers’ brokerage accounts.
Dividend and interest income increased $76.4 million, or 62.0%, in 2023, primarily due to higher interest earned on customer
margin balances and higher interest earned on U.S. Treasury Bills. Interest expense increased $41.1 million in 2023, due to
higher interest paid on cash balances in customers' brokerage accounts.
Dividend and interest income increased $84.4 million in 2022, primarily due to higher interest earned on customer margin
balances, higher interest earned on U.S. Treasury Bills as well as higher dividend and interest income in our consolidated
company-sponsored investment funds. Interest expense increased $62.8 million, in 2022, due to higher interest paid on cash
balances in customers' brokerage accounts.
50
AllianceBernstein
Part II
Investment Gains (Losses)
Investment gains (losses) consist primarily of realized and unrealized investment gains or losses on: (i) employee long-term
incentive compensation-related investments, (ii) U.S. Treasury Bills, (iii) market-making in exchange-traded options and equities,
(iv) seed capital investments, (v) derivatives and (vi) investments in our consolidated company-sponsored investment funds.
Investment gains (losses) also include equity in earnings of proprietary investments in limited partnership hedge funds that we
sponsor and manage.
Investment gains (losses) are as follows:
Long-term incentive compensation-related investments:
Realized gains
Unrealized (losses) gains
Investments held by consolidated company-sponsored investment funds:
Realized (losses)
Unrealized gains (losses)
Seed capital investments:
Realized (losses) gains
Seed capital and other
Derivatives
Unrealized gains (losses)
Seed capital and other
Derivatives
Brokerage-related investments:
Realized (losses)
Unrealized (losses) gains
Other Revenues
Years Ended December 31
2023
2022
2021
(in thousands)
$
6,573
$
1,345
$
(1,707)
(10,626)
2,213
2,446
(32,125)
48,350
(46,293)
(73,194)
(2,341)
(1,882)
(34)
(7,588)
17,272
41,236
20,263
(22,313)
10,099
(8,717)
(31,261)
(177)
(6,907)
8,992
(203)
(442)
(1,384)
669
$
14,206
$ (102,413)
$
(829)
(278)
(636)
Other revenues consist of fees earned for transfer agency services provided to company-sponsored mutual funds, fees earned
for administration and recordkeeping services provided to company-sponsored mutual funds and the General Accounts of EQH
and its subsidiaries, and other miscellaneous revenues. Other revenues decreased $4.2 million, or 4.0%, in 2023, primarily due
to lower shareholder servicing fees and lower brokerage income, partially offset by higher mutual fund reimbursements. Other
revenues decreased $2.9 million, or 2.6%, in 2022, primarily due to lower shareholder servicing fees.
2023 Annual Report
51
Part II
Expenses
The components of expenses are as follows:
Years Ended December 31
% Change
2023
2022
2021
2023-22
2022-21
(in thousands)
Employee compensation and benefits
1,769,153
$ 1,666,636
$ 1,716,013
6.2 %
(2.9%)
Promotion and servicing:
Distribution-related payments
Amortization of deferred sales commissions
Trade execution, marketing, T&E and other
General and administrative
Contingent payment arrangements
Interest on borrowings
Amortization of intangible assets
610,368
36,817
215,643
862,828
581,571
22,853
54,394
46,854
629,572
34,762
215,556
879,890
641,635
6,563
17,906
26,564
708,117
34,364
197,486
939,967
555,608
2,710
5,145
5,697
Total
$ 3,337,653
$ 3,239,194
$ 3,225,140
(3.1)
5.9
—
(1.9)
(9.4)
n/m
n/m
76.4
3.0 %
(11.1)
1.2
9.2
(6.4)
15.5
142.2
n/m
n/m
0.4 %
Employee Compensation and Benefits
Employee compensation and benefits consist of base compensation (including salaries and severance), annual short-term
incentive compensation awards (cash bonuses), annual
long-term incentive compensation awards, commissions, fringe
benefits and other employment costs (including recruitment, training, temporary help and meals).
Compensation expense as a percentage of net revenues was 42.6%, 41.1% and 38.6% for the years ended December 31, 2023,
2022 and 2021, respectively. Compensation expense generally is determined on a discretionary basis and is primarily a function
of our firm’s current-year financial performance. The amounts of incentive compensation we award are designed to motivate,
reward and retain top talent while aligning our executives' interests with the interests of our Unitholders. Senior management,
together with the Compensation and Workplace Practices Committee of the Board of Directors of AllianceBernstein
Corporation (“Compensation Committee”), continue to believe that the appropriate metric to consider in determining the
amount of incentive compensation is the ratio of adjusted employee compensation and benefits expense to adjusted net
revenues. Adjusted net revenues used in the adjusted compensation ratio are the same as the adjusted net revenues presented
as a non-GAAP measure (discussed earlier in this Item 7).7 Adjusted employee compensation and benefits expense is total
employee compensation and benefits expense minus other employment costs such as recruitment, training, temporary help
and meals (which were 1.1%, 1.1% and 0.9% of adjusted net revenues for 2023, 2022 and 2021, respectively), and excludes the
impact of mark-to-market vesting expense, as well as dividends and interest expense, associated with employee long-term
incentive compensation-related investments and the amortization expense associated with the awards issued by EQH to some
of our firm's executives relating to their roles as members of the EQH Management Committee. Senior management, with the
approval of the Compensation Committee, has established as an objective that adjusted employee compensation and benefits
expense, excluding the impact of performance-based fees, generally should not exceed 50% of our adjusted net revenues in any
year, except in unexpected or unusual circumstances. Our ratios of adjusted compensation expense as a percentage of
adjusted net revenues were 49.0%, 48.4% and 46.5%, respectively, for the years ended December 31, 2023, 2022 and 2021.
In 2023, employee compensation and benefits expense increased $102.5 million, or 6.2%, primarily due to higher base
compensation of $72.2 million, higher incentive compensation of $51.7 million and higher fringes of $7.8 million, partially offset
by lower commissions of $29.0 million. In 2022, employee compensation and benefits expense decreased $49.4 million, or
2.9%, primarily due to lower incentive compensation of $107.7 million, partially offset by higher base compensation of $39.8
million, higher commissions of $12.7 million and higher other employment costs of $5.3 million.
Promotion and Servicing
Promotion and servicing expenses include distribution-related payments to financial
intermediaries for distribution of AB
mutual funds and amortization of deferred sales commissions paid to financial intermediaries for the sale of back-end load
shares of AB mutual funds. Also included in this expense category are costs related to trade execution and clearance, travel
and entertainment, advertising and promotional materials.
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AllianceBernstein
Part II
Promotion and servicing expenses decreased $17.1 million, or 1.9%, in 2023. The decrease was due to lower distribution-
related payments of $19.2 million, lower trade execution and clearance expenses of $9.0 million and lower transfer fees of $3.0
million, offset by higher travel and entertainment expenses of $8.5 million, higher marketing and communication expenses of
$3.5 million and higher amortization of deferred sales commissions of $2.1 million. Promotion and servicing expenses
decreased $60.1 million, or 6.4%, in 2022. The decrease was primarily due to lower distribution-related payments of $78.5
million, lower transfer fees of $4.9 million and lower trade execution and clearance expenses of $3.1 million, partially offset by
higher travel and entertainment expenses of $15.4 million and higher firm meeting expenses of $8.8 million.
General and Administrative
General and administrative expenses include portfolio services fees, technology fees, professional fees and office-related
expenses (occupancy, communications and similar expenses). General and administrative expenses as a percentage of net
revenues were 14.0%, 15.8% and 12.5% for the years ended December 31, 2023, 2022 and 2021, respectively. General and
administrative expenses decreased $60.1 million, or 9.4%, in 2023. The decrease was primarily due to lower portfolio services
fees of $43.7 million, lower professional fees of $18.0 million, lower valuation adjustments related to the classification of
Bernstein Research Services as held for sale of $6.0 million and a favorable foreign exchange translation impact of $5.7 million,
partially offset by higher office-related expenses of $7.4 million. General and administrative expenses increased $86.0 million,
or 15.5%, in 2022. The increase was primarily due to higher professional fees of $27.3 million, higher portfolio services fees of
$21.3 million, higher technology fees of $19.1 million, a valuation adjustment of $7.4 million associated with the classification
of BRS as held for sale, higher office-related expenses of $6.9 million and a $5.6 million impairment of certain acquisition
related intangible assets.
Contingent Payment Arrangements
Contingent payment arrangements reflect changes in estimates of contingent payment liabilities associated with acquisitions
in current and previous periods, as well as accretion expense of these liabilities. For the years ended December 31, 2023, 2022
and 2021, we recognized $8.8 million, $6.6 million and $3.3 million, respectively, in accretion expense related to our contingent
considerations payable. During 2023, we recorded a change in estimate related to the contingent consideration liability
associated with the acquisition of Autonomous LLC in 2019 of $14.1 million. The change in estimate was based upon better
than expected revenues during the 2023 performance evaluation period. There were no changes in our estimates during the
year ended December 31, 2022. During 2021, we recorded a change in estimate related to the contingent consideration liability
associated with the acquisition of Ramius Alternative Solutions LLC of $0.6 million. Due to the loss of acquired investment
management contracts, the carrying value of the finite-lived intangible assets exceeded the fair value of the contracts. These
expenses resulting from changes to expected payments and the accretion of these obligations to their expected payment
amounts are reflected within contingent payment arrangements in our consolidated statements of income.
Interest on Borrowings
Interest expense increased $36.5 million in 2023, reflecting higher interest rates on borrowings and higher weighted average
borrowings. Average daily borrowings for the EQH facilities and commercial paper were $1,014 million at a weighted average
interest rate of 5.1% during 2023 compared to $845.5 million and 1.7% during 2022.
Interest expense increased $12.8 million in 2022, reflecting higher interest rates on borrowings and higher weighted average
borrowings. Average daily borrowings for the EQH facilities and commercial paper were $845.5 million at a weighted average
interest rate of 1.7% during 2022 compared to $561.6 million and 0.2% during 2021.
Amortization of Intangible Assets
Amortization of intangible assets reflects our amortization of costs assigned to acquired investment management contracts
with a finite life. These assets are recognized at fair value and generally are amortized on a straight-line basis over their
estimated useful life. On July 1, 2022, AB acquired CarVal Investors L.P. ("CarVal"), which resulted in recording of $303.0 million
of finite-lived intangible assets primarily relating to investment management contracts and investor relationships with useful
lives ranging from 5 to 10 years (see Note 24 Acquisitions and Divestitures to our consolidated financial statements in Item 8).
Amortization of intangible assets increased $20.3 million in 2023. The increase was primarily due to the acquired intangible
assets associated with the CarVal acquisition. Amortization of intangible assets increased $20.9 million in 2022. The increase
was primarily due to the acquired intangible assets associated with the CarVal acquisition.
Income Taxes
AB, a private limited partnership, is not subject to federal or state corporate income taxes. However, AB is subject to a 4.0%
New York City unincorporated business tax (“UBT”). Our domestic corporate subsidiaries are subject to federal, state and local
income taxes, and generally are included in the filing of a consolidated federal income tax return. Separate state and local
2023 Annual Report
53
Part II
income tax returns also are filed. Foreign corporate subsidiaries generally are subject to taxes in the jurisdictions where they
are located.
Income tax expense decreased $10.6 million, or 26.7%, in 2023 compared to 2022. This decrease is primarily driven by a one
time tax benefit of $22.4 million resulting from the release of a valuation allowance on a capital loss tax asset due to a tax
planning action identified in the fourth quarter of 2023, due to a future restructuring of certain foreign subsidiaries that would
not have a material impact on AB operations. This resulted in a lower effective tax rate in 2023 of 3.6% compared to 4.9% in
2022.
Income tax expense decreased $23.1 million, or 36.8%, in 2022 compared to 2021. This decrease is due to lower pre-tax book
income and one-time discrete items which resulted in a lower effective tax rate in 2022 of 4.9% compared to 5.2% in 2021.
Net Income (Loss) of Consolidated Entities Attributable to Non-Controlling Interests
Net income (loss) of consolidated entities attributable to non-controlling interests primarily consists of limited partner interests
owned by other investors in our consolidated company-sponsored investment funds. In 2023, we had $24.0 million of net
income of consolidated entities attributable to non-controlling interests, primarily due to gains on investments held by our
consolidated company-sponsored investment funds. In 2022, we had $56.4 million of net loss of consolidated entities
attributable to non-controlling interests, primarily due to losses on investments held by our consolidated company-sponsored
investment funds. In 2021 we had $5.1 million of net income of consolidated entities attributable to non-controlling interests,
primarily due to gains on investments held by our consolidated company-sponsored investment funds.
Capital Resources and Liquidity
Cash flows from operating activities primarily include the receipt of investment advisory and services fees and other revenues
offset by the payment of operating expenses incurred in the normal course of business. Our cash flows from operating
activities have historically been positive and sufficient to support our operations. We do not anticipate this to change in the
foreseeable future. Cash flows from investing activities generally consist of small capital expenditures and, when applicable,
business acquisitions. Cash flows from financing activities primarily consist of issuance and repayment of debt and the
repurchase of AB Holding units to fund our long-term deferred compensation plans. We are required to distribute all of our
Available Cash Flow to our Unitholders and the General Partner.
During 2023, net cash provided by operating activities was $0.9 billion, compared to $1.1 billion during 2022. The change
lower earnings of $159.9 million (after non-cash
primarily was due to an increase in fees receivable of $161.1 million,
reconciling items), a decrease in broker-dealer related payables (net of receivable and segregated U.S. Treasury Bills activity) of
$133.3 million and an increase in deferred sales commissions of $59.8 million, partially offset by net activity of our
consolidated company-sponsored investment funds of $166.0 million and an increase in accrued compensation of $127.4
million. During 2022, net cash provided by operating activities was $1.1 billion, compared to $1.3 billion during 2021. The
change primarily was due to lower earnings of $265.1 million (after non-cash reconciling items), a decrease in accrued
compensation of $200.8 million and a decrease in broker-dealer related payables (net of receivable and segregated U.S.
Treasury Bills activity) of $169.2 million, partially offset by net activity of our consolidated company-sponsored investment
funds of $252.0 million and an increase in fees receivable of $193.3 million.
During 2023, net cash used in investing activities was $33.6 million, compared to $22.0 million during 2022. The change is due
to the acquisition of CarVal, net cash acquired of $40.3 million in 2022, partially offset by lower purchases of furniture,
equipment and leasehold improvements of $28.7 million. During 2022, net cash used in investing activities was $22.0 million,
compared to $65.7 million during 2021. The change is primarily due to the acquisition of CarVal, net cash acquired of $40.3
million in 2022.
During 2023, net cash used in financing activities was $1.0 billion, compared to $1.1 billion during 2022. The change reflects
lower cash distributions to Unitholders of $230.6 million, a decrease in the net purchases of AB Holding Units to fund long-term
incentive compensation plans of $66.5 million and the repayment of CarVal debt of $42.7 million, partially offset by higher net
purchases of non-controlling interests of consolidated company-sponsored investment funds of $187.1 million and lower net
borrowings of debt of $70.7 million. During 2022, net cash used in financing activities was $1.1 billion, compared to $0.9 billion
during 2021. The change reflects lower net purchases of non-controlling interests of consolidated company-sponsored
investment funds in 2022 of $309.9 million, repayment of CarVal debt of $42.7 million and a decrease in overdrafts payable of
$41.6 million, partially offset by higher net borrowings of debt of $155.0 million and a decrease in the net purchases of AB
Holding Units to fund long-term incentive compensation plans of $51.3 million.
As of December 31, 2023, AB had $1.0 billion of cash and cash equivalents (excluding cash and cash equivalents of
consolidated company-sponsored investment funds and cash held-for-sale), all of which is available for liquidity but consist
primarily of cash on deposit for our broker-dealers related to various customer clearing activities and cash held by foreign
subsidiaries of $585.8 million.
54
AllianceBernstein
Part II
See Note 12 to our consolidated financial statements in Item 8 for disclosures relating to our debt and credit facilities. We use
our debt and credit facilities to seed certain new investment products which may expose us to market risk, credit risk and
material gains and losses. To reduce our exposure, we enter into various futures, forwards, options and swaps primarily to
economically hedge certain of our seed money investments. While in most cases broad market risks are hedged and are
effective in reducing our exposure, our hedgers are imperfect and we may remain exposed to some market risk and credit-
related losses in the event of non-performance by counterparties on these derivative instruments.
Our financial condition and access to public and private debt markets should provide adequate liquidity for our general
business needs. Management believes that cash flow from operations and the issuance of debt and AB Units or AB Holding
Units will provide us with the resources we need to meet our financial obligations. See “Risk Factors” in Item 1A and “Cautions
Regarding Forward-Looking Statements” in this Item 7 for a discussion of credit markets and our ability to renew our credit
facilities at expiration.
Off-Balance Sheet Arrangements and Aggregate Contractual Obligations
Guarantees
Under various circumstances, AB guarantees the obligations of its consolidated subsidiaries.
AB maintains a guarantee in connection with an $800 million committed, unsecured senior revolving credit facility (the "Credit
Facility"). If SCB LLC is unable to meet its obligations, AB will pay the obligations when due or on demand. SCB LLC currently
has five uncommitted lines of credit with five financial institutions. Four of these lines of credit permit us to borrow up to an
aggregate of approximately $315.0 million, with AB named as an additional borrower, while the other line has no stated limit. AB
has guaranteed the obligations of SCB LLC under these lines of credit. AB maintains guarantees totaling $415.0 million for SCB
LLC’s five uncommitted lines of credit.
AB maintains a guarantee with a commercial bank, under which we guarantee the obligations in the ordinary course of business
of each of SCB LLC, our U.K.-based broker-dealer and our Cayman subsidiary. We also maintain three additional guarantees
with other commercial banks under which we guarantee approximately $270.9 million of obligations for our U.K.-based broker-
dealer and $99.0 million of obligations for our India-based broker-dealer. In the event that any of these three entities is unable to
meet its obligations, AB will pay the obligations when due or on demand.
We also have two smaller guarantees with a commercial bank totaling approximately $1.9 million, under which we guarantee
certain obligations in the ordinary course of business of one of our foreign subsidiaries.
We have not been required to perform under any of the above agreements and currently have no liability in connection with
these agreements.
Aggregate Contractual Obligations
We have various compensation and benefit obligations, including accrued salaries and fringes, commissions, payroll taxes,
incentive payments and deferred compensation arrangements. The majority of our compensation and benefits obligations are
paid out in less than one year, while the deferred compensation obligations are payable over various periods, with the majority
payable over periods of up to three years. Accrued compensation and benefits as of December 31, 2023 totaled $354.5 million.
This amount excludes our accrued pension obligation. Offsetting our accrued compensation obligations are long-term incentive
compensation-related investments and money market investments we funded totaling $41.1 million, which are included in our
consolidated statement of financial condition. Any amounts reflected on the consolidated statement of financial condition as
payables (to broker-dealers, brokerage clients and company-sponsored mutual funds) and accounts payable and accrued
expenses are excluded from the aforementioned accrued compensation and benefits obligation amount.
We expect to make contributions to our qualified profit sharing plan of approximately $19.0 million in each of the next four
years. We do not currently anticipate that we will contribute to the Retirement Plan during 2024.
The 2017 Tax Act (enacted in the U.S. on December 22, 2017) imposed a federal transition tax on mandatory deemed
repatriation of certain deferred foreign earnings. Management elected to pay the transition tax in installments over an eight-
year period from 2018 to 2025. The federal transition tax obligation as of December 31, 2023 totaled $8.7 million and is
recorded to income tax payable on our consolidated statement of financial condition. See Note 21 to our consolidated financial
statements in Item 8 for further discussion of our taxes.
See Note 13 to our consolidated financial statements in Item 8 for discussion of our leases.
See Note 12 to our consolidated financial statements in Item 8 for a discussion of our debt.
2023 Annual Report
55
Part II
Contingencies
See Note 14 to our consolidated financial statements in Item 8 for a discussion of our commitments and contingencies.
Critical Accounting Estimates
The preparation of the consolidated financial statements and notes to consolidated financial statements requires management
to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses.
Management believes that the critical accounting policies and estimates discussed below involve significant management
judgment due to the sensitivity of the methods and assumptions used.
Goodwill
Our acquisitions are accounted for under the acquisition method of accounting, where the cost of the acquisition is allocated
on the basis of the estimated fair value of the assets acquired and the liabilities assumed. The excess of the purchase price
over the fair value of identifiable assets acquired, net of liabilities assumed, results in the recognition of goodwill.
As of December 31, 2023, we had goodwill of $3.6 billion on the consolidated statement of financial condition, which included
$666.1 million as a result of the CarVal Investors L.P. ("CarVal") acquisition in the third quarter of 2022, $2.8 billion as a result
of the Sanford C. Bernstein Inc. (“Bernstein”) acquisition in 2000 and $291.9 million in regard to various smaller acquisitions.
Approximately $159.8 million of goodwill has been classified as assets held for sale on the consolidated statement of financial
condition. For further discussion, see Note 24 Acquisitions and Divestitures in Item 8 to these consolidated financial statements.
We have determined that AB has only one reporting segment and reporting unit. We test our goodwill annually, as of September
30, for impairment or if certain events or changes in circumstances occur and trigger an interim impairment test. The carrying
value of goodwill is also reviewed if facts and circumstances occur that suggest possible impairment, such as, but not limited
to significant transactions including acquisitions or divestitures and significant declines in AUM, revenues, earnings or the price
of an AB Holding Unit. Any of these changes in circumstances could suggest the possibility that goodwill is impaired, but none
of these events or circumstances by itself would indicate that it is more likely than not that goodwill is impaired. Instead, they
are merely recognized as triggering events for the consideration of impairment and must be viewed in combination with any
mitigating or positive factors. A holistic evaluation of all events since the most recent quantitative impairment test must be
done to determine whether it is more likely than not that the reporting unit is impaired.
For our annual impairment test, we utilize the market approach where the fair value of the reporting unit is based on its
unadjusted market valuation (AB Units outstanding multiplied by AB Holding's Unit price) and earnings multiples. A goodwill
impairment would be the amount by which a reporting unit's carrying value exceeds its fair value, not to exceed the carrying
amount of goodwill. The goodwill impairment test does not include a determination by management of whether a decline in fair
value is temporary and it is important that management's determination of fair value reflect the impact of changing market
conditions, including the severity and anticipated duration of any such changes. The price of a publicly traded AB Holding Unit
serves as a reasonable starting point for valuing an AB Unit because each represents the same fractional interest in our
underlying business. Our market approach analysis also includes comparable industry earnings multiples applied to our
earnings forecast and assumes a control premium (when applicable).
Contingent Payment Arrangements
We periodically enter into contingent payment arrangements in connection with our business combinations.
In these
arrangements, we agree to pay additional consideration to the sellers to the extent that certain performance targets are
achieved. We estimate the fair value of these potential future obligations at the time a business combination is consummated
and record a liability on a discounted basis on our consolidated statement of financial condition. We then accrete the obligation
to its expected payment amount over the measurement period. If our expected payment amount subsequently changes, the
obligation is modified in the current period resulting in a gain or loss. Both gains and losses resulting from changes to expected
payments and the accretion of these obligations to their expected payment amounts are reflected within contingent payment
arrangements in our consolidated statements of income.
For contingent liabilities, we typically use a valuation method that is a form of the income approach, whereby a forecast of
future cash flows attributable to the asset are discounted to present value using a risk-adjusted discount rate. We develop a
forecast of future cash flows attributable to the performance objectives that are then discounted to present value using a risk-
adjusted discount rate. Some of the more significant estimates and assumptions inherent in the income approach include the
amount and timing of projected future cash flows, the discount rate selected to measure the risks inherent in the future cash
flows.
56
AllianceBernstein
Part II
Loss Contingencies
Management continuously reviews with legal counsel the status of regulatory matters and pending or threatened litigation. We
evaluate the likelihood that a loss contingency exists and record a loss contingency if it is both probable and reasonably
estimable as of the date of the financial statements. See Note 14 to our consolidated financial statements in Item 8.
Accounting Pronouncements
See Note 2 to our consolidated financial statements in Item 8.
Cautions Regarding Forward-Looking Statements
Certain statements provided by management in this report 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, integration of acquired companies, competitive conditions and government regulations,
including changes in tax regulations and rates and the manner in which the earnings of publicly-traded partnerships are taxed.
We caution readers to carefully consider such factors. Further, these forward-looking statements speak only as of the date on
which such statements are made; we undertake 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” in Item 1A. Any or all of the forward-looking statements that
we make in this Form 10-K, other documents we file with or furnish to the SEC, and any other public statements we issue, may
turn out to be wrong. It is important to remember that other factors besides those listed in “Risk Factors” and those listed below
could also adversely impact our revenues, financial condition, results of operations and business prospects.
The forward-looking statements referred to in the preceding paragraph, most of which directly affect AB but also affect AB
Holding because AB Holding’s principal source of income and cash flow is attributable to its investment in AB,
include
statements regarding:
• Our belief that the cash flow AB Holdindd g realizll es from itstt
s it
needsdd to meet itstt
finaii ncial obligatiott ns: AB Holding’s cash flow is dependent on the quarterly cash distributions it receives
from AB. Accordingly, AB Holding’s ability to meet its financial obligations is dependent on AB’s cash flow from its
operations, which is subject to the performance of the capital markets and other factors beyond our control.
nt in AB will providvv e AB Holdindd g with the resourcerr
investmett
• Our finaii ncial conditdd iott n and abilityt
to access the publicll
and privrr atvv e capital marketkk stt providvv indd g adequate liquidity for our
ss needs:dd Our financial condition is dependent on our cash flow from operations, which is subject to the
general busineii
performance of the capital markets, our ability to maintain and grow client assets under management and other factors
beyond our control. Our ability to access public and private capital markets on reasonable terms may be limited by adverse
market conditions, our firm’s credit ratings, our profitability and changes in government regulations, including tax rates and
interest rates.
• The outcome of litigai
tion: Litigation is inherently unpredictable, and excessive damage awards do occur. Though we have
stated that we do not expect any pending legal proceedings to have a material adverse effect on our results of operations,
financial condition or liquidity, any settlement or judgment with respect to a legal proceeding could be significant, and could
have such an effect.
ii
• The possibi
lityt
that we will engage in open marketkk
ted obligatiott ns under
our incentivtt e compensation awarww d program: The number of AB Holding Units AB may decide to buy in future periods, if any,
to help fund incentive compensation awards depends on various factors, some of which are beyond our control, including
the fluctuation in the price of an AB Holding Unit (NYSE: AB) and the availability of cash to make these purchases.
purchases of AB Holdindd g Unitstt
to help fund anticipaii
• Our determinatiott n that adjudd sted employeeyy
nce-based fees,s
generally should not excexx ed 50% of our adjudd sted net revenues on an annual basis:ii 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
net revenues.
compensation expexx nse, exclxx udindd g the impact of perforff marr
• Our Relocation Stratt
tegy:yy While many of the expenses, expense savings and EPU impact we expect will result from our
Relocation Strategy are presented with numerical specificity, and we believe these figures to be reasonable as of the date of
this report, the uncertainties surrounding the assumptions on which our estimates are based create a significant risk that our
current estimates may not be realized. These assumptions include:
2023 Annual Report
57
(cid:41)(cid:51)(cid:68)(cid:70) (cid:34)(cid:34)
•
•
the amount and timing of employee relocation costs, severance, and overlapping compensation and occupancy costs we
experience; and
the timing for execution of each phase of our relocation implementation plan.
(cid:33)(cid:70)(cid:55)(cid:63) (cid:20)(cid:25)(cid:11) (cid:41)(cid:71)(cid:51)(cid:64)(cid:70)(cid:59)(cid:70)(cid:51)(cid:70)(cid:59)(cid:72)(cid:55) (cid:51)(cid:64)(cid:54) (cid:41)(cid:71)(cid:51)(cid:62)(cid:59)(cid:70)(cid:51)(cid:70)(cid:59)(cid:72)(cid:55) (cid:28)(cid:59)(cid:69)(cid:53)(cid:62)(cid:65)(cid:69)(cid:71)(cid:68)(cid:55)(cid:69) (cid:25)(cid:52)(cid:65)(cid:71)(cid:70) (cid:37)(cid:51)(cid:68)(cid:61)(cid:55)(cid:70) (cid:42)(cid:59)(cid:69)(cid:61)
(cid:25)(cid:26) (cid:32)(cid:65)(cid:62)(cid:54)(cid:59)(cid:64)(cid:57)
(cid:37)(cid:51)(cid:68)(cid:61)(cid:55)(cid:70) (cid:42)(cid:59)(cid:69)(cid:61)(cid:9) (cid:42)(cid:59)(cid:69)(cid:61) (cid:37)(cid:51)(cid:64)(cid:51)(cid:57)(cid:55)(cid:63)(cid:55)(cid:64)(cid:70) (cid:51)(cid:64)(cid:54) (cid:28)(cid:55)(cid:68)(cid:59)(cid:72)(cid:51)(cid:70)(cid:59)(cid:72)(cid:55) (cid:30)(cid:59)(cid:64)(cid:51)(cid:64)(cid:53)(cid:59)(cid:51)(cid:62) (cid:33)(cid:64)(cid:69)(cid:70)(cid:68)(cid:71)(cid:63)(cid:55)(cid:64)(cid:70)(cid:69)
AB Holding’s sole investment is AB Units. AB Holding did not own, nor was it a party to, any derivative financial instruments
during the years ended December 31, 2023, 2022 and 2021.
(cid:25)(cid:26)
(cid:37)(cid:51)(cid:68)(cid:61)(cid:55)(cid:70) (cid:42)(cid:59)(cid:69)(cid:61)(cid:9) (cid:42)(cid:59)(cid:69)(cid:61) (cid:37)(cid:51)(cid:64)(cid:51)(cid:57)(cid:55)(cid:63)(cid:55)(cid:64)(cid:70) (cid:51)(cid:64)(cid:54) (cid:28)(cid:55)(cid:68)(cid:59)(cid:72)(cid:51)(cid:70)(cid:59)(cid:72)(cid:55) (cid:30)(cid:59)(cid:64)(cid:51)(cid:64)(cid:53)(cid:59)(cid:51)(cid:62) (cid:33)(cid:64)(cid:69)(cid:70)(cid:68)(cid:71)(cid:63)(cid:55)(cid:64)(cid:70)(cid:69)
Our investments consist of trading and other investments. Trading investments include U.S. Treasury Bills, mutual funds,
exchange-traded options and various separately-managed portfolios consisting of equity securities. Trading investments are
purchased for short-term investment, principally to fund liabilities related to long-term incentive compensation plans and to
seed new investment services. Other
investments include investments in hedge funds we sponsor and other
investment vehicles.
We enter into various futures, forwards, swaps and options primarily to economically hedge our seed capital investments. We
do not hold any derivatives designated in a formal hedge relationship under ASC 815-10, (cid:27)(cid:52)(cid:65)(cid:56)(cid:69)(cid:48)(cid:67)(cid:56)(cid:69)(cid:52)(cid:66) (cid:48)(cid:61)(cid:51) (cid:31)(cid:52)(cid:51)(cid:54)(cid:56)(cid:61)(cid:54)(cid:9) (cid:41)(cid:52)(cid:52) (cid:36)(cid:62)(cid:67)(cid:52) (cid:18)
(cid:27)(cid:52)(cid:65)(cid:56)(cid:69)(cid:48)(cid:67)(cid:56)(cid:69)(cid:52) (cid:32)(cid:61)(cid:66)(cid:67)(cid:65)(cid:68)(cid:60)(cid:52)(cid:61)(cid:67)(cid:66) to AB's consolidated financial statements included in this Form 10-K for additional details.
(cid:44)(cid:68)(cid:51)(cid:54)(cid:59)(cid:64)(cid:57) (cid:51)(cid:64)(cid:54) (cid:38)(cid:65)(cid:64)(cid:10)(cid:44)(cid:68)(cid:51)(cid:54)(cid:59)(cid:64)(cid:57) (cid:37)(cid:51)(cid:68)(cid:61)(cid:55)(cid:70) (cid:42)(cid:59)(cid:69)(cid:61) (cid:43)(cid:55)(cid:64)(cid:69)(cid:59)(cid:70)(cid:59)(cid:72)(cid:55) (cid:33)(cid:64)(cid:69)(cid:70)(cid:68)(cid:71)(cid:63)(cid:55)(cid:64)(cid:70)(cid:69)
(cid:33)(cid:64)(cid:72)(cid:55)(cid:69)(cid:70)(cid:63)(cid:55)(cid:64)(cid:70)(cid:69) (cid:73)(cid:59)(cid:70)(cid:58) (cid:33)(cid:64)(cid:70)(cid:55)(cid:68)(cid:55)(cid:69)(cid:70) (cid:42)(cid:51)(cid:70)(cid:55) (cid:42)(cid:59)(cid:69)(cid:61)(cid:79)(cid:30)(cid:51)(cid:59)(cid:68) (cid:46)(cid:51)(cid:62)(cid:71)(cid:55)
(cid:42)(cid:55)(cid:52) (cid:67)(cid:48)(cid:49)(cid:59)(cid:52) (cid:49)(cid:52)(cid:59)(cid:62)(cid:70) provides our potential exposure with respect to our fixed income investments, measured in terms of fair value,
to an immediate 100 basis point increase in interest rates at all maturities from the levels prevailing as of December 31, 2023
and 2022. Such a fluctuation in interest rates is a hypothetical rate scenario used to calibrate potential risk and does not
represent our view of future market movements. While these fair value measurements provide a representation of interest rate
sensitivity of our investments in fixed income mutual funds and fixed income hedge funds, they are based on our exposures at
a particular point in time and may not be representative of future market results. These exposures will change as a result of
ongoing changes in investments in response to our assessment of changing market conditions and available
investment opportunities:
(cid:26)(cid:69) (cid:65)(cid:56) (cid:29)(cid:55)(cid:53)(cid:55)(cid:63)(cid:52)(cid:55)(cid:68) (cid:18)(cid:16)
(cid:17)(cid:15)(cid:17)(cid:18)
(cid:17)(cid:15)(cid:17)(cid:17)
(cid:31)(cid:51)(cid:59)(cid:68) (cid:47)(cid:51)(cid:62)(cid:71)(cid:55)
(cid:30)(cid:56)(cid:56)(cid:55)(cid:53)(cid:70) (cid:65)(cid:56)
(cid:10)(cid:16)(cid:15)(cid:15)
(cid:27)(cid:51)(cid:69)(cid:59)(cid:69) (cid:41)(cid:65)(cid:59)(cid:64)(cid:70)
(cid:28)(cid:58)(cid:51)(cid:64)(cid:57)(cid:55)
(cid:30)(cid:56)(cid:56)(cid:55)(cid:53)(cid:70) (cid:65)(cid:56)
(cid:10)(cid:16)(cid:15)(cid:15)
(cid:27)(cid:51)(cid:69)(cid:59)(cid:69) (cid:41)(cid:65)(cid:59)(cid:64)(cid:70)
(cid:28)(cid:58)(cid:51)(cid:64)(cid:57)(cid:55)
(cid:31)(cid:51)(cid:59)(cid:68) (cid:47)(cid:51)(cid:62)(cid:71)(cid:55)
(in thousands)
$
70,750
$
(4,394)
$
93,221
$
(5,789)
Fixed Income Investments:
Trading
(cid:20)(cid:23)
(cid:26)(cid:62)(cid:62)(cid:59)(cid:51)(cid:64)(cid:53)(cid:55)(cid:27)(cid:55)(cid:68)(cid:64)(cid:69)(cid:70)(cid:55)(cid:59)(cid:64)
Part II
Investments with Equity Price Risk—Fair Value
Our investments also include investments in equity securities, mutual funds and hedge funds. The following table provides our
potential exposure with respect to our equity investments, measured in terms of fair value, to an immediate 10% decrease in
equity prices from those prevailing as of December 31, 2023 and 2022. A 10% decrease in equity prices is a hypothetical
scenario used to calibrate potential risk and does not represent our view of future market movements. While these fair value
measurements provide a representation of equity price sensitivity of our investments in equity securities, mutual funds and
hedge funds, they are based on our exposures at a particular point in time and may not be representative of future market
results. These exposures will change as a result of ongoing portfolio activities in response to our assessment of changing
market conditions and available investment opportunities:
Equity Investments:
Trading
Other investments
As of December 31
2023
2022
Effect of
-10%
Equity Price
Change
Effect of
-10%
Equity Price
Change
Fair Value
Fair Value
(in thousands)
$ 117,434
$
55,371
$
$
(11,743)
(5,537)
$
$
65,846
58,451
$
$
(6,585)
(5,845)
2023 Annual Report
59
Part II
Item 8. Financial Statements and Supplementary Data
Report of Independent Registered Public Accounting Firm
To the General Partner and Unitholders of AllianceBernstein Holding L.P.
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying statements of financial condition of AllianceBernstein Holding L.P. (the “Company”) as of
December 31, 2023 and 2022, and the related statements of income, of comprehensive income, of changes in partners’ capital
and of cash flows for each of the three years in the period ended December 31, 2023 including the related notes (collectively
referred to as the “financial statements”). We also have audited the Company's internal control over financial reporting as of
December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the
Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in
the period ended December 31, 2023 in conformity with accounting principles generally accepted in the United States of
America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting
as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.
Basis for Opinions
The Company's management is responsible for these financial statements, for maintaining effective internal control over
financial reporting, and for its assessment of the effectiveness of internal control over financial reporting,
included in
Management’s Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express
opinions on the Company’s financial statements and on the Company's internal control over financial reporting based on our
audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States)
(PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws
and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform
the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether
due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audits of the financial statements included performing procedures to assess the risks of material misstatement of the
financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures
included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits
also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating
the overall presentation of the financial statements. Our audit of internal control over financial reporting included obtaining an
understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and
evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included
performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a
reasonable basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed 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. A company’s internal control over financial reporting includes those policies and procedures
that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors of the
company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
60
AllianceBernstein
Part II
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that
was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that
are material to the financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The
communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and
we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the
accounts or disclosures to which it relates.
Measurement of Equity in Net Income Attributable to AB Unitholders - Performance Based
Fees
As described in Notes 1 and 2 to the financial statements, the Company’s principal source of income and cash flow is
attributable to its investment in AllianceBernstein L.P. (AB) limited partnership interests. The equity in net income attributable
to AB unitholders was $299.8 million for the year ended December 31, 2023, of which a portion relates to performance-based
fees which are earned based on the value of the investors’ assets under management (AUM). The Company records its
investment in AB using the equity method of accounting. The Company’s investment is increased to reflect its proportionate
share of income of AB and decreased to reflect its proportionate share of losses of AB and cash distributions made by AB to its
unitholders. In addition, the Company’s investment is adjusted to reflect its proportionate share of certain capital transactions
of AB. As disclosed by management, the Company’s proportionate share of income of AB includes performance-based fees
recognized by AB. The transaction price for the asset management performance obligation for certain investment advisory
contracts, including those associated with hedge funds and alternative investments, provide for a performance-based fee, in
addition to the base advisory fee, which is calculated as either a percentage of absolute investment results or a percentage of
investment results in excess of a stated benchmark over a specified period of time. The performance-based fees are forms of
variable consideration and are therefore excluded from the transaction price until it becomes probable that there will not be
significant reversal of the cumulative revenue recognized. Constraining factors impacting the amount of variable consideration
included in the transaction price include the contractual claw-back provisions to which the variable consideration is subject, the
length of time to which the uncertainty of the consideration is subject, the number and range of possible consideration
amounts, the probability of significant fluctuations in the AUM market value, and the level at which the AUM value exceeds the
contractual threshold required to earn such a fee. Management calculates AUM using established market-based valuation
methods and fair valuation (non-observable market) methods. Fair valuation methods, which include discounted cash flow
models and other methods, are used only where AUM cannot be valued using market-based valuation methods, such as in the
case of private equity or illiquid securities.
The principal considerations for our determination that performing procedures relating to measurement of equity in net income
attributable to AB unitholders – performance-based fees is a critical audit matter are (i) a high degree of auditor effort in
performing procedures and evaluating audit evidence related to these fees, including evaluating audit evidence related to the
assessment of the constraining factors impacting the amount of variable consideration and the calculation of AUM and (ii) the
audit effort involved the use of professionals with specialized skill and knowledge.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall
opinion on the financial statements. These procedures included testing the effectiveness of controls relating to equity in net
including controls relating to management’s revenue recognition process for
income attributable to AB unitholders,
performance-based fees, including controls over the assessment of the constraining factors and the calculation of AUM. These
procedures also included, among others (i) testing management’s process for determining performance-based fees, including
evaluating the appropriateness of the fair valuation methods used to calculate AUM; (ii) evaluating, on a sample basis, the
reasonableness of the constraining factors related to (a) contractual claw-back provisions to which variable consideration is
subject, (b) the length of time to which the uncertainty of the consideration is subject, (c) the number and range of possible
consideration amounts, (d) the probability of significant fluctuations in the AUM market value, and (e) the level at which the
AUM value exceeded the contractual threshold required to earn such fees, as applicable. Professionals with specialized skill
and knowledge were used to assist in evaluating the reasonableness of the AUM by (i) developing an independent range of
prices for a sample of securities in the underlying products where fair valuation methods were used and (ii) comparing the
independent range of prices to management’s estimate. Developing the independent range of prices involved testing the
completeness and accuracy of data provided by management and independently developing the inputs for the sampled
securities.
/s/PricewaterhouseCoopers LLP
Nashville, Tennessee
February 9, 2024
We have served as the Company’s auditor since 2006.
2023 Annual Report
61
Part II
AllianceBernstein Holding L.P.
Statements of Financial Condition
ASSETS
LIABILITIES AND PARTNERS’ CAPITAL
Investment in AB
Total assets
Liabilities:
Other liabilities
Total liabilities
Commitments and contingencies (See Note 7)7
Partners’ capital:
General Partner: 100,000 general partnership units issued and outstanding
Limited partners: 114,336,091 and 113,701,097 limited partnership units issued and
outstanding
AB Holding Units held by AB to fund long-term incentive compensation plans
Accumulated other comprehensive loss
Total partners’ capital
Total liabilities and partners’ capital
See Accompanying Notes to Financial Statements.
Years Ended December 31
2023
2022
n thousands,
except unit amounts)
$ 2,077,540
$ 2,074,626
$2,077,540
$2,074,626
$
$
1,295
1,295
1,623
1,623
1,327
1,355
2,147,147
2,160,207
(30,185)
(42,044)
(37,551)
(51,008)
2,076,245
2,073,003
$2,077,540
$2,074,626
62
AllianceBernstein
AllianceBernstein Holding L.P.
Statements of Income
Equity in net income attributable to AB Unitholders
Income taxes
Net income
Net income per unit:
Basic
Diluted
Part II
Years Ended December 31
2023
2022
2021
(in thousands, except per unit amounts)
$ 299,781
$ 305,504
$ 416,326
35,597
31,339
30,483
$ 264,184
$ 274,165
$ 385,843
$
$
2.34
2.34
$
$
2.69
2.69
$
$
3.88
3.88
See Accompanying Notes to Financial Statements.
2023 Annual Report
63
Part II
AllianceBernstein Holding L.P.
Statements of Comprehensive Income
Net income
Other comprehensive income (loss):
Foreign currency translation adjustments, before reclassification and tax
Less: reclassiffication adjustment ffor gains included in net income
upon liquidation
Foreign currency translation adjustments, before tax
Income tax ((expense)) beneffit
Foreign currency translation adjustments, net of tax
Changes in employee benefit related items:
Amortization of prior service cost
Recognized actuarial gain
Changes in employee benefit related items
Income tax ((expense))
Employee benefit related items, net of tax
Other comprehensive income (l(los )s)
Comprehensive income
Years Ended December 31
2023
2022
2021
n thousands)
$ 264,184
$ 274,165
$ 385,843
5,678
(19,805)
(2,894)
—
5,678
(252)
5,426
9
3,560
3,569
(31)
3,538
8,964
—
(19,805)
249
(19,556)
(12)
1,293
1,281
(28)
1,253
(18,303)
1,613
(4,507)
147
(4,360)
7
5,566
5,573
(20)
5,553
1,193
$ 273,148
$ 255,862
$ 387,036
See Accompanying Notes to Financial Statements.
64
AllianceBernstein
AllianceBernstein Holding L.P.
Statements of Changes in Partners’ Capital
General Partner’s Capital
Balance, beginning of year
Net income
Cash distributions to Unitholders
Balance, end of year
Limited Partners’ Capital
Balance, beginning of year
Net income
Cash distributions to Unitholders
Retirement of AB Holding Units
Issuance of AB Holding Units to fund long-term incentive compensation plan
awards
Issuance of AB Holding Units to fund CarVal acquisition
Exercise of compensatory options to buy AB Holding Units
Balance, end of year
AB Holding Units held by AB to fund long-term incentive compensation plans
Balance, beginning of year
Change in AB Holding Units held by AB to fund long-term incentive
compensation plans
Balance, end of year
Accumulated Other Comprehensive (Loss)
Balance, beginning of year
Foreign currency translation adjustment, net of tax
Changes in employee benefit related items, net of tax
Balance, end of year
Total Partners’ Capital
Part II
Years Ended December 31
2023
2022
2021
(in thousands)
$
1,355
$
1,439
$
1,410
234
(262)
1,327
270
(354)
1,355
387
(358)
1,439
2,160,207
1,696,199
1,656,816
263,950
273,895
385,456
(295,877)
(360,670)
(357,097)
(85,300)
(114,794)
(143,460)
104,167
—
—
76,230
589,169
178
151,082
—
3,402
2,147,147
2,160,207
1,696,199
(37,551)
(43,309)
(20,171)
7,366
5,758
(30,185)
(37,551)
(23,138)
(43,309)
(51,008)
5,426
3,538
(32,705)
(19,556)
1,253
(33,898)
(4,360)
5,553
(42,044)
(51,008)
(32,705)
$2,076,245
$2,073,003
$1,621,624
See Accompanying Notes to Financial Statements.
2023 Annual Report
65
Part II
AllianceBernstein Holding L.P.
Statements of Cash Flows
Cash flows from operating activities:
Net income
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in net income attributable to AB Unitholders
Cash distributions received from AB
Changes in assets and liabilities:
Decrease in other assets
((Decreas )e) increase in other liabilities
Net cash provided by operating activities
Cash flows from investing activities:
Acquisition of business, net cash acquired
Contribution of CarVal to AB
Capital contribution to AB
Investments in AB with proceeds from exercise of compensatory options to buy
AB Holding Units
Net cash used in investing activities
Cash flows from financing activities:
Cash distributions to Unitholders
Capital contributions from AB
Proceeds from exercise of compensatory options to buy AB Holding Units
Net cash used in financing activities
Change in cash and cash equivalents
Cash and cash equivalents as of beginning of the year
Cash and cash equivalents as of end of the year
Cash paid:
Income taxes
Non-cash investing activities:
Fair value of assets acquired (less cash acquired of zero, $40.8 million and zero in
2023, 2022 and 2021, respectively)
Fair value of liabilities assumed
Fair value of non-redeemable non-controlling interest assumed
Fair value of assets contributed to AB (less cash acquired of zero, $40.8 million
and zero in 2023, 2022 and 2021, respectively)
Fair value of liabilities contributed to AB
Fair value of non-redeemable non-controlling interest contributed to AB
Issuance of AB Holding Units to fund long-term incentive compensation
plan awards
Retirement of AB Holding Units
66
AllianceBernstein
Years Ended December 31
2023
2022
2021
(in thousands)
$ 264,184
$ 274,165
$ 385,843
(299,781)
329,900
(305,504)
394,470
(416,326)
385,236
—
(328)
293,975
—
(517)
362,614
92
264
355,109
—
—
—
—
—
40,777
(40,777)
(1,590)
(178)
(1,768)
—
—
—
(3,402)
(3,402)
(296,139)
2,164
—
(293,975)
(361,024)
—
178
(360,846)
(357,455)
2,346
3,402
(351,707)
—
—
—
$
—
—
—
$
—
—
—
35,928
31,862
30,127
—
—
—
—
—
—
$
$1,087,218
296,750
13,191
(1,087,218)
(296,750)
(13,191)
—
—
—
—
—
—
104,167
(85,300)
76,230
(114,794)
151,082
(143,460)
$
$
Non-cash financing activities:
Payables recorded under contingent payment arrangements
Equity consideration issued in connection with acquisition
Payables contributed to and assumed by AB under contingent payment
arrangements
Equity consideration received from AB in connection with acquisition
Part II
Years Ended December 31
2023
2022
2021
(in thousands)
—
—
—
—
228,885
589,169
(228,885)
(589,169)
—
—
—
—
See Accompanying Notes to Financial Statements.
2023 Annual Report
67
Part II
AllianceBernstein Holding L.P.
Notes to Financial Statements
” and “ou“
tein L.P. and its
The words “we““
subsidiaries (“AB“
the word “co“ mpany” refers to both AB Holding and AB. Where the
context requires distinguishing between AB Holding and AB,B we identify which of them is being discussed. Cross-references are
in italics.
”), or to their offiff cers and employees. Similarly,l
Holdindd g”) and AllianceBernsrr
tein Holding L.P. (“AB“
r” refer collectivelyl
to AllianceBernsrr
1. Business Description and Organization
Holding’s principal source of income and cash flow is attributable to its investment in AB limited partnership interests.
AB provides diversified investment management, research and related services globally to a broad range of clients. Its principal
services include:
•
Institutional Services—servicing its institutional clients,
including private and public pension plans, foundations and
endowments, insurance companies, central banks and governments worldwide, and affiliates such as Equitable Holdings,
Inc. ("EQH") and its subsidiaries, by means of separately managed accounts, sub-advisory relationships, structured products,
collective investment trusts, mutual funds, hedge funds and other investment vehicles.
• Retail Services—servicing its retail clients, primarily by means of retail mutual funds sponsored by AB or an affiliated
company, sub-advisory relationships with mutual funds sponsored by third parties, separately managed account programs
sponsored by financial intermediaries worldwide and other investment vehicles.
• Private Wealth Management Services—servicing its private clients, including high-net-worth individuals and families, trusts
and estates, charitable foundations, partnerships, private and family corporations, and other entities, by means of separately
managed accounts, hedge funds, mutual funds and other investment vehicles.
• Bernstein Research Services—servicing institutional investors, such as pension fund, hedge fund and mutual fund managers,
research, quantitative services and brokerage-related services in equities and
seeking high-quality fundamental
listed options.
AB also provides distribution, shareholder servicing, transfer agency services and administrative services to the mutual funds
it sponsors.
AB’s high-quality, in-depth research is the foundation of its asset management and private wealth management businesses.
AB’s research disciplines include economic, fundamental equity, fixed income and quantitative research. In addition, AB has
expertise in multi-asset strategies, wealth management, environmental, social and corporate governance ("ESG"), and
alternative investments.
AB provides a broad range of investment services with expertise in:
• Actively managed equity strategies across global and regional universes, as well as capitalization ranges, concentration
ranges and investment strategies, including value, growth and core equities;
• Actively managed traditional and unconstrained fixed income strategies, including taxable and tax-exempt strategies;
• Actively managed alternative investments, including fundamental and systematically-driven hedge funds, fund of hedge
funds and direct assets (e.g., direct lending, real estate debt and private equity);
• Portfolios with Purpose, including Sustainable, Impact and Responsible+ (Climate-Conscious and ESG leaders) equity, fixed
income and multi-asset strategies that address our clients' desire to invest their capital with a dedicated ESG focus, while
pursuing strong investment returns;
• Multi-asset services and solutions,
including dynamic asset allocation, customized target-date funds and target-risk
funds; and
• Passively managed equity and fixed income strategies, including index, ESG index and enhanced index strategies.
68
AllianceBernstein
Part II
Organization
As of December 31, 2023, EQH owns approximately 3.5% of the issued and outstanding units representing assignments of
beneficial ownership of limited partnership interests in AB Holding (“AB Holding Units”). AllianceBernstein Corporation (an
indirect wholly-owned subsidiary of EQH, “General Partner”) is the general partner of both AB Holding and AB. AllianceBernstein
Corporation owns 100,000 general partnership units in AB Holding and a 1.0% general partnership interest in AB.
As of December 31, 2023, the ownership structure of AB, expressed as a percentage of general and limited partnership
interests, was as follows:
EQH and its subsidiaries
AB Holding
Unaffiliated holders
59.8%
39.5
0.7
100.0%
Including both the general partnership and limited partnership interests in AB Holding and AB, EQH and its subsidiaries had an
approximate 61.2% economic interest in AB as of December 31, 2023.
2. Summary of Significant Accounting Policies
Basis of Presentation
The financial statements have been prepared in accordance with accounting principles generally accepted in the United States
of America. The preparation of the financial statements requires management to make certain estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the
financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could
differ from those estimates.
AB Holding’s financial statements and notes should be read in conjunction with the consolidated financial statements and
notes of AB, which are included in this Form 10-K.
Investment in AB
AB Holding records its investment in AB using the equity method of accounting. AB Holding’s investment is increased to reflect
its proportionate share of income of AB and decreased to reflect its proportionate share of losses of AB and cash distributions
made by AB to its Unitholders. In addition, AB Holding's investment is adjusted to reflect its proportionate share of certain
capital transactions of AB.
Cash Distributions
AB Holding is required to distribute all of its Available Cash Flow, as defined in the Amended and Restated Agreement of
Limited Partnership of AB Holding (“AB Holding Partnership Agreement”), to its Unitholders pro rata in accordance with their
percentage interests in AB Holding. Available Cash Flow is defined as the cash distributions AB Holding receives from AB
minus such amounts as the General Partner determines, in its sole discretion, should be retained by AB Holding for use in its
business (such as the payment of taxes) or plus such amounts as the General Partner determines, in its sole discretion, should
be released from previously retained cash flow.
On February 6, 2024, the General Partner declared a distribution of $0.77 per unit, representing a distribution of Available Cash
Flow for the three months ended December 31, 2023. Each general partnership unit in AB Holding is entitled to receive
distributions equal to those received by each AB Holding Unit. The distribution is payable on March 14, 2024 to holders of
record at the close of business on February 20, 2024.
Total cash distributions per Unit paid to Unitholders during 2023, 2022 and 2021 were $2.62, $3.54 and $3.58, respectively.
Long-term Incentive Compensation Plans
AB maintains several unfunded, non-qualified long-term incentive compensation plans, under which the company grants
awards of restricted AB Holding Units to its employees and members of the Board of Directors, who are not employed by AB or
by any of AB’s affiliates (“Eligible Directors”).
2023 Annual Report
69
Part II
AB funds its restricted AB Holding Unit awards either by purchasing AB Holding Units on the open market or purchasing newly-
issued AB Holding Units from AB Holding, and then keeping these AB Holding Units in a consolidated rabbi trust until delivering
them or retiring them. In accordance with the AB Holding Partnership Agreement, when AB purchases newly-issued AB Holding
Units from AB Holding, AB Holding is required to use the proceeds it receives from AB to purchase the equivalent number of
newly-issued AB Units, thus increasing its percentage ownership interest in AB. AB Holding Units held in the consolidated rabbi
trust are corporate assets in the name of the trust and are available to the general creditors of AB.
Repurchases of AB Holding Units for the years ended December 31, 2023 and 2022 consisted of the following:
Total amount of AB Holding Units Purchased(1)
Total Cash Paid for AB Holding Units Purchased(1)
Open Market Purchases of AB Holding Units Purchased(1)
Total Cash Paid for Open Market Purchases of AB Holding Units(1)
Years Ended December 31
2023
2022
(in millions)
4.7
144.4
2.0
62.6
$
$
5.2
211.8
2.3
92.7
$
$
(1) Purchased on a trade-date basis. The difference between open-market purchases and units retained reflects the retention of AB Holding
Units from employees to fulfill statutory tax withholding requirements at the time of delivery of long-term incentive compensation awards.
Each quarter, AB considers whether to implement a plan to repurchase AB Holding Units pursuant to Rules 10b5-1 and 10b-18
under the Securities Exchange Act of 1934, as amended (“Exchange Act”). A plan of this type allows a company to repurchase
its shares at times when it otherwise might be prevented from doing so because of self-imposed trading blackout periods or
because it possesses material non-public information. Each broker selected by AB has the authority to repurchase AB Holding
Units on AB’s behalf in accordance with the terms and limitations specified in the plan. Repurchases are subject to regulations
promulgated by the U.S. Securities and Exchange Commission (“SEC”) as well as certain price, market volume and timing
constraints specified in the plan. We did not adopt a plan during the fourth quarter of 2023. AB may adopt additional plans in
the future to engage in open-market purchases of AB Holding Units to help fund anticipated obligations under its incentive
compensation award program and for other corporate purposes.
During 2023, AB granted to employees and Eligible Directors 5.6 million restricted AB Holding Units (including 5.0 million
granted in December for 2023 year-end awards). During 2022, AB granted to employees and Eligible Directors 4.7 million
restricted AB Holding Units (including 3.8 million granted in December for 2022 year-end awards). AB used AB Holding Units
repurchased during the periods and newly-issued AB Holding Units to fund these awards.
During 2023 and 2022, AB Holding issued zero and 5,774 AB Holding Units, respectively, upon exercise of options to buy AB
Holding Units. AB Holding used the proceeds of zero and $0.2 million, respectively, received from award recipients as payment
in cash for the exercise price to purchase the equivalent number of newly-issued AB Units.
Subsequent Events
We have evaluated subsequent events through the date that these financial statements were filed with the SEC. See Note 2
Summary of Significff ant Accounting Policies to AB's consolidated financial statements included in this Form 10-K for additional
details.
70
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Part II
3. Net Income Per Unit
Basic net income per unit is derived by dividing net income by the basic weighted average number of units outstanding for each
year. Diluted net income per unit is derived by adjusting net income for the assumed dilutive effect of compensatory options
(“Net income - diluted”) and dividing by the diluted weighted average number of units outstanding for each year.
Net income - basic
Additional allocation of equity in net income attributable to AB resulting from
assumed dilutive effect of compensatory options
Net income - diluted
Weighted average units outstanding - basic
Dilutive effect of compensatory options
Weighted average units outstanding - diluted
Basic net income per unit
Diluted net income per unit
Years Ended December 31
2023
2022
2021
(in thousands, except per unit amounts)
$ 264,184
$ 274,165
$ 385,843
—
2
30
$ 264,184
$ 274,167
$ 385,873
112,948
101,763
99,545
—
1
11
112,948
101,764
99,556
$
$
2.34
2.34
$
$
2.69
2.69
$
$
3.88
3.88
There were no anti-dilutive options excluded from diluted net income in the years ended December 31, 2023, 2022 or 2021.
4. Investment in AB
Changes in AB Holding’s investment in AB for the years ended December 31, 2023 and 2022 are as follows:
Investment in AB as of January 1,
Equity in net income attributable to AB Unitholders
Changes in accumulated other comprehensive income
Cash distributions received from AB
Additional investments with proceeds from exercises of compensatory options to buy AB
Holding Units
Capital contributions to AB
Capital contributions from AB
AB Holding Units retired
AB Holding Units issued to fund long-term incentive compensation plans
AB Holding Units issued to fund CarVal acquisition
Change in AB Holding Units held by AB for long-term incentive compensation plans
Investment in AB as of December 31,
2023
2022
(in thousands)
$ 2,074,626
$ 1,623,764
299,781
8,964
305,504
(18,303)
(329,900)
(394,470)
—
—
(2,164)
178
1,590
—
(85,300)
(114,794)
104,167
—
7,366
76,230
589,169
5,758
$2,077,540
$2,074,626
2023 Annual Report
71
Part II
5. Units Outstanding
Changes in AB Holding Units outstanding for the years ended December 31, 2023 and 2022 are as follows:
Outstanding as of January 1,
Options exercised
Units issued (1)
Units retired
Outstanding as of December 31,
2023
2022
113,801,097
99,271,727
—
5,774
3,283,594
17,326,222
(2,648,600)
(2,802,626)
114,436,091
113,801,097
(1)
Includes 15,321,535 Units issued in 2022 as a result of the CarVal acquisition.
6. Income Taxes
AB Holding is a publicly-traded partnership ("PTP") for federal tax purposes and, accordingly, is not subject to federal or state
corporate income taxes. However, AB Holding is subject to the 4.0% New York City unincorporated business tax (“UBT”), net of
credits for UBT paid by AB, and to a 3.5% federal tax on partnership gross income from the active conduct of a trade or
business. AB Holding’s partnership gross income is derived from its ownership interest in AB.
The principal reasons for the difference between AB Holding’s effective tax rates and the UBT statutory tax rate of 4.0% are
as follows:
2023
Years Ended December 31
2022
(in thousands)
2021
UBT statutory rate
$ 11,991
4.0%
$ 12,220
4.0%
$ 16,653
Federal tax on partnership gross business income
34,765
State income taxes
Credit for UBT paid by AB
832
(11,991)
11.6
0.3
(4.0)
30,676
663
(12,220)
10.0
0.2
(4.0)
29,643
840
(16,653)
Income tax expense and effective tax rate
$35,597
11.9%
$ 31,339
10.3%
$ 30,483
4.0%
7.1
0.2
(4.0)
7.3%
AB Holding’s federal income tax is computed by multiplying certain AB qualifying revenues by AB Holding’s ownership interest
in AB, multiplied by the 3.5% tax rate. Certain AB qualifying revenues are primarily U.S. investment advisory fees, research
payments and brokerage commissions. AB Holding Units in AB’s consolidated rabbi trust are not considered outstanding for
purposes of calculating AB Holding’s ownership interest in AB.
Years Ended December 31
% Change
2023
2022
2021
2023-22
2022-21
(in thousands)
$ 764,610
$ 831,813
$1,148,623
(8.1%)
(27.6%)
39.2 %
36.7%
36.2%
$ 299,781
$ 305,504
$ 416,326
(1.9%)
(26.6%)
$2,790,628
$2,775,693
$2,779,281
0.5
(0.1)
35.6%
3.5%
34,765
832
31.6%
3.5%
30,676
663
30.5%
3.5%
29,643
840
$
35,597
$
31,339
$
30,483
13.6%
2.8%
Net income attributable to AB Unitholders
Multiplied by: weighted average equity
ownership interest
Equity in net income attributable to
AB Unitholders
AB qualifying revenues
Multiplied by: weighted average equity ownership
interest for calculating tax
Multiplied by: federal tax
Federal income taxes
State income taxes
Total income taxes
72
AllianceBernstein
Part II
In order to preserve AB Holding’s status as a PTP for federal income tax purposes, management ensures that AB Holding does
not directly or indirectly (through AB) enter into a substantial new line of business. If AB Holding were to lose its status as a
PTP, it would be subject to corporate income tax, which would reduce materially AB Holding’s net income and its quarterly
distributions to AB Holding Unitholders.
We recognize the effects of a tax position in the financial statements only if, as of the reporting date, it is “more likely than not”
to be sustained based on its technical merits and their applicability to the facts and circumstances of the tax position. In
making this assessment, we assume that the taxing authority will examine the tax position and have full knowledge of all
relevant information. Accordingly, we have no liability for unrecognized tax benefits as of December 31, 2023 and 2022. A
liability for unrecognized tax benefits, if required, would be recorded in income tax expense and affect the company’s effective
tax rate.
As of December 31, 2023, AB Holding is no longer subject to U.S. federal, state, local or foreign examinations by tax authorities
for years before 2019.
7. Commitments and Contingencies
Legal and regulatory matters described below pertain to AB and are included here due to their potential significance to AB
Holding’s investment in AB.
With respect to all significant litigation matters, we consider the likelihood of a negative outcome. If we determine the likelihood
of a negative outcome is probable and the amount of the loss can be reasonably estimated, we record an estimated loss for the
expected outcome of the litigation. Any such accruals are adjusted thereafter as appropriate to reflect changed circumstances.
When we are able to do so, we also determine estimates of reasonably possible losses or ranges of reasonably possible losses
for such matters, whether in excess of any related accrued liability or where there is no accrued liability, and we disclose an
estimate of the possible loss or range of losses. However, it is often difficult to predict the outcome or estimate a possible loss
or range of loss because litigation is subject to inherent uncertainties, particularly when plaintiffs allege substantial or
indeterminate damages. Such is particularly the case when the litigation is in its early stages or when the litigation is highly
complex or broad in scope. In these cases, we disclose that we are unable to predict the outcome or estimate a possible loss or
range of loss. As a result of these types of factors, we are unable, at this time, to estimate the losses that are reasonably
possible to be incurred or ranges of such losses with respect to our significant litigation matters.
On December 14th, 2022, four individual participants in the Profit Sharing Plan for Employees of AllianceBernstein L.P., (the
"Plan") filed a class action complaint (the “Complaint”) in the U.S. District Court for the Southern District of New York against
AB, current and former members of the Compensation Committee of the Board of Directors, and the Investment and
Administrative Committees under the Plan. Plaintiffs, who seek to represent a class of all participants in the Plan from
December 14, 2016 to the present, allege that defendants violated their fiduciary duties and engaged in prohibited transactions
under the Employee Retirement Income Security Act of 1974, as amended ("ERISA") by including proprietary collective
investment trusts as investment options offered under the Plan. The Complaint seeks unspecified damages, disgorgement and
other equitable relief. AB is prepared to defend itself vigorously against these claims and filed a motion to dismiss on February
24, 2023. While the ultimate outcome of this matter is currently not determinable given the matter remains in its early stages,
we do not believe this litigation will have a material adverse effect on our results of operations, financial condition or liquidity.
AB may be involved in various other matters, including regulatory inquiries, administrative proceedings and litigation, some of
which may allege significant damages. It is reasonably possible that AB could incur losses pertaining to these matters, but
management cannot currently estimate any such losses. Management, after consultation with legal counsel, currently believes
that the outcome of any individual matter that is pending or threatened, or all of them combined, will not have a material
adverse effect on our results of operations, financial condition or liquidity. However, any inquiry, proceeding or litigation has the
element of uncertainty; management cannot determine whether further developments relating to any individual matter that is
pending or threatened, or all of them combined, will have a material adverse effect on our results of operations, financial
condition or liquidity in any future reporting period.
8. Acquisition
On July 1, 2022, AB Holding acquired a 100% ownership interest in CarVal Investors L.P. (“CarVal”), a global private alternatives
investment manager primarily focused on opportunistic and distressed credit, renewable energy,
infrastructure, specialty
finance and transportation investments that, as of the acquisition date, constituted approximately $12.2 billion in AUM. Also on
July 1, immediately following the acquisition of CarVal, AB Holding contributed 100% of its equity interests in CarVal to AB in
exchange for AB Units. Post-acquisition, CarVal was rebranded AB CarVal Investors (“AB CarVal”).
On the acquisition date, AB Holding issued approximately 3.2 million AB Holding Units (with a fair value of $132.8 million), with
the remaining 12.1 million Units (with a fair value of $456.4 million) issued on November 1, 2022. The fair value of the units
issued on November 1, 2022 reflects final adjustments to the estimated unit issuance recorded as of acquisition close on July
1, 2022 and as disclosed in the third quarter 2022 Form 10-Q.
2023 Annual Report
73
Part II
AB received 100% equity interest in CarVal from AB Holding and issued approximately 15.3 million AB Units (with a fair value of
$589.2 million). AB also recorded a contingent consideration payable of $228.9 million (to be paid predominantly in AB Units)
based on CarVal achieving certain performance objectives over a six-year period ending December 31, 2027. The AB Units, as
discussed above, were issued to AB Holding; AB Holding then issued the equal amount of AB Holding Units to CarVal. The
excess of the purchase price over the current fair value of identifiable net liabilities acquired of $156.1 million (net of cash
acquired of $40.8 million), resulted in the recognition of $671.2 million of goodwill and the recording of $303.0 million of finite-
lived intangible assets primarily relating to investment management contracts and investor relationships with useful lives
ranging from 5 to 10 years. As a result of the transfer of equity to AB, AB recorded a net deferred tax asset of $5.1 million,
resulting in the recognition of $666.1 million of goodwill. The goodwill recorded is not deductible for tax purposes as the CarVal
acquisition was an investment in a partnership.
The following table summarizes the amounts of identified assets acquired and liabilities assumed at the acquisition date
(reflecting acquisition adjustments recorded in the fourth quarter of 2022), as well as the consideration transferred to acquire
CarVal (in thousands):
Summary of purchase consideration:
Fair value of AB Holding units issued
Fair value of contingent consideration
Total purchase consideration
Purchase price allocation:
Assets acquired:
Cash and cash equivalents
Receivables, net
Investments - other
Furniture, equipment, and leasehold improvements, net
Right-of-use assets
Other assets
Intangible assets
Goodwill
Total assets acquired
Liabilities assumed:
Accounts payable and accrued expenses
Accrued compensation and benefits
Debt
Lease liabilities
Non-redeemable non-controlling interests in consolidated entities
Total liabilities assumed
Net assets acquired
$
589,169
228,885
818,054
$
40,777
82,523
947
2,464
16,482
10,600
303,000
671,203
1,127,996
(17,793)
(219,726)
(42,661)
(16,571)
(13,191)
(309,942)
$
818,054
The CarVal acquisition did not have a significant impact on our 2022 revenues and earnings. As a result, we have not provided
supplemental pro forma financial information.
74
AllianceBernstein
Part II
Report of Independent Registered Public Accounting Firm
To the General Partner and Unitholders of AllianceBernstein L.P.
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated statements of financial condition of AllianceBernstein L.P. and its
subsidiaries (the “Company”) as of December 31, 2023 and 2022, and the related consolidated statements of income, of
comprehensive income, of changes in partners’ capital and of cash flows for each of the three years in the period ended
December 31, 2023, including the related notes and financial statement schedule listed in the index appearing under Item 15(a)
(collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control over
financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013)
issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial
position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the
three years in the period ended December 31, 2023 in conformity with accounting principles generally accepted in the United
States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial
reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by
the COSO.
Basis for Opinions
The Company's management is responsible for these consolidated financial statements, for maintaining effective internal
control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included
in Management’s Report on Internal Control Over Financial Reporting appearing under Item 9A. Our responsibility is to express
opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting
based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United
States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities
laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform
the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material
misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all
material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material
misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond
to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the
consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates
made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of
internal control over financial reporting included obtaining an understanding of internal control over financial reporting,
assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of
internal control based on the assessed risk. Our audits also included performing such other procedures as we considered
necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed 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. A company’s internal control over financial reporting includes those policies and procedures
that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors of the
company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
2023 Annual Report
75
Part II
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial
statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or
disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or
complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated
financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate
opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Pe frformance Based Fees
As described in Notes 2 and 3 to the consolidated financial statements, the Company’s performance-based fees earned were
$144.9 million for the year ended December 31, 2023, which are earned based on the value of the investors’ assets under
management (AUM). The transaction price for the asset management performance obligation for certain investment advisory
contracts, including those associated with hedge funds and alternative investments, provide for a performance-based fee, in
addition to the base advisory fee, which is calculated as either a percentage of absolute investment results or a percentage of
investment results in excess of a stated benchmark over a specified period of time. The performance-based fees are forms of
variable consideration and are therefore excluded from the transaction price until it becomes probable that there will not be
significant reversal of the cumulative revenue recognized. Constraining factors impacting the amount of variable consideration
included in the transaction price include the contractual claw-back provisions to which the variable consideration is subject, the
length of time to which the uncertainty of the consideration is subject, the number and range of possible consideration
amounts, the probability of significant fluctuations in the AUM market value, and the level at which the AUM value exceeds the
contractual threshold required to earn such a fee. Management calculates AUM using established market-based valuation
methods and fair valuation (non-observable market) methods. Fair valuation methods, which include discounted cash flow
models and other methods, are used only where AUM cannot be valued using market-based valuation methods, such as in the
case of private equity or illiquid securities.
The principal considerations for our determination that performing procedures relating to performance-based fees is a critical
audit matter are (i) a high degree of auditor effort in performing procedures and evaluating audit evidence related to these fees,
including evaluating audit evidence related to the assessment of the constraining factors impacting the amount of variable
consideration and the calculation of AUM and (ii) the audit effort involved the use of professionals with specialized skill and
knowledge.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall
opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to
management’s revenue recognition process for performance-based fees,
including controls over the assessment of the
constraining factors and the calculation of AUM. These procedures also included, among others (i) testing management’s
process for determining performance-based fees, including evaluating the appropriateness of the fair valuation methods used
to calculate AUM; (ii) evaluating, on a sample basis, the reasonableness of the constraining factors related to (a) contractual
claw-back provisions to which variable consideration is subject, (b) the length of time to which the uncertainty of the
consideration is subject, (c) the number and range of possible consideration amounts, (d) the probability of significant
fluctuations in the AUM market value, and (e) the level at which the AUM value exceeded the contractual threshold required to
earn such fees, as applicable. Professionals with specialized skill and knowledge were used to assist in evaluating the
reasonableness of the AUM by (i) developing an independent range of prices for a sample of securities in the underlying
products where fair valuation methods were used and (ii) comparing the independent range of prices to management’s
estimate. Developing the independent range of prices involved testing the completeness and accuracy of data provided by
management and independently developing the inputs for the sampled securities.
/s/PricewaterhouseCoopers LLP
Nashville, Tennessee
February 9, 2024
We have served as the Company’s auditor since 2006.
76
AllianceBernstein
AllianceBernstein L.P. and Subsidiaries
Consolidated Statements of Financial Condition
Part II
Cash and cash equivalents
Cash and securities segregated, at fair value (cost $859,448 and $1,511,916)
ASSETS
Receivables, net:
Brokers and dealers
Brokerage clients
AB funds fees
Other fees
Investments:
Long-term incentive compensation-related
Other
Assets of consolidated company-sponsored investment funds:
Cash and cash equivalents
Investments
Other assets
Furniture, equipment and leasehold improvements, net
Goodwill
Intangible assets, net
Deferred sales commissions, net
Right-of-use assets
Assets held for sale
Other assets
Total assets
Years Ended December 31
2023
2022
(in thousands,
except unit amounts)
$ 1,000,103
$ 1,130,143
867,680
1,522,431
53,144
112,226
1,314,656
1,881,496
343,334
125,500
40,033
203,521
7,739
397,174
25,299
176,348
314,247
127,040
47,870
169,648
19,751
516,536
44,424
189,258
3,598,591
3,598,591
264,555
87,374
323,766
564,776
216,213
310,203
52,250
371,898
551,351
179,568
$ 9,609,806
$ 11,138,931
2023 Annual Report
77
Part II
LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST AND CAPITAL
Liabilities:
Payables:
Brokers and dealers
Brokerage clients
AB mutual funds
Contingent consideration liability
Accounts payable and accrued expenses
Lease liabilities
Liabilities of consolidated company-sponsored investment funds
Accrued compensation and benefits
Debt
Liabilities held for sale
Total liabilities
Commitments and contingencies (See Note 14)4
Years Ended December 31
2023
2022
(in thousands,
except unit amounts)
$
259,175
$
389,828
2,200,835
3,322,903
644
252,690
172,163
369,017
12,537
372,305
1,154,316
153,342
162,291
247,309
173,466
427,479
55,529
415,878
990,000
107,952
4,947,024
6,292,635
Redeemable non-controlling interest of consolidated entities
209,420
368,656
Capital:
General Partner
Limited partners: 286,609,212 and 285,979,913 units issued and outstanding
Receivables from affiliates
AB Holding Units held for long-term incentive compensation plans
Accumulated other comprehensive loss
Partners’ capital attributable to AB Unitholders
Non-redeemable non-controlling interests in consolidated entities
Total capital
Total liabilities, non-controlling interest and capital
45,388
45,985
4,590,619
4,648,113
(4,490)
(76,363)
(4,270)
(95,318)
(106,364)
(129,477)
4,448,790
4,465,033
4,572
12,607
4,453,362
4,477,640
$ 9,609,806
$ 11,138,931
See Accompanying Notes to Consolidated Financial Statements.
78
AllianceBernstein
Part II
AllianceBernstein L.P. and Subsidiaries
Consolidated Statements of Income
Revenues:
Investment advisory and services fees
$2,975,468
$2,971,038
$3,194,524
Years Ended December 31
2023
2022
2021
(in thousands, except per unit amounts)
Bernstein research services
Distribution revenues
Dividend and interest income
Investment gains (losses)
Other revenues
Total revenues
Less: Broker-dealer related interest expense
Net revenues
Expenses:
Employee compensation and benefits
Promotion and servicing:
Distribution-related payments
Amortization of deferred sales commissions
Trade execution, marketing, T&E and other
General and administrative
Contingent payment arrangements
Interest on borrowings
Amortization of intangible assets
Total expenses
Operating income
Income tax
Net income
Net income (loss) income of consolidated entities attributable to non-
controlling interests
Net income attributable to AB Unitholders
Net income per AB Unit:
Basic
Diluted
386,142
586,263
199,443
14,206
101,342
416,273
607,195
123,091
452,017
652,240
38,734
(102,413)
(636)
105,544
108,409
4,262,864
4,120,728
4,445,288
107,541
66,438
3,686
4,155,323
4,054,290
4,441,602
1,769,153
1,666,636
1,716,013
610,368
36,817
215,643
581,571
22,853
54,394
46,854
629,572
34,762
215,556
641,635
6,563
17,906
26,564
708,117
34,364
197,486
555,608
2,710
5,145
5,697
3,337,653
3,239,194
3,225,140
817,670
29,051
788,619
815,096
1,216,462
39,639
62,728
775,457
1,153,734
24,009
(56,356)
5,111
$ 764,610
$ 831,813
$1,148,623
$
$
2.65
2.65
$
$
3.01
3.01
$
$
4.18
4.18
See Accompanying Notes to Consolidated Financial Statements.
2023 Annual Report
79
Part II
AllianceBernstein L.P. and Subsidiaries
Consolidated Statements of Comprehensive Income
Net income
Other comprehensive income:
Foreign currency translation adjustments, before reclassification and tax:
Less: reclassification adjustment for (losses) gains included in net income
upon liquidation
Foreign currency translation adjustments, before tax
Income tax (expense) benefit
Foreign currency translation adjustments, net of tax
Changes in employee benefit related items:
Amortization of prior service cost
Recognized actuarial gain
Changes in employee benefit related items
Income tax (expense)
Employee benefit related items, net of tax
Other comprehensive gain (loss)
Years Ended December 31
2023
2022
2021
(in thousands)
$ 788,619
$ 775,457
$ 1,153,734
14,262
(47,208)
(7,839)
(389)
14,651
(618)
14,033
24
9,135
9,159
(79)
9,080
23,113
—
4,458
(47,208)
(12,297)
1,215
457
(45,993)
(11,840)
24
6,922
6,946
(95)
6,851
(39,142)
24
15,743
15,767
(59)
15,708
3,868
Less: Comprehensive income (loss) in consolidated entities attributable to
non-controlling interests
Comprehensive income attributable to AB Unitholders
24,009
(56,356)
5,111
$ 787,723
$ 792,671
$1,152,491
See Accompanying Notes to Consolidated Financial Statements.
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AllianceBernstein L.P. and Subsidiaries
Consolidated Statements of Changes in Partners’ Capital
Part II
General Partner’s Capital
Balance, beginning of year
Net income
Cash distributions to General Partner
Long-term incentive compensation plans activity
Issuance (retirement) of AB Units, net
Issuance of AB Units for CarVal acquisition
Balance, end of year
Limited Partners' Capital
Balance, beginning of year
Net income
Cash distributions to Unitholders
Long-term incentive compensation plans activity
Issuance (retirement) of AB Units, net
Issuance of AB Units for CarVal acquisition
Balance, end of year
Receivables from Affiliates
Balance, beginning of year
Long-term incentive compensation awards expense
Capital contributions (to) from AB Holding
Balance, end of year
AB Holding Units held for Long-term Incentive Compensation Plans
Years Ended December 31
2023
2022
2021
(in thousands)
$
45,985
$
42,850
$
41,776
7,646
(8,411)
(21)
189
—
8,318
(10,715)
25
(385)
5,892
11,486
(10,605)
117
76
—
45,388
45,985
42,850
4,648,113
4,336,211
4,229,485
756,964
823,495
1,137,137
(830,860)
(1,059,105)
(1,049,287)
(2,080)
18,482
—
2,521
(38,286)
583,277
11,586
7,290
—
4,590,619
4,648,113
4,336,211
(4,270)
(8,333)
(8,316)
727
(947)
607
3,456
941
(958)
(4,490)
(4,270)
(8,333)
Balance, beginning of year
(95,318)
(119,470)
(57,219)
Purchases of AB Holding Units to fund long-term compensation plans, net
(144,086)
(210,568)
(261,825)
(Issuance) retirement of AB Units, net
Long-term incentive compensation awards expense
Re-valuation of AB Holding Units held in rabbi trust
Other
Balance, end of year
(17,562)
179,724
879
—
40,346
198,783
(4,240)
(169)
(7,348)
215,484
(9,690)
1,128
(76,363)
(95,318)
(119,470)
2023 Annual Report
81
Part II
Accumulated Other Comprehensive (Loss)
Balance, beginning of year
Foreign currency translation adjustment, net of tax
Changes in employee benefit related items, net of tax
Balance, end of year
Years Ended December 31
2023
2022
2021
(in thousands)
(129,477)
14,033
9,080
(90,335)
(45,993)
6,851
(106,364)
(129,477)
(94,203)
(11,840)
15,708
(90,335)
Total Partners' Capital attributable to AB Unitholders
4,448,790
4,465,033
4,160,923
Non-redeemable Non-controlling Interests in Consolidated Entities
Balance, beginning of year
CarVal acquisition
Net income
Distributions to non-controlling interests, net
Adjustment
Balance, end of year
Total Capital
12,607
—
743
(8,514)
(264)
4,572
—
12,607
—
—
—
12,607
—
—
—
—
—
—
$ 4,453,362
$ 4,477,640
$ 4,160,923
See Accompanying Notes to Consolidated Financial Statements.
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Part II
AllianceBernstein L.P. and Subsidiaries
Consolidated Statements of Cash Flows
Cash flows from operating activities:
Net income
Adjustments to reconcile net income to net cash provided by operating
activities:
Amortization of deferred sales commissions
Non-cash long-term incentive compensation expense
Depreciation and other amortization
Unrealized (gains) losses on investments
Unrealized (gains) losses on investments of consolidated company-
sponsored investment funds
Non-cash lease expense
(Gain) loss on assets held for sale
Change is estimate of contingent payment arrangements
Other, net
Changes in assets and liabilities:
Decrease (increase) in securities, segregated
Decrease (increase) in receivables
(Increase) in investments
Decrease (increase) in investments of consolidated company-sponsored
investment funds
(Increase) in deferred sales commissions
(Increase) in other assets
(Increase) decrease in other assets and liabilities of consolidated
company-sponsored investment funds, net
(Decrease) increase in payables
(Decrease) increase in accounts payable and accrued expenses
(Decrease) increase in accrued compensation and benefits
Cash payments to relieve operating lease liabilities
Net cash provided by operating activities
Cash flows from investing activities:
Purchases of furniture, equipment and leasehold improvements
Acquisition of businesses, net of cash acquired
Net cash used in investing activities
Years Ended December 31
2023
2022
2021
(in thousands)
$ 788,619
$ 775,457
$ 1,153,734
36,817
180,451
92,113
(7,810)
(48,350)
101,761
(800)
14,050
(4,641)
654,751
629,204
(10,656)
167,712
(71,941)
(36,263)
34,762
199,390
66,617
40,857
73,194
99,861
7,400
—
14,604
(18,474)
35,410
(10,331)
23,295
(12,113)
(5,487)
(23,867)
(1,451,280)
(6,992)
(22,848)
(107,738)
872,292
(45,432)
110,112
(8,424)
(150,285)
(109,182)
1,121,231
34,364
216,425
44,985
4,454
1,882
98,773
—
—
22,580
249,521
(360,789)
(27,000)
(312,325)
(45,197)
(6,578)
38,161
214,139
35,877
50,545
(114,769)
1,298,782
(33,627)
—
(33,627)
(62,308)
40,282
(22,026)
(61,931)
(3,793)
(65,724)
2023 Annual Report
83
Part II
Cash flows from financing activities:
Proceeds from debt, net
(Decrease) increase in overdrafts payable
Distributions to General Partner and Unitholders
(Redemptions) subscriptions of non-controlling interests of consolidated
company-sponsored investment funds, net
Capital contributions (to) from affiliates
Additional investments by AB Holding with proceeds from exercise of
compensatory options to buy AB Holding Units
Purchases of AB Holding Units to fund long-term incentive compensation plan
awards, net
Payment of acquisition-related debt obligation
Other, net
Net cash used in financing activities
Effect of exchange rate changes on cash and cash equivalents
Net (decrease) increase in cash and cash equivalents
Cash and cash equivalents as of beginning of the period
Years Ended December 31
2023
2022
(in thousands)
2021
164,316
—
235,000
(25,411)
80,000
16,192
(839,271)
(1,069,820)
(1,059,892)
(183,245)
(2,164)
3,843
1,590
313,699
(2,346)
—
178
3,402
(144,086)
(210,568)
(261,825)
—
(4,870)
(42,661)
(2,131)
—
(2,186)
(1,009,320)
(1,109,980)
(912,956)
22,527
(148,128)
(56,234)
(67,009)
(17,982)
302,120
1,309,017
1,376,026
1,073,906
Cash and cash equivalents as of end of the period
$ 1,160,889
$ 1,309,017
$ 1,376,026
Cash paid:
Interest paid
Income taxes paid
$
155,335
$
78,434
$
57,261
55,473
5,263
55,656
Non-cash investing activities:
Fair value of assets acquired (excluding cash acquired of zero, $40.8 million
and $2.8 million, for 2023, 2022 and 2021, respectively)
Fair value of deferred tax asset recorded
Fair value of liabilities assumed
Fair value of non-redeemable non-controlling interest recorded
Non-cash financing activities:
Payables recorded under contingent payment arrangements
Equity consideration issued in connection with acquisition
—
—
—
—
—
—
1,085,141
13,235
5,072
296,750
13,191
231,385
589,169
—
1,642
—
7,800
—
See Accompanying Notes to Consolidated Financial Statements.
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AllianceBernstein L.P. and Subsidiaries
Notes to Consolidated Financial Statements
Part II
The words “we““
Similarly,l
the word “co“ mpany” refers to AB. Cross-references are in italics.
” and “ou“
r” refer collectivelyl
to AllianceBernsrr
tein L.P. and its subsidiaries (“AB“
”), or to their offiff cers and employees.
1. Business Description and Organization
provide diversified investment management, research and related services globally to a broad range of clients. Our principal
services include:
•
Institutional Services—servicing our institutional clients,
including private and public pension plans, foundations and
endowments, insurance companies, central banks and governments worldwide, and affiliates such as Equitable Holdings,
Inc. ("EQH") and its subsidiaries, by means of separately managed accounts, sub-advisory relationships, structured products,
collective investment trusts, mutual funds, hedge funds and other investment vehicles.
• Retail Services—servicing our retail clients, primarily by means of retail mutual funds sponsored by AB or an affiliated
company, sub-advisory relationships with mutual funds sponsored by third parties, separately managed account programs
sponsored by financial intermediaries worldwide and other investment vehicles.
• Private Wealth Management Services—servicing our private clients, including high-net-worth individuals and families, trusts
and estates, charitable foundations, partnerships, private and family corporations, and other entities, by means of separately
managed accounts, hedge funds, mutual funds and other investment vehicles.
• Bernstein Research Services—servicing institutional investors, such as pension fund, hedge fund and mutual fund managers,
research, quantitative services and brokerage-related services in equities and
seeking high-quality fundamental
listed options.
We also provide distribution, shareholder servicing, transfer agency services and administrative services to the mutual funds
we sponsor.
Our high-quality, in-depth research is the foundation of our asset management and private wealth management businesses. Our
research disciplines include economic, fundamental equity, fixed income and quantitative research.
In addition, we have
expertise in multi-asset strategies, wealth management, environmental, social and corporate governance ("ESG"), and
alternative investments.
We provide a broad range of investment services with expertise in:
• Actively managed equity strategies across global and regional universes, as well as capitalization ranges, concentration
ranges and investment strategies, including value, growth and core equities;
• Actively managed traditional and unconstrained fixed income strategies, including taxable and tax-exempt strategies;
• Actively managed alternative investments, including fundamental and systematically-driven hedge funds, fund of hedge
funds and direct assets (e.g., direct lending, real estate debt and private equity);
• Portfolios with Purpose, including Sustainable, Impact and Responsible+ (Climate-Conscious and ESG leaders) equity, fixed
income and multi-asset strategies that address our clients' desire to invest their capital with a dedicated ESG focus, while
pursuing strong investment returns;
• Multi-asset services and solutions,
including dynamic asset allocation, customized target-date funds and target-risk
funds; and
• Passively managed equity and fixed income strategies, including index, ESG index and enhanced index strategies.
Organization
As of December 31, 2023, EQH owned approximately 3.5% of the issued and outstanding units representing assignments of
beneficial ownership of limited partnership interests in AllianceBernstein Holding L.P. (“AB Holding Units”). AllianceBernstein
Corporation (an indirect wholly-owned subsidiary of EQH, “General Partner”) is the general partner of both AllianceBernstein
Holding L.P. (“AB Holding”) and AB. AllianceBernstein Corporation owns 100,000 general partnership units in AB Holding and a
1.0% general partnership interest in AB.
2023 Annual Report
85
Part II
As of December 31, 2023, the ownership structure of AB, including limited partnership units outstanding as well as the general
partner's 1.0% interest, was as follows:
EQH and its subsidiaries
AB Holding
Unaffiliated holders
59.8%
39.5
0.7
100.0%
Including both the general partnership and limited partnership interests in AB Holding and AB, EQH and its subsidiaries had an
approximate 61.2% economic interest in AB as of December 31, 2023.
2. Summary of Significant Accounting Policies
Basis of Presentation
The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the
United States of America ("US GAAP"). The preparation of the consolidated financial statements requires management to make
certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the dates of the consolidated financial statements and the reported amounts of revenues and expenses
during the reporting periods. Actual results could differ from those estimates.
Principles of Consolidation
The consolidated financial statements include AB and its majority-owned and/or controlled subsidiaries, and the consolidated
entities that are considered to be variable interest entities ("VIEs") and voting interest entities ("VOEs") in which AB has a
controlling financial interest. Non-controlling interests on the consolidated statements of financial condition include the portion
of consolidated company-sponsored investment funds in which we do not have direct equity ownership. All significant inter-
company transactions and balances among the consolidated entities have been eliminated.
Recently Adopted Accounting Pronouncements or Accounting Pronouncements
Not Yet Adopted
Recently Adopted Accounting Pronouncements
During 2023, there have been no recently adopted accounting pronouncements that have or are expected to have a material
impact on our consolidated results of operations.
Accounting Pronouncements Not Yet Adopted
In December 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-09, Income Taxes (TopTT ic 740):
Improvements to Income Tax Disclosures. This amendment is expected to enhance the transparency and decision usefulness of
income tax disclosures by requiring public business entities, on an annual basis, to disclose specific categories in the rate
reconciliation, additional information for reconciling items that meet a quantitative threshold and certain information about
income taxes paid. This revised guidance is effective for financial statements issued for fiscal years beginning after December
15, 2024. The revised guidance will not have a material impact on our financial condition or results of operations.
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (TopTT ic 280): Improvements to Reportable Segment
Disclosures, which requires disclosure of incremental segment information on an annual and interim basis. This ASU is
effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December
15, 2024, and requires retrospective application to all prior periods presented in the financial statements. We are currently
evaluating the impacts of the new standard.
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Part II
Revenue Recognition
Investment Advisory and Services Fees
AB provides asset management services by managing customer assets and seeking to deliver investment returns to investors.
Each investment management contract between AB and a customer creates a distinct, separately identifiable performance
obligation for each day the customer’s assets are managed as the customer can benefit from each day of service. In
accordance with ASC 606, a series of distinct goods and services that are substantially the same and have the same pattern of
transfer to the customer are treated as a single performance obligation. Accordingly, we have determined that our investment
and advisory services are performed over time and entitle us to variable consideration earned based on the value of the
investors’ assets under management (“AUM”).
We calculate AUM using established market-based valuation methods and fair valuation (non-observable market) methods.
Market-based valuation methods include: last sale/settle prices from an exchange for actively-traded listed equities, options
and futures; evaluated bid prices from recognized pricing vendors for fixed income, asset-backed or mortgage-backed issues;
mid prices from recognized pricing vendors and brokers for credit default swaps; and quoted bids or spreads from pricing
vendors and brokers for other derivative products. Fair valuation methods include: discounted cash flow models or any other
methodology that is validated and approved by our Valuation Committee (see paragraph immediatelyl below for additional
information about our Valuation Committee). Fair valuation methods are used only where AUM cannot be valued using
market-based valuation methods, such as in the case of private equity or illiquid securities.
The Valuation Committee, which consists of senior officers and employees, is responsible for overseeing the pricing and
valuation of all investments held in client and AB portfolios. The Valuation Committee has adopted a Statement of Pricing
Policies describing principles and policies that apply to pricing and valuing investments held in these portfolios. We also have a
Pricing Group, which reports to the Valuation Committee and is responsible for overseeing the pricing process for
investments. We record as revenue investment advisory and services base fees, which we generally calculate as a
all
percentage of AUM. At month-end, all the components of the transaction price (i.e., the base fee calculation) are no longer
variable and the value of the consideration is determined. These fees are not subject to claw back and there is minimal
probability that a significant reversal of the revenue recorded will occur.
The transaction price for the asset management performance obligation for certain investment advisory contracts, including
those associated with hedge funds and other alternative investments, provide for a performance-based fee (including carried
interest), in addition to a base advisory fee, which is calculated as either a percentage of absolute investment results or a
percentage of investment results in excess of a stated benchmark over a specified period of time. The performance-based fees
are forms of variable consideration and are therefore excluded from the transaction price until it becomes probable that there
will not be significant reversal of the cumulative revenue recognized. At each reporting date, we evaluate the constraining
factors, discussed below,w surrounding the variable consideration to determine the extent to which, if any, revenues associated
with the performance-based fee can be recognized.
Constraining factors impacting the amount of variable consideration included in the transaction price include: the contractual
claw-back provisions to which the variable consideration is subject, the length of time to which the uncertainty of the
consideration is subject, the number and range of possible consideration amounts, the probability of significant fluctuations in
the AUM market value and the level at which the AUM value exceeds the contractual threshold required to earn such a fee.
Bernstein Research Services
Bernstein Research Services revenue consists principally of commissions received, and to a lesser but increasing extent, direct
payments for trade execution services and equity research services provided to institutional clients. Brokerage commissions
for trade execution services and related expenses are recorded on a trade-date basis when the performance obligations are
satisfied. Generally, the transaction price is agreed upon at the time of each trade and is based upon the number of shares
traded or the value of the consideration traded. The transaction price for research revenues is not fixed and is at the customer's
discretion. In many cases there is no contract between AB and the customer for research services, so there is no performance
obligation present that requires AB to provide the research or for the customer to compensate AB for the research consumed.
The customer has the unilateral right to determine the amount it will pay and whether it will continue to receive research.
Research revenues are recognized when the transaction price is quantified, collectability is assured and significant reversal of
such revenue is not probable.
In the fourth quarter of 2022, AB and Société Générale (EURONEXT: GLE, “SocGen”), a leading European bank, announced plans
to form a joint venture combining their respective cash equities and research businesses. As a result, the Bernstein Research
2023 Annual Report
87
Part II
Services ("BRS") business has been classified as held for sale. For further discussion,
and Divestitures.
see Note 24 Acquisitions
Distribution Revenues
Two of our subsidiaries act as distributors and/or placement agents of company-sponsored mutual funds and receive
distribution services fees from certain of those funds as full or partial reimbursement of the distribution expenses they incur.
The variable consideration can be determined in different ways, as discussed below,w as we satisfy the performance obligation
depending on the contractual arrangements with the customer and the specific product sold.
Most open-end U.S. funds have adopted a plan under Rule 12b-1 of the Investment Company Act that allows the fund to pay,
out of assets of the fund, distribution and service fees for the distribution and sale of its shares (“12b-1 fees”). The open-end
U.S. funds have such agreements with us, and we have selling and distribution agreements pursuant to which we pay sales
commissions to the financial intermediaries that distribute our open-end U.S. funds. These agreements are terminable by either
party upon notice (generally 30 days) and do not obligate the financial intermediary to sell any specific amount of fund shares.
We record 12b-1 fees monthly based upon a percentage of the net asset value (“NAV”) of the funds. At month-end, the variable
consideration of the transaction price is no longer constrained as the NAV can be calculated and the value of consideration is
determined. These services are separate and distinct from other asset management services as the customer can benefit from
these services independently of other services. We accrue the corresponding 12b-1 fees paid to sub-distributors monthly as the
expenses are incurred. We are acting in a principal capacity in these transactions; as such, these revenues and expenses are
recorded on a gross basis.
We offer back-end load shares in limited instances and charge the investor a contingent deferred sales charge (“CDSC”) if the
investment is redeemed within a certain period. The variable consideration for these contracts is contingent on the timing of
the redemption by the investor and the value of the sale proceeds. Due to these constraining factors, we exclude the CDSC fee
from the transaction price until the investor redeems the investment. Upon redemption, the cash consideration received for
these contractual arrangements are recorded as reductions of unamortized deferred sales commissions.
Our Luxembourg subsidiary, the management company for most of our non-U.S. funds, earns a management fee that is
accrued daily and paid monthly, at an annual rate, based on the average daily net assets of the fund. With respect to certain
share classes, the management fee may also contain a component that is paid to distributors and other financial intermediaries
and service providers to cover shareholder servicing and other administrative expenses (also referred to as an All-in-Fee). As
we have concluded that asset management is distinct from distribution, we allocate a portion of the investment and advisory
fee to distribution revenues for the servicing component based on standalone selling prices.
Other Revenues
Revenues from contracts with customers include a portion of other revenues, which consists primarily of shareholder servicing
fees, as well as mutual fund reimbursements and other brokerage income.
We provide shareholder services, which include transfer agency, administrative and recordkeeping services provided to
company-sponsored mutual funds. The consideration for these services is based on a percentage of the NAV of the fund or a
fixed fee based on the number of shareholder accounts being serviced. The revenues are recorded at month-end when the
constraining factors involved with determining NAV or the number of shareholders’ accounts are resolved.
Non-Contractual Revenues
Dividend and interest income is accrued as earned. Investment gains and losses on the consolidated statements of income
include unrealized gains and losses of trading and private equity investments stated at fair value, equity in earnings of our
limited partnership hedge fund investments, and realized gains and losses on investments sold.
Contract Assets and Liabilities
We use the practical expedient for contracts that have an original duration of one year or less. Accordingly, we do not consider
the time value of money and, instead, accrue the incremental costs of obtaining the contract when incurred. As of December 31,
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AllianceBernstein
Part II
2023, the balances of contract assets and contract liabilities are not considered material and, accordingly, no further
disclosures are necessary.
Consolidation of Company-Sponsored Investment Funds
For legal entities (company-sponsored investment funds) evaluated for consolidation, we first determine whether the fees we
receive and the interests we hold qualify as a variable interest in the entity, including an evaluation of fees paid to us as a
decision maker or service provider to the entity being evaluated. Fees received by us are not variable interests if (i) the fees are
compensation for services provided and are commensurate with the level of effort required to provide those services, (ii) the
service arrangement includes only terms, conditions or amounts that are customarily present in arrangements for similar
services negotiated at arm’s length, and (iii) our other economic interests in the entity held directly and indirectly through our
related parties, as well as economic interests held by related parties under common control, would not absorb more than an
insignificant amount of the entity’s losses or receive more than an insignificant amount of the entity’s benefits. For purposes of
determining whether AB has an equity interest in an entity, the related parties referred to above are those entities under
common control that AB has a direct variable interest in and considered a consolidated entity. Our parent company, EQH,
regularly invests in our seed program. In this circumstance, EQH is not considered a related party for our consolidation analysis
because AB does not have a direct variable interest in EQH.
For those entities in which we have a variable interest, we perform an analysis to determine whether the entity is a VIE by
considering whether the entity’s equity investment at risk is insufficient, whether the investors lack decision making rights
proportional to their ownership percentage of the entity, and whether the investors lack the obligation to absorb an entity’s
expected losses or the right to receive an entity’s expected income.
A VIE must be consolidated by its primary beneficiary, which generally is defined as the party that has a controlling financial
interest in the VIE. We are deemed to have a controlling financial interest in a VIE if we have (i) the power to direct the activities
of the VIE that most significantly affect the VIE's economic performance and (ii) the obligation to absorb losses of the VIE or
the right to receive income from the VIE that could potentially be significant to the VIE. For purposes of evaluating (ii) above,
fees paid to us as a decision maker or service provider are excluded if the amount of fees is commensurate with the level of
effort required to be performed and the arrangement includes only customary terms, conditions or amounts present in
arrangements for similar services negotiated at arm’s length. The primary beneficiary evaluation generally is performed
qualitatively based on all facts and circumstances, as well as quantitatively, as appropriate.
If we have a variable interest in an entity that is determined not to be a VIE, the entity is then evaluated for consolidation under
the VOE model. For limited partnerships and similar entities, we are deemed to have a controlling financial interest in a VOE,
and would be required to consolidate the entity, if we own a majority of the entity’s kick-out rights through voting limited
partnership interests and limited partners do not hold substantive participating rights (or other rights that would indicate that
we do not control the entity). For entities other than limited partnerships, we are deemed to have a controlling financial interest
in a VOE if we own a majority voting interest in the entity.
The analysis performed regarding the determination of variable interests held, whether entities are VIEs or VOEs, and whether
we have a controlling financial interest in such entities, requires the exercise of judgment. The analysis is updated continuously
as circumstances change or new entities are formed.
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, demand deposits, money market accounts, overnight commercial paper and
highly liquid investments with original maturities of three months or less. Due to the short-term nature of these instruments, the
recorded value has been determined to approximate fair value (and considered Level 1 securities in the fair value hierarchy).
Fees Receivable, Net
Fees receivable are shown net of allowances. An allowance for doubtful accounts related to investment advisory and services
fees is determined through an analysis of the aging of receivables, assessments of collectability based on historical trends and
other qualitative and quantitative factors, including our relationship with the client, the financial health (or ability to pay) of the
client, current economic conditions and whether the account is active or closed. The allowance for doubtful accounts is not
material to fees receivable.
Brokerage Transactions
Customers’ securities transactions are recorded on a settlement date basis, with related commission income and expenses
reported on a trade date basis. Receivables from and payables to clients include amounts due on cash and margin
transactions. Securities owned by customers are held as collateral for receivables; such collateral is not reflected in the
consolidated financial statements. We have the ability by contract or custom to sell or re-pledge this collateral and have done
2023 Annual Report
89
Part II
so at various times. As of December 31, 2023 and 2022, we had $122.4 million and $267.1 million of re-pledged securities,
respectively. Principal securities transactions and related expenses are recorded on a trade date basis.
Securities borrowed and securities loaned by our broker-dealer subsidiaries are recorded at the amount of cash collateral
advanced or received in connection with the transaction and are included in receivables from and payables to brokers and
dealers in the consolidated statements of financial condition. Securities borrowed transactions require us to deposit cash
collateral with the lender. With respect to securities loaned, we receive cash collateral from the borrower. See Note 8 Offsff etting
Assets and Liabilities for securities borrowed and loaned amounts recorded in our consolidated statements of financial
condition as of December 31, 2023 and 2022. The initial collateral advanced or received approximates or is greater than the fair
value of securities borrowed or loaned. We monitor the fair value of the securities borrowed and loaned on a daily basis and
request additional collateral or return excess collateral, as appropriate. As of December 31, 2023 and 2022, there is no
allowance provision required for the collateral advanced. Income or expense is recognized over the life of the transaction.
Cash on deposit with clearing organizations for trade purposes is reported in assets held for sale on the consolidated
statement of financial condition as of December 31, 2023 and December 31, 2022, respectively. As of December 31, 2023 and
2022, we held no U.S. Treasury bills pledged as collateral. These clearing organizations have the ability by contract or custom
to sell or re-pledge the collateral, if any.
Current Expected Credit Losses- Receivables from Brokerage clients
Receivables from clients primarily consists of margin loan balances. The value of the securities owned by clients and held as
collateral for these receivables is not reflected in the consolidated financial statements and the collateral was not repledged as
of December 31, 2023 and 2022. We consider these financing receivables to be of good credit quality because these
receivables are primarily collateralized by the related client investments.
To estimate expected credit losses on margin loans, we applied the collateral maintenance practical expedient by comparing
the amortized cost basis of the margin loans with the fair value of the collateral at the reporting date. Margin loans are limited
to a percentage of the total value of the securities held in the client's account against those loans. AB requires, in the event of a
decline in the market value of the securities in a margin account, the client to deposit additional securities or cash so that, at all
times, the value of the securities in the account, at a minimum, cover the loan to the client. As such, AB reasonably expects that
the borrower will be able to continually replenish collateral securing the financial asset and does not expect the fair value of
collateral to fall below the amortized cost basis of the margin loans and, as a result, we consider the credit risk associated with
these receivables to be minimal. In circumstances when a loan becomes undercollateralized and the client fails to deposit
additional securities or cash, AB reserves the right to liquidate the account.
Current Expected Credit Losses - Receivables from Revenue Contracts with Customers
The majority of our revenue receivables are from investment advisory and service fees, and distribution revenues, that are
typically paid out of the client accounts or third-party products consisting of cash and securities. Due to the size of the fees in
relation to the value of the cash and securities in accounts or funds, the account value always exceeds the amortized cost
basis of the receivables, resulting in a remote risk of loss. These receivables have a short duration, generally due within 30-90
days and there is minimal historical evidence of non-payment or market declines that would cause the fair value of the
underlying securities to decline below the amortized cost of the receivables. AB maintains an allowance for credit losses based
upon an estimate of the amount of potential credit losses in existing accounts receivable, as determined from a review of aging
schedules, past due balances, historical collection experience and other specific account data. Once determined uncollectible,
aged balances are written off as credit loss expense. This determination is based on careful analysis of individual receivables
and aging schedules, and generally occurs when the receivable becomes over 360 days past due. Our aged receivables and
amounts written off related to credit losses in any year are not material.
Furniture, Equipment and Leasehold Improvements, Net
Furniture, equipment and leasehold improvements are stated at cost,
less accumulated depreciation and amortization.
Depreciation is recognized on a straight-line basis over the estimated useful lives of eight years for furniture and three to six
years for equipment and software. Leasehold improvements are amortized on a straight-line basis over the lesser of their
estimated useful lives or the terms of the related leases.
Goodwill
Our acquisitions are accounted for under the acquisition method of accounting, where the cost of the acquisition is allocated
on the basis of the estimated fair value of the assets acquired and the liabilities assumed. The excess of the purchase price
over the fair value of identifiable assets acquired, net of liabilities assumed, results in the recognition of goodwill.
As of December 31, 2023, we had goodwill of $3.6 billion on the consolidated statement of financial condition which included
$666.1 million as a result of the CarVal L.P. Investors ("CarVal") acquisition in the third quarter of 2022 ("CarVal acquisition"),
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$2.8 billion as a result of the Sanford C. Bernstein Inc. (“Bernstein”) acquisition in 2000 and $291.9 million in regard to various
smaller acquisitions. Approximately, $159.8 million of goodwill has been classified as assets held for sale on the consolidated
statement of financial condition.
Goodwill is tested annually, as of September 30, for impairment utilizing the market approach where the fair value of the
reporting unit is based on its unadjusted market valuation (AB Units outstanding multiplied by AB Holding's Unit price) and
adjusted market valuations assuming a control premium (when applicable). A goodwill impairment would be the amount by
which a reporting unit's carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The goodwill
impairment test does not include a determination by management of whether a decline in fair value is temporary and it is
important that management's determination of fair value reflect the impact of changing market conditions, including the
severity and anticipated duration of any such changes.
As a part of our goodwill impairment evaluation, management uses the price of a publicly traded AB Holding Unit as a
reasonable starting point for valuing an AB Unit because each represents the same fractional
interest in our underlying
business. Throughout the year, the carrying value of goodwill is also reviewed for impairment if certain events or changes in
circumstances occur and trigger whether an interim impairment test may be required. Such changes in circumstances may
include, but are not limited to, significant transactions including acquisitions or divestitures; a sustained decrease in the price of
an AB Holding Unit or declines in AB’s market capitalization that would suggest that the fair value of the reporting unit is less
than the carrying amount; significant and unanticipated declines in AB’s assets under management or revenues; and/or lower
than expected earnings per unit. Any of these changes in circumstances could suggest the possibility that goodwill is impaired,
but none of these events or circumstances by itself would indicate that it is more likely than not that goodwill is impaired.
Instead, they are merely recognized as triggering events for the consideration of impairment and must be viewed in
combination with any mitigating or positive factors. A holistic evaluation of all events since the most recent quantitative
impairment test must be done to determine whether it is more likely than not that the reporting unit is impaired. As of
September 30, 2023, the impairment test indicated that goodwill was not impaired.
Business Combinations
We account for business combinations using the acquisition method of accounting whereby the identifiable assets and
liabilities of the acquired business, as well as any non-controlling interest in the acquired business, are recorded at their
estimated fair values as of the date that we obtain control of the acquired business. Any purchase consideration in excess of
the estimated fair values of the net assets acquired is recorded as goodwill. Acquisition-related expenses are expensed
as incurred.
Often, as part of the business combination, intangible assets are recorded based on their estimated fair value at the time of
acquisition and primarily relate to acquired investment management contracts. We periodically review indefinite-lived intangible
assets for impairment as events or changes in circumstances indicate that the carrying value may not be recoverable. If the
carrying value exceeds fair value, we perform additional impairment tests to measure the amount of the impairment loss, if any.
During 2023, 2022 and 2021, these expenses included an intangible asset impairment charge of zero, $5.6 million and
$1.0 million, respectively, related to various historical acquisitions.
We periodically enter into contingent payment arrangements in connection with our business combinations.
In these
arrangements, we agree to pay additional consideration to the sellers to the extent that certain performance targets are
achieved. We estimate the fair value of these potential future obligations at the time a business combination is consummated
and record a liability on a discounted basis on our consolidated statement of financial condition. We then accrete the obligation
to its expected payment amount over the measurement period. If our expected payment amount subsequently changes, the
obligation is modified in the current period resulting in a gain or loss. Both gains and losses resulting from changes to expected
payments and the accretion of these obligations to their expected payment amounts are reflected within contingent payment
arrangements in our consolidated statements of income. The CarVal acquisition resulted in the recording of a contingent
consideration payable of $228.9 million if certain performance targets are achieved over a six-year period (see Note 9 Fair Value
and Note 24 Acquisitions and Divestitures)s . As of December 31, 2023 and December 31, 2022, the contingent consideration
payable associated with the CarVal acquisition was $238.5 million and $232.1 million, respectively. During 2023, we recorded
an expense of $28.4 million due to a change in estimate related to the contingent consideration associated with the acquisition
of Autonomous LLC in 2019. The change in estimate was based upon better than expected revenues during the 2023
performance evaluation period. We recorded $14.1 million as contingent payment arrangement expense and $14.3 million as
compensation and benefits expense in the condensed consolidated statement of income. The charges to compensation and
benefits expense are due to certain service conditions and special awards included in the acquisition agreement. During 2023
and 2022, there were no impairments of contingent consideration payable recorded in the consolidated statements of income.
During the fourth quarter of 2021, we recorded an impairment of the contingent consideration payable related to our 2016
acquisition of Ramius Alternative Solutions LLC. of $0.6 million.
Several valuation methods may be used to determine the fair value of assets acquired and liabilities assumed. For intangible
assets, we typically use a method that is a form of the income approach, whereby a forecast of future cash flows attributable to
the asset are discounted to present value using a risk-adjusted discount rate. Similarly for contingent liabilities, we develop a
forecast of future cash flows attributable to the performance objectives that are then discounted to present value using a risk-
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adjusted discount rate. Some of the more significant estimates and assumptions inherent in the income approach include the
amount and timing of projected future cash flows and the discount rate selected to measure the risks inherent in the future
cash flows.
Intangible Assets, Net
Intangible assets consist primarily of costs assigned to acquired investment management contracts based on their estimated
fair value at the time of acquisition, less accumulated amortization. Intangible assets are recognized at fair value and generally
are amortized on a straight-line basis over their estimated useful life ranging from 5 to 20 years.
The CarVal acquisition in the third quarter of 2022 resulted in recording of $303.0 million of finite-lived intangible assets
primarily relating to investment management contracts and investor relationships with useful lives ranging from 5 to 10 years
(see Note 24 Acquisitions and Divestitures).
As of December 31, 2023, intangible assets, net of accumulated amortization, of $264.6 million on the consolidated statement
of financial condition consists of $249.4 million of finite-lived intangible assets subject to amortization and $15.2 million of
indefinite-lived intangible assets not subject to amortization.
As of December 31, 2022, intangible assets, net of accumulated amortization, of $310.2 million on the consolidated statement
of financial condition consisted of $295.0 million of finite-lived intangible assets subject to amortization and $15.2 million of
indefinite-lived intangible assets not subject to amortization in regard to other acquisitions.
The gross carrying amount of finite-lived intangible assets totaled $328.4 million as of December 31, 2023 and $327.9 million
as of December 31, 2022, and accumulated amortization was $79.0 million as of December 31, 2023 and $32.9 million as of
December 31, 2022.
Amortization expense was $46.9 million for 2023, $26.6 million for 2022 and $5.7 million for 2021. Estimated future annual
amortization expense is approximately $46 million annually in years one through three and $25 million in year four and five.
We review indefinite-lived intangible assets for impairment when events or changes in circumstances indicate that the carrying
value may not be recoverable. This test is performed at least annually or as triggering events occur. If the carrying value
exceeds fair value, we perform an impairment assessment to measure the amount of the impairment loss, if any. During the
fourth quarter of 2023 we performed an impairment assessment of our intangible assets. The impairment assessment
indicated that our intangible assets were not impaired. During the fourth quarters of 2022 and 2021, we recorded impairments
of $5.6 million and $1.0 million, related to our 2014 acquisition of CPH Capital and our 2016 acquisition of Ramius Alternative
Solutions LLC, respectively. Due to the loss of acquired investment management contracts during each respective year, the
carrying value of the finite-lived intangible assets exceeded the fair value of the contracts. We determined the fair value of the
contracts using a discounted cash flow model. The impairment charge was recorded in general and administrative expenses in
the consolidated statements of income.
Deferred Sales Commissions, Net
We pay commissions to financial intermediaries in connection with the sale of shares of open-end company-sponsored mutual
funds sold without a front-end sales charge (“back-end load shares”). These commissions are capitalized as deferred sales
commissions and amortized over periods not exceeding one year for U.S. fund shares and four years for Non-U.S. Fund shares,
the periods of time during which deferred sales commissions generally are recovered. We recover these commissions from
distribution services fees received from those funds and from CDSC received from shareholders of those funds upon the
redemption of their shares. CDSC cash recoveries are recorded as reductions of unamortized deferred sales commissions
when received. Since January 31, 2009, our U.S. mutual funds have not offered back-end load shares to new investors.
We periodically review the deferred sales commission asset for impairment as events or changes in circumstances indicate
that the carrying value may not be recoverable. If these factors indicate impairment in value, we compare the carrying value to
the undiscounted cash flows expected to be generated by the asset over its remaining life. If we determine the deferred sales
commission asset is not fully recoverable, the asset will be deemed impaired and a loss will be recorded in the amount by
which the recorded amount of the asset exceeds its estimated fair value. There were no impairment charges recorded during
2023 or 2022.
Leases
We determine if an arrangement is a lease at inception. Both operating and finance leases are included in the right-of-use
(“ROU”) assets and lease liabilities in our consolidated statement of financial condition.
ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to
make lease payments arising from the lease. ROU assets and lease liabilities are recognized at commencement date based on
the present value of lease payments over the lease term. We use our consolidated incremental borrowing rate based on the
information available as of the lease commencement date in determining the present value of lease payments. Our lease terms
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may include options to extend or terminate the lease. These options to extend or terminate are assessed on a lease-by-lease
basis, and the ROU assets and lease liabilities are adjusted when it is reasonably certain that an option will be exercised.
When calculating the measurement of ROU assets and lease liabilities, we utilize the fixed payments associated with the lease
and do not include other variable contractual obligations, such as operating expenses, real estate taxes, cleaning and utilities.
These costs are accounted for as period costs and expensed as incurred.
Additionally, we exclude any intangible assets such as software licensing agreements as stated in ASC 842-10-15-1. These
arrangements will continue to follow the guidance of ASC 350, Intangibles - Goodwill and Other.
Loss Contingencies
With respect to all significant litigation matters, we consider the likelihood of a negative outcome. If we determine the likelihood
of a negative outcome is probable and the amount of the loss can be reasonably estimated, we record an estimated loss for the
expected outcome of the litigation. Any such accruals are adjusted thereafter as appropriate to reflect changed circumstances.
When we are able to do so, we also determine estimates of reasonably possible losses or ranges of reasonably possible losses
for such matters, whether in excess of any related accrued liability or where there is no accrued liability, and we disclose an
estimate of the possible loss or range of losses. However, it is often difficult to predict the outcome or estimate a possible loss
or range of loss because litigation is subject to inherent uncertainties, particularly when plaintiffs allege substantial or
indeterminate damages. Such is particularly the case when the litigation is in its early stages or when the litigation is highly
complex or broad in scope. In these cases, we disclose that we are unable to predict the outcome or estimate a possible loss or
range of loss.
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Part II
Assets and Liabilities Held for Sale
The Company classifies assets and liabilities to be sold (disposal group) as held for sale in the period when all of the applicable
criteria are met, including: (i) management commits to a plan to sell, (ii) the disposal group is available to sell in its present
condition, (iii) there is an active program to locate a buyer, (iv) the disposal group is being actively marketed at a reasonable
price in relation to its fair value, (v) significant changes to the plan to sell are unlikely, and (vi) the sale of the disposal group is
generally probable of being completed within one year. Management performs an assessment of held for sale at least quarterly
or when events or changes in business circumstances indicate that a change in classification may be necessary. Assets and
liabilities held for sale are presented separately within the consolidated statements of financial condition with any adjustments
necessary to measure the disposal group at the lower of its carrying value or fair value less costs to sell. Depreciation of
property, plant and equipment and amortization of intangible and right-of-use assets are not recorded while these assets are
classified as held for sale. For each reporting period the disposal group remains classified as held for sale, the carrying value of
the disposal group is adjusted for subsequent changes in fair value less costs to sell. A loss is recognized for any subsequent
decrease in fair value less costs to sell, while a gain is recognized in any subsequent period for any subsequent increase in fair
value less cost to sell, but not in excess of the cumulative loss previously recognized. If, in any period, the carrying value of the
disposal group exceeds the estimated fair value less costs to sell, a loss is recognized on sale rather than an impairment loss.
Assets and liabilities classified as held for sale on the consolidated statement of financial condition as of December 31, 2023
were $564.8 million and $153.3 million, respectively. Assets and liabilities classified as held for sale as of December 31, 2022
were $551.4 million and $108.0 million, respectively.
Mutual Fund Underwriting Activities
Purchases and sales of shares of company-sponsored mutual funds in connection with the underwriting activities of our
subsidiaries, including related commission income, are recorded on the trade date. Receivables from brokers and dealers for
sale of shares of company-sponsored mutual funds generally are realized within three business days from the trade date, in
conjunction with the settlement of the related payables to company-sponsored mutual funds for share purchases. Distribution
plan and other promotion and servicing payments are recognized as expense when incurred.
Long-term Incentive Compensation Plans
We maintain several unfunded, non-qualified long-term incentive compensation plans, under which we grant annual awards to
employees, generally in the fourth quarter, and to members of the Board of Directors of the General Partner, who are not
employed by our company or by any of our affiliates ("Eligible Directors").
Awards granted in December 2023, 2022 and 2021 allowed employees to allocate their awards between restricted AB Holding
Units and deferred cash. Participants (except certain members of senior management) generally could allocate up to 50% of
their awards to deferred cash, not to exceed a total of $250,000 per award. Each of our employees based outside of the United
States (other than expatriates), who received an award of $100,000 or less, could have allocated 100% of their award to
deferred cash. The number of AB Holding Units awarded was based on the closing price of an AB Holding Unit on the date as of
which the awards were approved by the Compensation and Workplace Practices Committee (the "Compensation Committee")
of the Board of Directors (the "Board"). For awards granted in 2023, 2022 and 2021:
• We engaged in open-market purchases of AB Holding Units or purchase newly issued AB Holding Units from AB Holding that
are awarded to participants and keep them in a consolidated rabbi trust.
• Quarterly distributions on vested and unvested AB Holding Units were paid to participants, regardless of whether or not a
long-term deferral election had been made.
•
Interest on deferred cash was accrued monthly based on our monthly weighted average cost of funds.
We recognize compensation expense related to equity compensation grants in the financial statements using the fair value
method. Fair value of restricted AB Holding Unit awards is the closing price of an AB Holding Unit on the grant date; fair value of
options is determined using the Black-Scholes option valuation model. Under the fair value method, compensatory expense is
measured at the grant date based on the estimated fair value of the award and is recognized over the required service period.
For year-end long-term incentive compensation awards, employees who resign or are terminated without cause may retain their
awards, provided the employee remains in compliance with certain agreements and covenants set forth in the applicable award
agreement, including the imposition of forfeiture as a result of post-employment competition, prohibitions on employee and
client solicitation, and a potential claw-back for failing to follow existing risk management policies. Because there is no service
requirement, we fully expense these awards on the grant date. Most equity replacement, sign-on or similar deferred
compensation awards included in separate employment agreements or arrangements include a required service period.
Regardless of whether the award agreement includes employee service requirements, AB Holding Units are typically delivered
to employees ratably over three years to four years, unless the employee has made a long-term deferral election.
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Grants of restricted AB Holding Units can be awarded to Eligible Directors. Generally, these restricted AB Holding Units vest
ratably over three years. These restricted AB Holding Units are not forfeitable (except if the Eligible Director is terminated for
“Cause,” as that term is defined in the applicable award agreement). We fully expense these awards on grant date, as there is
no service requirement.
We fund our restricted AB Holding Unit awards either by purchasing AB Holding Units on the open market or purchasing
newly-issued AB Holding Units from AB Holding, and then keeping these AB Holding Units in a consolidated rabbi trust until
delivering them or retiring them. In accordance with the Amended and Restated Agreement of Limited Partnership of AB (“AB”),
when AB purchases newly-issued AB Holding Units from AB Holding, AB Holding is required to use the proceeds it receives
from AB to purchase the equivalent number of newly issued AB Units, thus increasing its percentage ownership interest in AB.
AB Holding Units held in the consolidated rabbi trust are corporate assets in the name of the trust and are available to the
general creditors of AB.
Repurchases of AB Holding Units for the years ended December 31, 2023 and 2022 consisted of the following:
Total amount of AB Holding Units Purchased(1)
Total Cash Paid for AB Holding Units Purchased(1)
Open Market Purchases of AB Holding Units Purchased(1)
Total Cash Paid for Open Market Purchases of AB Holding Units(1)
Years Ended December 31
2023
2022
(in millions)
4.7
144.4
2.0
62.6
$
$
5.2
211.8
2.3
92.7
$
$
(1) Purchased on a trade date basis. The difference between open-market purchases and units retained reflects the retention of AB Holding
Units from employees to fulfill statutory tax withholding requirements at the time of delivery of long-term incentive compensation awards.
Each quarter, we consider whether to implement a plan to repurchase AB Holding Units pursuant to Rules 10b5-1 and 10b-18
under the Securities Exchange Act of 1934, as amended (“Exchange Act”). A plan of this type allows a company to repurchase
its shares at times when it otherwise might be prevented from doing so because of self-imposed trading blackout periods or
because it possesses material non-public information. Each broker we select has the authority to repurchase AB Holding Units
on our behalf in accordance with the terms and limitations specified in the plan. Repurchases are subject to regulations
promulgated by the SEC as well as certain price, market volume and timing constraints specified in the plan. There was no plan
adopted during the fourth quarter of 2023. We may adopt additional plans in the future to engage in open-market purchases of
AB Holding Units to help fund anticipated obligations under our incentive compensation award program and for other
corporate purposes.
During 2023, we granted to employees and Eligible Directors 5.6 million restricted AB Holding Units (including 5.0 million
granted in December for 2023 year-end awards to employees). During 2022, we granted to employees and Eligible Directors 4.7
million restricted AB Holding Units (including 3.8 million granted in December for 2022 year-end awards to employees). We
used AB Holding Units repurchased during the periods and newly-issued AB Holding Units to fund these awards.
During 2023 and 2022, AB Holding issued zero and 5,774 AB Holding Units, respectively, upon exercise of options to buy AB
Holding Units. AB Holding used the proceeds of zero and $0.2 million, respectively, received from award recipients as payment
in cash for the exercise price to purchase the equivalent number of newly issued AB Units.
Foreign Currency Translation and Transactions
Assets and liabilities of foreign subsidiaries are translated from functional currencies into United States dollars (“US$”) at
exchange rates in effect at the balance sheet dates, and related revenues and expenses are translated into US$ at average
exchange rates in effect during each period. Net foreign currency gains and losses resulting from the translation of assets and
liabilities of foreign operations into US$ are reported as a separate component of other comprehensive income in the
consolidated statements of comprehensive income. Net foreign currency transaction losses were $4.5 million, $10.2 million
and $8.5 million for 2023, 2022 and 2021, respectively, and are reported in general and administrative expenses on the
consolidated statements of income.
Cash Distributions
AB is required to distribute all of its Available Cash Flow, as defined in the AB Partnership Agreement, to its Unitholders and to
the General Partner. Available Cash Flow can be summarized as the cash flow received by AB from operations minus such
amounts as the General Partner determines, in its sole discretion, should be retained by AB for use in its business, or plus such
amounts as the General Partner determines, in its sole discretion, should be released from previously retained cash flow.
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Typically, Available Cash Flow has been the adjusted diluted net income per unit for the quarter multiplied by the number of
general and limited partnership interests at the end of the quarter. In future periods, management anticipates that Available
Cash Flow will be based on adjusted diluted net income per unit, unless management determines, with the concurrence of the
Board, that one or more adjustments that are made for adjusted net income should not be made with respect to the Available
Cash Flow calculation.
On February 6, 2024, the General Partner declared a distribution of $0.85 per AB Unit, representing a distribution of Available
Cash Flow for the three months ended December 31, 2023. The General Partner, as a result of its 1.0% general partnership
interest, is entitled to receive 1.0% of each distribution. The distribution is payable on March 14, 2024 to holders of record on
February 20, 2024.
Total cash distributions per Unit paid to the General Partner and Unitholders during 2023, 2022 and 2021 were $2.92, $3.87 and
$3.86, respectively.
Comprehensive Income
We report all changes in comprehensive income in the consolidated statements of comprehensive income. Comprehensive
income includes net income, as well as foreign currency translation adjustments, actuarial gains (losses) and prior service cost.
Deferred taxes were not recognized on foreign currency translation adjustments for foreign subsidiaries which had earnings
that were considered permanently invested outside the United States.
Subsequent Events
We evaluate subsequent events through the date that these financial statements are filed with the SEC.
We entered into a lease that commenced in January 2024, relating to approximately 166,000 square feet of space in New York
City. Our estimated total base rent obligation (excluding taxes, operating expenses and utilities) over the 20-year lease term is
approximately $393.0 million.
No other subsequent events were identified through the date these financials statements were filed with the SEC.
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3. Revenue Recognition
Revenues for the years ended December 31, 2023, 2022 and 2021 consisted of the following:
Part II
Subject to contracts with customers:
Investment advisory and services fees
Base fees
Performance-based fees
Bernstein research services
Distribution revenues
All-in-management fees
12b-1 fees
Other distribution fees
Other revenues
Shareholder servicing fees
Other
Not subject to contracts with customers:
Dividend and interest income, net of interest expense
Investment gains (losses)
Other revenues
Total net revenues
4. Net Income Per Unit
Years Ended December 31
2023
2022
2021
(in thousands)
$ 2,830,557
$ 2,825,791
$ 2,949,405
144,911
386,142
284,057
63,127
239,079
83,802
17,061
145,247
416,273
290,740
69,041
247,414
86,661
18,120
245,119
452,017
350,674
83,920
217,646
90,225
16,034
4,048,736
4,099,287
4,405,040
91,902
14,206
479
56,653
(102,413)
763
106,587
(44,997)
35,048
(636)
2,150
36,562
$ 4,155,323
$ 4,054,290
$ 4,441,602
Basic net income per unit is derived by reducing net income for the 1.0% general partnership interest and dividing the remaining
99.0% by the basic weighted average number of limited partnership units outstanding for each year. Diluted net income per unit
is derived by reducing net income for the 1.0% general partnership interest and dividing the remaining 99.0% by the total of the
diluted weighted average number of limited partnership units outstanding for each year.
Net income attributable to AB Unitholders
Weighted average units outstanding—basic
Years Ended December 31
2023
2022
2021
(in thousands, except per unit amounts)
$ 764,610
$ 831,813
$ 1,148,623
285,125
273,943
271,729
Dilutive effect of compensatory options to buy AB Holding Units
—
1
11
Weighted average units outstanding—diluted
Basic net income per AB Unit
Diluted net income per AB Unit
285,125
273,944
271,740
$
$
2.65
2.65
$
$
3.01
3.01
$
$
4.18
4.18
There were no anti-dilutive options excluded from diluted net income in 2023, 2022 and 2021.
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Part II
5. Cash and Securities Segregated Under Federal Regulations and
Other Requirements
of December 31, 2023 and 2022, $0.9 billion and $1.5 billion, respectively, of U.S. Treasury Bills were segregated in a special
reserve bank custody account for the exclusive benefit of our brokerage customers under Rule 15c3-3 of the Exchange Act.
6. Investments
Investments consist of:
Equity securities:
Long-term incentive compensation-related
Seed capital
Investments in limited partnership hedge funds:
Long-term incentive compensation-related
Seed capital
Time deposits
Other
Total investments
Years Ended December 31
2023
2022
(in thousands)
$
18,882
$
21,055
128,771
138,012
21,151
57,624
6,517
10,609
26,815
15,711
7,750
8,175
$ 243,554
$ 217,518
Total investments related to long-term incentive compensation obligations of $40.0 million and $47.9 million as of December
31, 2023 and 2022, respectively, consist of company-sponsored mutual funds and hedge funds. For long-term incentive
compensation awards granted before 2009, we typically made investments in company-sponsored mutual funds and hedge
funds that were notionally elected by plan participants and maintained them (and continue to maintain them) in a consolidated
rabbi trust or separate custodial account. The rabbi trust and custodial account enable us to hold such investments separate
from our other assets for the purpose of settling our obligations to participants. The investments held in the rabbi trust and
custodial account remain available to the general creditors of AB.
The underlying investments of hedge funds in which we invest include long and short positions in equity securities, fixed
income securities (including various agency and non-agency asset-based securities), currencies, commodities and derivatives
(including various swaps and forward contracts). These investments are valued at quoted market prices or, where quoted
market prices are not available, are fair valued based on the pricing policies and procedures of the underlying funds.
We allocate seed capital to our investment teams to help develop new products and services for our clients. A portion of our
seed capital trading investments are equity and fixed income products, primarily in the form of separately managed account
portfolios, U.S. mutual funds, Luxembourg funds, Japanese investment trust management funds or Delaware business trusts.
We also may allocate seed capital to investments in private equity funds. Regarding our seed capital investments, the amounts
above reflect those funds in which we are not the primary beneficiary of a VIE or hold a controlling financial interest in a VOE.
See Note 15, Consolidated Company-Sponsored Investment Funds, for a description of the seed capital investments that we
consolidated. As of December 31, 2023 and 2022, our total seed capital investments were $394.2 million and $309.6 million,
respectively. Seed capital investments in unconsolidated company-sponsored investment funds are valued using published net
asset values or non-published net asset values if they are not listed on an active exchange but have net asset values that are
comparable to funds with published net asset values and have no redemption restrictions.
In addition, we also have long positions in corporate equities and long exchange-traded options traded through our
options desk.
The portion of unrealized gains (losses) related to equity securities, as defined by ASC 321-10, held as of December 31, 2023
and 2022 were as follows:
Net gains (losses) recognized during the period
Less: net gains recognized during the period on equity securities sold during the period
Unrealized gains (losses) recognized during the period on equity securities held
98
AllianceBernstein
Years Ended December 31
2023
2022
(in thousands)
$
$
14,372
$ (23,855)
6,132
8,240
17,960
$ (41,815)
Part II
7. Derivative Instruments
See Note 15 Consolidated Company-Sponsored Investment Funds for disclosure of derivative instruments held by our
consolidated company-sponsored investment funds.
We enter into various futures, forwards, options and swaps to economically hedge certain seed capital investments. Also, we
have currency forwards that help us to economically hedge certain balance sheet exposures. In addition, our options desk
trades long and short exchange-traded equity options. We do not hold any derivatives designated in a formal hedge relationship
under ASC 815-10, Derivatives and Hedging.
The notional value, fair value and gains and losses recognized in investment gains (losses) as of December 31, 2023 and 2022
for derivative instruments (excluding derivative instruments relating to our options desk trading activities discussed below)w not
designated as hedging instruments were as follows:
December 31, 2023
Exchange-traded futures
Currency forwards
Interest rate swaps
Credit default swaps
Total return swaps
Option swaps
Total derivatives
December 31, 2022
Exchange-traded futures
Currency forwards
Interest rate swaps
Credit default swaps
Total return swaps
Option swaps
Total derivatives
Notional
Value
Derivative
Assets
Derivative
Liabilities
Gains
(Losses)
(in thousands)
$ 116,344
$
1
$
34,440
11,345
139,607
95,021
50,232
$ 446,989
$ 154,687
$
$
34,597
16,847
225,671
28,742
50,000
4,951
294
9,265
6
1
14,518
1,768
4,446
386
17,507
605
—
$
$
3,511
5,597
349
4,197
4,391
135
$
(2,038)
(82)
110
(6,850)
(5,443)
(2,107)
18,180
$ (16,410)
162
$
19,994
5,047
262
7,302
933
6
1,965
70
(1,000)
14,828
5,211
$ 510,544
$
24,712
$
13,712
$
41,068
As of December 31, 2023 and 2022, the derivative assets and liabilities are included in both receivables and payables to brokers
and dealers on our consolidated statements of financial condition. Gains and losses on derivative instruments are reported in
investment gains (losses) on the consolidated statements of income.
We may be exposed to credit-related losses in the event of non-performance by counterparties to derivative financial
instruments. We minimize our counterparty exposure through a credit review and approval process. In addition, we have
executed various collateral arrangements with counterparties to the over-the-counter derivative transactions that require both
pledging and accepting collateral in the form of cash and U.S. Treasuries. As of December 31, 2023 and 2022, we held $5.7
million and $8.4 million, respectively, of cash collateral payable to trade counterparties. This obligation to return cash is
reported in payables to brokers and dealers in our consolidated statements of financial condition.
Although notional amount is the typical measure of volume in the derivatives market, it is not used as a measure of credit risk.
Generally, the current credit exposure of our derivative contracts is limited to the net positive estimated fair value of derivative
contracts at the reporting date after taking into consideration the existence of netting agreements and any collateral received. A
derivative with positive value (a derivative asset) indicates existence of credit risk because the counterparty would owe us if the
contract were closed. Alternatively, a derivative contract with negative value (a derivative liability) indicates we would owe
money to the counterparty if the contract were closed. Generally, if there is more than one derivative transaction with a single
counterparty, a master netting arrangement exists with respect to derivative transactions with that counterparty to provide for
aggregate net settlement.
Our standardized contracts for over-the-counter derivative transactions, known as ISDA master agreements, provide for
collateralization. As of December 31, 2023 and 2022, we delivered $7.8 million and $4.2 million, respectively, of cash collateral
into brokerage accounts. We report this cash collateral in cash and cash equivalents in our consolidated statements of
financial condition.
2023 Annual Report
99
Part II
As of December 31, 2023 and 2022, long and short exchange-traded equity options were classified as held for sale on our
consolidated statement of financial position. For further discussion, see Note 24 Acquisitions and Divestitures.
Our options desk provides our clients with equity derivative strategies and execution for exchange-traded options on single
stocks, exchange-traded funds and indices. While predominately agency-based, the options desk may commit capital to
facilitate a client's transaction. Our options desk hedges the risk associated with this activity by taking offsetting positions in
equities. For the year ended December 31, 2023 and 2022, we recognized $4.9 million and $22.1 million of losses on equity
options activity, respectively. These losses are recognized in investment gains (losses) in the consolidated statements
of income.
8. Offsetting Assets and Liabilities
See Note 15,55 Consolidated Company-Sponsored Investment Funds, for disclosure of offsetting assets and liabilities of our
consolidated company-sponsored investment funds.
Offsetting of assets as of December 31, 2023 and 2022 was as follows:
Gross
Amounts
Offset in the
Statement
of Financial
Condition
Gross
Amounts of
Recognized
Assets
Net
Amounts of
Assets
Presented in
the
Statement of
Financial
Condition
Financial
Instruments
Collateral
Cash
Collateral
Received
December 31, 2023
Securities borrowed
rivatives
December 31, 2022
Securities borrowed
Derivatives
$
23,229
$
14,518
$
62,063
$
24,712
—
—
—
—
(in thousands)
$
23,229
$ (23,229)
$
—
$
14,518
—
(5,691)
Net
Amount
—
8,827
$
62,063
$ (62,058)
$
—
$
5
24,712
—
(8,361)
16,351
Offsetting of liabilities as of December 31, 2023 and 2022 was as follows:
Gross
Amounts
Offset in the
Statement
of
Financial
Condition
Net
Amounts
of Liabilities
Presented in
the
Statement
of Financial
Condition
Gross
Amounts of
Recognized
Liabilities
Financial
Instruments
Collateral
Cash
Collateral
Pledged
Net
Amount
n thousands)
$ 125,101
$
18,180
$ 272,580
$
13,712
—
—
—
—
$ 125,101
$ (122,369)
$
—
$
2,732
18,180
—
(7,795)
10,385
$ 272,580
$ (267,053)
$
—
$
13,712
—
(4,158)
5,527
9,554
December 31, 2023
Securities loaned
Derivatives
December 31, 2022
Securities loaned
Derivatives
Cash collateral, whether pledged or received on derivative instruments, is not considered material and, accordingly, is not
disclosed by counterparty.
100
AllianceBernstein
Part II
9. Fair Value
See Note 15, Consolidated Company-Sponsored Investment Funds,
company-sponsored investment funds.
for disclosure of
fair value of our consolidated
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the “exit price”) in an
orderly transaction between market participants at the measurement date. The three broad levels of fair value hierarchy are
as follows:
• Level 1—Quoted prices in active markets are available for identical assets or liabilities as of the reported date.
• Level 2—Quoted prices in markets that are not active or other pricing inputs that are either directly or indirectly observable as
of the reported date.
• Level 3—Prices or valuation techniques that are both significant to the fair value measurement and unobservable as of the
reported date. These financial instruments do not have two-way markets and are measured using management’s best
estimate of fair value, where the inputs into the determination of fair value require significant management judgment
or estimation.
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Valuation of our financial instruments by pricing observability levels as of December 31, 2023 and 2022 was as follows
(in thousands):
December 31, 2023
Money markets
Securities segregated (U.S. Treasury Bills)
Derivatives
Investments:
Equity securities
Limited partnership hedge funds(2)
Time deposits(3)
Other investments
Total investments
Total assets measured at fair value
Derivatives
Contingent payment arrangements
Total liabilities measured at fair value
cember 31, 2022:
Money markets
Securities segregated (U.S. Treasury Bills)
Derivatives
Investments:
Equity securities
Limited partnership hedge funds(2)
Time deposits(3)
Other investments
Total investments
Total assets measured at fair value
Derivatives
Contingent payment arrangements
Total liabilities measured at fair value
Level 1
Level 2
Level 3
NAV
Expedient(1)
Other
Total
$ 146,906
—
1
113,833
—
—
7,870
121,703
$ 268,610
3,511
—
3,511
$
$
95,521
—
1,768
129,655
—
—
6,689
136,344
$ 233,633
162
—
162
$
$
— $
867,679
14,517
— $
—
—
— $
—
—
— $ 146,906
867,679
—
14,518
—
32,104
—
—
—
32,104
$ 914,300
14,669
—
14,669
$
118
—
—
—
118
118
—
252,690
$ 252,690
$
$
$
1,598
—
—
—
1,598
1,598
—
—
— $
147,653
—
78,775
78,775
6,517
6,517
10,609
2,739
243,554
88,031
$1,272,657
$ 88,031
18,180
—
—
252,690
— $ 270,870
$
— $
1,521,705
22,944
— $
—
—
— $
—
—
— $
—
—
95,521
1,521,705
24,712
27,799
—
—
—
27,799
$1,572,448
13,550
—
13,550
$
129
—
—
—
129
129
—
247,309
$ 247,309
$
$
$
1,484
—
—
—
1,484
1,484
—
—
— $
159,067
—
42,526
42,526
7,750
7,750
8,175
1,486
217,518
51,762
$1,859,456
$ 51,762
13,712
—
247,309
—
— $ 261,021
(1)
(2)
(3)
Investments measured at fair value using NAV (or its equivalent) as a practical expedient.
Investments in equity method investees that are not measured at fair value in accordance with GAAP.
Investments carried at amortized cost that are not measured at fair value in accordance with GAAP.
2023 Annual Report
101
Part II
Other investments included in Level 1 of the fair value hierarchy include our investment in a mutual fund measured at fair value
($7.9 million and $6.7 million as of December 31, 2023 and 2022, respectively). Other investments not measured at fair value
include (i) investment in start-up company that does not have a readily available fair value (this investment was $0.3 million as
of December 31, 2023 and 2022) and (ii) broker-dealer exchange memberships that are not measured at fair value in
accordance with GAAP ($2.4 million and $1.2 million as of December 31, 2023 and 2022, respectively).
We provide below a description of the fair value methodologies used for instruments measured at fair value, as well as the
general classification of such instruments pursuant to the valuation hierarchy:
• Money marketkk s:tt We invest excess cash in various money market funds that are valued based on quoted prices in active
markets; these are included in Level 1 of the valuation hierarchy.
• Treasury Bills: We hold U.S. Treasury Bills, which are primarily segregated in a special reserve bank custody account as
required by Rule 15c3-3 of the Exchange Act. These securities are valued based on quoted yields in secondary markets and
are included in Level 2 of the valuation hierarchy.
• Equity securities: Our equity securities consist principally of company-sponsored mutual funds with NAVs and various
separately managed portfolios consisting primarily of equity and fixed income mutual funds with quoted prices in active
markets, which are included in Level 1 of the valuation hierarchy. In addition, some securities are valued based on observable
inputs from recognized pricing vendors, which are included in Level 2 of the valuation hierarchy.
• Derivatives: We hold exchange-traded futures with counterparties that are included in Level 1 of the valuation hierarchy. In
addition, we also hold currency forward contracts, interest rate swaps, credit default swaps, option swaps and total return
swaps with counterparties that are valued based on observable inputs from recognized pricing vendors, which are included
in Level 2 of the valuation hierarchy.
• Contintt gent payment arrarr ngements: Contingent payment arrangements relate to contingent payment liabilities associated
with various acquisitions. At each reporting date, we estimate the fair values of the contingent consideration expected to be
paid upon probability-weighted AUM and revenue projections, using unobservable market data inputs, which are included in
Level 3 of the valuation hierarchy.
During the years ended December 31, 2023 and 2022, there were no transfers between Level 2 and Level 3 securities.
The change in carrying value associated with Level 3 financial instruments carried at fair value, classified as equity securities, is
as follows:
Balance as of beginning of period
Purchases
Sales
Realized gains (losses), net
Unrealized (losses) gains, net
Balance as of end of period
December 31
2023
2022
(in thousands)
$
129
$
126
—
—
—
(11)
—
—
—
3
$
118
$
129
Realized and unrealized gains and losses on Level 3 financial instruments are recorded in investment gains and losses in the
consolidated statements of income.
102
AllianceBernstein
Our acquisitions may include contingent consideration arrangements as part of the purchase price. The change in carrying
value associated with Level 3 financial instruments carried at fair value, classified as contingent payment arrangements, is
as follows:
Part II
Balance as of beginning of period
Addition
Accretion
Changes in estimates(1)
Payments
Held for sale reclassification(1)
Balance as of end of period
December 31
2023
2022
(in thousands)
$ 247,309
$
38,260
—
231,385
8,803
14,050
(1,291)
(16,181)
6,563
—
—
(28,899)
$ 252,690
$ 247,309
(1)
During 2023, we recorded a $14.1 million change in estimate associated with the acquisition of Autonomous LLC which is included in held for sale liabilities on
the condensed consolidated statement of financial condition.
As of December 31, 2023, the expected revenue growth rates range from 2.0% to 83.9%, with a weighted average of 10.3%,
calculated using cumulative revenues and range of revenue growth rates. The discount rates ranged from 1.9% to 10.4%, with a
weighted average of 4.6%, calculated using total contingent liabilities and range of discount rates.
In the third quarter of 2022, we acquired CarVal and recorded a contingent consideration liability of $228.9 million (see Note 24
Acquisitions and Divestitures). The liability, ranging from zero to $650.0 million,
is based on CarVal achieving certain
performance objectives over a six-year period ending December 31, 2027. The liability was valued using a forecast of future
cash flows attributable to the performance objectives that are discounted to present value using a risk-adjusted discount rate.
The expected revenue growth rates range from 3.9% to 31.5%, with a weighted average of 14.1%, calculated using cumulative
revenues and range of revenue growth rates. The discount rates range from 4.1% to 4.6%, with a weighted average of 4.2%,
calculated using total contingent liabilities and range of discount rates.
As of December 31, 2022, including the CarVal acquisition, the expected revenue growth rates range from 2.0% to 83.9%, with a
weighted average of 11.5%, calculated using cumulative revenues and range of revenue growth rates (excluding revenue growth
from additional AUM contributed in year of acquisition). The discount rates ranged from 1.9% to 10.4%, with a weighted average
of 4.5%, calculated using total contingent liabilities and range of discount rates.
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
We did not have any material assets or liabilities that were measured at fair value for impairment on a nonrecurring basis during
the years ended December 31, 2023 or 2022.
10. Furniture, Equipment and Leasehold Improvements, Net
Furniture, equipment and leasehold improvements, net consist of:
Furniture and equipment (1)
Leasehold improvements (1)
Total (1)
Less: Accumulated depreciation and amortization (1)
Furniture, equipment and leasehold improvements, net (1)
Years Ended December 31
2023
2022
(in thousands)
$ 168,415
$ 605,567
326,131
494,546
323,982
929,549
(318,198)
(740,291)
$ 176,348
$ 189,258
(1) During the fourth quarter of 2023 we wrote off approximately $461.7 million in fully depreciated assets.
Depreciation and amortization expense on furniture, equipment and leasehold improvements were $44.9 million, $39.7 million
and $38.8 million for the years ended December 31, 2023, 2022 and 2021, respectively.
2023 Annual Report
103
Part II
11. Deferred Sales Commissions, Net
The components of deferred sales commissions, net, for the years ended December 31, 2023 and 2022 were as follows
(excluding amounts related to fully amortized deferred sales commissions):
Carrying amount of deferred sales commissions
Less: Accumulated amortization
Cumulative CDSC received
Deferred sales commissions, net
Years Ended December 31
2023
2022
(in thousands)
$ 187,870
$ 172,181
(66,899)
(33,597)
(66,184)
(53,747)
$
87,374
$
52,250
Amortization expense associated with deferred sales commissions was $36.8 million, $34.8 million and $34.4 million for the
years ended December 31, 2023, 2022 and 2021, respectively.
Estimated future amortization expense related to the December 31, 2023 net asset balance, assuming no additional CDSC is
received in future periods, is as follows (in thousands):
2024
2025
2026
2027
Total
12. Debt
Credit Facility
$
39,894
28,979
16,997
1,504
$
87,374
AB has an $800.0 million committed, unsecured senior revolving credit facility (the "Credit Facility") with a group of commercial
banks and other lenders, which matures on October 13, 2026. The Credit Facility was amended and restated on February 9,
2023, to reflect the transition from US LIBOR, which was retired June 30, 2023, to the term Secured Overnight Financial Rate
("SOFR"). Other than this immaterial change, there were no other significant changes included in the amendment. The Credit
Facility provides for possible increases in the principal amount by up to an aggregate incremental amount of $200.0 million; any
such increase is subject to the consent of the affected lenders. The Credit Facility is available for AB and Sanford C. Bernstein &
Co., LLC ("SCB LLC") business purposes, including the support of AB’s commercial paper program. Both AB and SCB LLC can
draw directly under the Credit Facility and management may draw on the Credit Facility from time to time. AB has agreed to
guarantee the obligations of SCB LLC under the Credit Facility.
The Credit Facility contains affirmative, negative and financial covenants, which are customary for facilities of this type,
including restrictions on dispositions of assets, restrictions on liens, a minimum interest coverage ratio and a maximum
leverage ratio. As of December 31, 2023, we were in compliance with these covenants. The Credit Facility also includes
customary events of default (with customary grace periods, as applicable),
including provisions under which, upon the
occurrence of an event of default, all outstanding loans may be accelerated and/or lender’s commitments may be terminated.
Also, under such provisions, upon the occurrence of certain insolvency- or bankruptcy-related events of default, all amounts
payable under the Credit Facility would automatically become immediately due and payable, and the lender’s commitments
automatically would terminate.
Amounts under the Credit Facility may be borrowed, repaid and re-borrowed by us from time to time until the maturity of the
facility. Voluntary prepayments and commitment reductions requested by us are permitted at any time without a fee (other than
customary breakage costs relating to the prepayment of any drawn loans) upon proper notice and subject to a minimum dollar
requirement. Borrowings under the Credit Facility bear interest at a rate per annum, which will be, at our option, a rate equal to
an applicable margin, which is subject to adjustment based on the credit ratings of AB, plus one of the following indices: SOFR;
a Prime rate; or the Federal Funds rate.
As of December 31, 2023 and 2022, we had no amounts outstanding under the Credit Facility. During 2023 and 2022, we did not
draw upon the Credit Facility.
104
AllianceBernstein
Part II
EQH Facility
AB also has a $900.0 million committed, unsecured senior credit facility (“EQH Facility”) with EQH. The EQH Facility matures on
November 4, 2024 and is available for AB's general business purposes. Borrowings under the EQH Facility generally bear
interest at a rate per annum based on prevailing overnight commercial paper rates.
The EQH Facility contains affirmative, negative and financial covenants which are substantially similar to those in AB’s
committed bank facilities. As of December 31, 2023, we were in compliance with these covenants. The EQH Facility also
includes customary events of default substantially similar to those in AB’s committed bank facilities, including provisions under
which, upon the occurrence of an event of default, all outstanding loans may be accelerated and/or the lender’s commitment
may be terminated.
Amounts under the EQH Facility may be borrowed, repaid and re-borrowed by us from time to time until the maturity of the
facility. AB or EQH may reduce or terminate the commitment at any time without penalty upon proper notice. EQH also may
terminate the facility immediately upon a change of control of our general partner.
As of both December 31, 2023 and 2022, AB had $900.0 million outstanding under the EQH Facility with interest rates of
approximately 5.3% and 4.3%, respectively. Average daily borrowings on the EQH Facility during 2023 and 2022 were $743.1
million and $655.2 million, respectively, with weighted average interest rates of approximately 4.9% and 1.7%, respectively.
EQH Uncommitted Facility
In addition to the EQH Facility, AB has a $300.0 million uncommitted, unsecured senior credit facility (“EQH Uncommitted
Facility”) with EQH. The EQH Uncommitted Facility matures on September 1, 2024 and is available for AB's general business
purposes. Borrowings under the EQH Unsecured Facility generally bear interest at a rate per annum based on prevailing
overnight commercial paper rates. The EQH Uncommitted Facility contains affirmative, negative and financial covenants which
are substantially similar to those in the EQH Facility. As of December 31, 2023, we were in compliance with these covenants. As
of December 31, 2023, we had no amounts outstanding under the EQH Uncommitted Facility. As of December 31, 2022, we had
$90.0 million outstanding under the EQH Uncommitted Facility with an interest rate of approximately 4.3%. Average daily
borrowings on the EQH Facility during 2023 and 2022 were $3.6 million and $0.7 million, respectively, with weighted average
interest rates of approximately 4.6% and 4.3%, respectively.
Commercial Paper
As of December 31, 2023, we had $254.3 million of commercial paper outstanding with an interest rate of 5.4%. As of
December 31, 2022, we had no commercial paper outstanding. The commercial paper is short term in nature, and as such,
recorded value is estimated to approximate fair value (and considered a Level 2 security in the fair value hierarchy). Average
daily borrowings of commercial paper during 2023 and 2022 were $267.6 million and $189.9 million, respectively, with weighted
average interest rates of approximately 5.2% and 1.5%, respectively.
SCB Lines of Credit
SCB LLC currently has five uncommitted lines of credit with five financial institutions. Four of these lines of credit permit us to
borrow up to an aggregate of approximately $315.0 million, with AB named as an additional borrower, while the other line has
no stated limit. AB has agreed to guarantee the obligations on SCB LLC under these lines of credit. As of December 31, 2023
and 2022, SCB LLC had no outstanding balance on these lines of credit. Average daily borrowings on the lines of credit during
2023 and 2022 were $1.1 million and $1.4 million, respectively, with weighted average interest rates of approximately 7.8% and
3.7%, respectively.
13. Leases
We lease office space, office equipment and technology under various operating and financing leases. Our current leases have
initial lease terms of one year to 15 years, some of which include options to extend the leases for up to seven years, and some
of which include options to terminate the leases within one year.
2023 Annual Report
105
Part II
Leases included in the consolidated statements of financial condition as of December 31, 2023 and 2022 were as follows:
Classification
December 31, 2023
December 31, 2022
(in thousands)
Operating Leases
Operating lease right-of-use assets
Right-of-use assets
$
Operating lease liabilities
Finance Leases
Property and equipment, gross
Amortization of right-of-use assets
Property and equipment, net
Finance lease liabilities
Lease liabilities
Right-of-use assets
Right-of-use assets
Lease liabilities
312,588
357,623
$
360,092
415,539
18,975
(7,797)
11,178
11,394
18,116
(6,310)
11,806
11,940
The components of lease expense included in the consolidated statements of income for the years ended December 31, 2023
and 2022 were as follows:
Operating lease cost
General and administrative
$
94,784
$
97,198
Classification
2023
2022
Years Ended December 31
(in thousands)
Financing lease cost:
Amortization of right-of-use assets
Interest on lease liabilities
Total finance lease cost
Variable lease cost (1)
Sublease income
Net lease cost
General and administrative
Interest expense
General and administrative
General and administrative
4,779
348
5,127
35,525
(33,577)
3,860
200
4,060
40,552
(34,420)
$ 101,859
$ 107,390
(1) Variable lease expense includes operating expenses, real estate taxes and employee parking.
The sublease income represents all revenues received from sub-tenants. It is primarily fixed base rental payments combined
with variable reimbursements such as operating expenses, real estate taxes and employee parking. The vast majority of sub-
tenant income is derived from our New York metro sub-tenant agreements. Sub-tenant income related to base rent is recorded
on a straight-line basis.
Maturities of lease liabilities are as follows:
ar ending December 31,
(in thousands)
Operating Leases Financing Leases
Total
2024
2025
2026
2027
2028
Thereafter
Total lease payments
Less interest
$
108,380
$
42,695
40,568
37,973
31,698
132,647
393,961
(36,338)
$
112,795
46,680
43,122
38,854
31,835
132,647
405,933
4,415
3,985
2,554
881
137
—
11,972
$
(578)
Present value of lease liabilities
$
357,623
$
11,394
106
AllianceBernstein
We have signed a lease that commenced in 2024, relating to approximately 166,000 square feet of space in New York City. Our
estimated total base rent obligation (excluding taxes, operating expenses and utilities) over the 20-year lease term is
approximately $393.0 million.
Part II
Lease term and discount rate:
Weighted average remaining lease term (years):
Operating leases
Finance leases
Weighted average discount rate:
Operating leases
Finance leases
Supplemental non-cash activity related to leases are as follows:
Right-of-use assets obtained in exchange for lease obligations(1):
Operating leases
Finance leases
(1) Represents non-cash activity and, accordingly, is not reflected in the consolidated statements of cash flows.
14. Commitments and Contingencies
Leases
7.34
2.97
2.89%
3.22%
Years Ended December 31
2023
2022
(in thousands)
$
32,407
$
38,875
4,106
7,791
As indicated in Note 13 Leases, we lease office space, office equipment and technology under various leasing arrangements.
The future minimum payments under non-cancelable leases, sublease commitments and related payments we are obligated to
make, net of sublease commitments of third party lessees to make payments to us, as of December 31, 2023, are as follows:
2024
2025
2026
2027
2028
2029 and thereafter
Total future minimum payments
See Note 13 Leases for material lease commitments.
Legal Proceedings
Payments Sublease Receipts
Net Payments
n millions)
$
104.4
$
(31.0)
$
64.6
60.9
56.6
49.6
458.9
795.0
$
0.3
(0.2)
—
—
—
$
(30.9)
$
73.4
64.9
60.7
56.6
49.6
458.9
764.1
With respect to all significant litigation matters, we consider the likelihood of a negative outcome. If we determine the likelihood
of a negative outcome is probable and the amount of the loss can be reasonably estimated, we record an estimated loss for the
expected outcome of the litigation. Any such accruals are adjusted thereafter as appropriate to reflect changed circumstances.
When we are able to do so, we also determine estimates of reasonably possible losses or ranges of reasonably possible losses
for such matters, whether in excess of any related accrued liability or where there is no accrued liability, and we disclose an
estimate of the possible loss or range of losses. However, it is often difficult to predict the outcome or estimate a possible loss
or range of loss because litigation is subject to inherent uncertainties, particularly when plaintiffs allege substantial or
indeterminate damages. Such is particularly the case when the litigation is in its early stages or when the litigation is highly
complex or broad in scope. In these cases, we disclose that we are unable to predict the outcome or estimate a possible loss or
range of loss. As a result of these types of factors, we are unable, at this time, to estimate the losses that are reasonably
possible to be incurred or ranges of such losses with respect to our significant litigation matters.
2023 Annual Report
107
Part II
On December 14, 2022, four individual participants in the Profit Sharing Plan for Employees of AllianceBernstein L.P., (the
"Plan") filed a class action complaint (the “Complaint”) in the U.S. District Court for the Southern District of New York against
AB, current and former members of the Compensation and Workplace Practices Committee of the Board, and the Investment
and Administrative Committees under the Plan. Plaintiffs, who seek to represent a class of all participants in the Plan from
December 14, 2016 to the present, allege that defendants violated their fiduciary duties and engaged in prohibited transactions
under the Employee Retirement Income Security Act of 1974, as amended ("ERISA") by including proprietary collective
investment trusts as investment options offered under the Plan. The Complaint seeks unspecified damages, disgorgement and
other equitable relief. AB is prepared to defend itself vigorously against these claims and filed a motion to dismiss on February
24, 2023. While the ultimate outcome of this matter is currently not determinable given the matter remains in its early stages,
we do not believe this litigation will have a material adverse effect on our results of operations, financial condition or liquidity.
AB may be involved in various other matters, including regulatory inquiries, administrative proceedings and litigation, some of
which may allege significant damages. It is reasonably possible that AB could incur losses pertaining to these other matters,
but management cannot currently estimate any such losses. Management, after consultation with legal counsel, currently
believes that the outcome of any individual matter that is pending or threatened, or all of them combined, will not have a
material adverse effect on our results of operations, financial condition or liquidity. However, any inquiry, proceeding or
litigation has the element of uncertainty; management cannot determine whether further developments relating to any
individual matter that is pending or threatened, or all of them combined, will have a material adverse effect on our results of
operations, financial condition or liquidity in any future reporting period.
15. Consolidated Company-Sponsored Investment Funds
We regularly provide seed capital to new company-sponsored investment funds. As such, we may consolidate or de-
consolidate a variety of company-sponsored investment funds each quarter. Due to the similarity of risks related to our
involvement with each company-sponsored investment fund, disclosures required under the VIE model are aggregated, such as
disclosures regarding the carrying amount and classification of assets.
We are not required to provide financial support to company-sponsored investment funds and only the assets of such funds are
available to settle each fund's own liabilities. Our exposure to loss regarding consolidated company-sponsored investment
funds is limited to our investment in, and our management fee earned from, such funds. Equity and debt holders of such funds
have no recourse to AB’s assets or to the general credit of AB.
The balances of consolidated VIEs and VOEs included in our consolidated statements of financial condition were as follows:
Cash and cash equivalents
$
7,572
$
167
$
7,739
$ 19,751
$
— $ 19,751
December 31, 2023
December 31, 2022
(in thousands)
VIEs
VOEs
Total
VIEs
VOEs
Total
Investments
Other assets
Total assets
Liabilities
286,619
110,555
397,174
516,536
15,010
10,289
25,299
44,424
$309,201
$121,011
$430,212
$580,711
$
9,699
$
2,838
$ 12,537
$ 55,529
$
$
Redeemable non-controlling interest
202,882
6,538
209,420
368,656
96,620
111,635
208,255
156,526
—
—
516,536
44,424
— $580,711
— $ 55,529
—
—
368,656
156,526
Partners' capital attributable to AB Unitholders
Total liabilities, redeemable non-controlling
interest and partners' capital
$309,201
$121,011
$430,212
$580,711
$
— $580,711
During 2023, we deconsolidated five funds in which we had seed investments totaling approximately $77.3 million as of
December 31, 2022 due to no longer having a controlling financial interest.
Changes in the redeemable non-controlling interest balance during the twelve-month period ended December 31, 2023 are as
follows (in thousands):
Redeemable non-controlling interest as of December 31, 2022
Deconsolidated funds
Changes in third-party seed investments in consolidated funds
Redeemable non-controlling interest as of December 31, 2023
$
368,656
(196,277)
37,041
$
209,420
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AllianceBernstein
Fair Value
Cash and cash equivalents include cash on hand, demand deposits, overnight commercial paper and highly liquid investments
with original maturities of three months or less. Due to the short-term nature of these instruments, the recorded value has been
determined to approximate fair value.
Valuation of consolidated company-sponsored investment funds' financial instruments by pricing observability levels as of
December 31, 2023 and 2022 was as follows (in thousands):
Part II
December 31, 2023:
Investments - VIEs
Investments - VOEs
Derivatives - VIEs
Derivatives - VOEs
Total assets measured at fair value
Derivatives - VIEs
Total liabilities measured at fair value
December 31, 2022:
Investments - VIEs
Derivatives - VIEs
Total assets measured at fair value
Derivatives - VIEs
Total liabilities measured at fair value
Level 1
Level 2
Level 3
Total
$
49,455
$ 237,164
$
9,036
2,139
—
101,519
2,763
8,775
$
$
$
60,630
$ 350,221
944
944
$
$
1,587
1,587
$ 129,706
$ 386,830
1,529
6,023
$ 131,235
$ 392,853
$
$
14,932
14,932
$
$
6,608
6,608
$
$
$
$
$
$
$
—
—
—
—
—
—
—
—
—
—
—
—
$ 286,619
110,555
4,902
8,775
$ 410,851
$
$
2,531
2,531
$ 516,536
7,552
$ 524,088
$
$
21,540
21,540
See Note 9 for a description of the fair value methodologies used for instruments measured at fair value, as well as the general
classification of such instruments pursuant to the valuation hierarchy.
The change in carrying value associated with Level 3 financial
company-sponsored investment funds was as follows:
instruments carried at fair value within consolidated
Balance as of beginning of period
Deconsolidated funds
Transfers (out)
Purchases
Sales
Balance as of end of period
December 31
2023
2022
(in thousands)
$
$
—
—
—
—
—
—
$
3,357
(3,351)
(6)
248
(248)
—
$
The Level 3 securities primarily consist of corporate bonds that are vendor priced with no ratings available, bank loans,
non-agency collateralized mortgage obligations and asset-backed securities.
Transfers into and out of all levels of the fair value hierarchy are reflected at end-of-period fair values. Realized and unrealized
gains and losses on Level 3 financial instruments are recorded in investment gains and losses in the consolidated statements
of income.
2023 Annual Report
109
Part II
Derivative Instruments
As of December 31, 2023 and 2022, the VIEs held $2.4 million and $14.0 million (net), respectively, of futures, forwards, options
and swaps within their portfolios. For the years ended December 31, 2023 and 2022, we recognized $0.1 million of gains and
$9.4 million of losses, respectively, on these derivatives. These gains and losses are recognized in investment gains (losses) in
the consolidated statements of income.
As of December 31, 2023 and 2022, the VIEs held $1.4 million and $2.7 million, respectively, of cash collateral payable to trade
counterparties. This obligation to return cash is reported in the liabilities of consolidated company-sponsored investment funds
in our consolidated statements of financial condition.
As of December 31, 2023 and 2022, the VIEs delivered $1.4 million and $5.4 million, respectively, of cash collateral into
brokerage accounts. The VIEs report this cash collateral in the consolidated company-sponsored investment funds cash and
cash equivalents in our consolidated statements of financial condition.
As of December 31, 2023, the VOEs held $8.8 million of futures, forwards, options and swaps within their portfolios. For the
year ended December 31, 2023, we recognized $0.1 million of losses, respectively, on these derivatives. These gains and losses
are recognized in investment gains (losses) in the consolidated statements of income.
As of December 31, 2023, the VOEs held no cash collateral payable to trade counterparties.
As of December 31, 2023, the VOEs delivered no cash collateral in brokerage accounts.
Offsetting Assets and Liabilities
Offsetting of derivative assets of consolidated company-sponsored investment funds as of December 31, 2023 and 2022 was
as follows:
Gross Amounts
Offset in the
Statement of
Financial
Condition
Net Amounts
of Assets
Presented in
the Statement
of Financial
Condition
Gross Amounts
of Recognized
Assets
Financial
Instruments
Cash Collateral
Received
Net
Amount
(in thousands)
$
$
4,902
7,552
$
$
—
—
$
$
4,902
7,552
$
$
—
—
$
$
(1,415)
(2,731)
$
$
3,487
4,821
December 31, 2023:
Derivatives - VIEs
December 31, 2022:
Derivatives - VIEs
Offsetting of derivative liabilities of consolidated company-sponsored investment funds as of December 31, 2023 and 2022
was as follows:
Gross
Amounts of
Recognized
Liabilities
Gross Amounts
Offset in the
Statement of
Financial
Condition
Net Amounts
of Liabilities
Presented in
the Statement
of Financial
Condition
Financial
Instruments
Cash Collateral
Pledged
Net
Amount
(in thousands)
$
$
2,531
21,540
$
$
—
—
$
$
2,531
21,540
$
$
—
—
$
$
(1,408)
(5,444)
$
$
1,123
16,096
December 31, 2023:
Derivatives - VIEs
December 31, 2022:
Derivatives - VIEs
Cash collateral, whether pledged or received on derivative instruments, is not considered material and, accordingly, is not
disclosed by counterparty.
Non-Consolidated VIEs
As of December 31, 2023, the net assets of company-sponsored investment products that are non-consolidated VIEs are
approximately $54.6 billion; our maximum risk of loss is our investment of $10.3 million in these VIEs and our advisory fees
110
AllianceBernstein
Part II
receivable from these VIEs are $114.5 million. As of December 31, 2022, the net assets of company-sponsored investment
products that were non-consolidated VIEs was approximately $46.4 billion; our maximum risk of loss was our investment of
$5.7 million in these VIEs and our advisory fees receivable from these VIEs were $54.2 million.
16. Net Capital
SCB LLC is registered as a broker-dealer under the Exchange Act and is subject to the minimum net capital requirements
imposed by the U.S. Securities and Exchange Commission ("SEC"). SCB LLC computes its net capital under the alternative
method permitted by the applicable rule, which requires that minimum net capital, as defined, equals the greater of $1.0 million
or two percent of aggregate debit items arising from customer transactions, as defined. As of December 31, 2023, SCB LLC had
net capital of $316.9 million, which was $289.1 million in excess of the minimum net capital requirement of $27.8 million.
Advances, dividend payments and other equity withdrawals by SCB LLC are restricted by regulations imposed by the SEC, the
Financial Industry Regulatory Authority, Inc., and other securities agencies.
Our U.K.-based broker-dealer is a member of the London Stock Exchange. As of December 31, 2023, it was subject to financial
resources requirements of $46.7 million imposed by the Financial Conduct Authority of the United Kingdom and had aggregate
regulatory financial resources of $57.0 million, an excess of $10.3 million over the required level.
AllianceBernstein Investments, Inc. ("ABI"), another one of our subsidiaries and the distributor and/or underwriter for certain
company-sponsored mutual funds, is registered as a broker-dealer under the Exchange Act and is subject to the minimum net
capital requirements imposed by the SEC. As of December 31, 2023, ABI had net capital of $26.8 million, which was $26.5
million in excess of its required net capital of $0.3 million.
Many of our subsidiaries around the world are subject to minimum net capital requirements by the local laws and regulations to
which they are subject. As of December 31, 2023, each of our subsidiaries subject to a minimum net capital requirement
satisfied the applicable requirement.
17. Counterparty Risk
Customer Activities
In the normal course of business, brokerage activities involve the execution, settlement and financing of various customer
securities trades, which may expose our broker-dealer operations to off-balance sheet risk by requiring us to purchase or sell
securities at prevailing market prices in the event the customer is unable to fulfill its contractual obligations.
Our customer securities activities are transacted on either a cash or margin basis. In margin transactions, we extend credit to
the customer, subject to various regulatory and internal margin requirements. These transactions are collateralized by cash or
securities in the customer’s account. In connection with these activities, we may execute and clear customer transactions
involving the sale of securities not yet purchased. We seek to control the risks associated with margin transactions by requiring
customers to maintain collateral in compliance with the aforementioned regulatory and internal guidelines. We monitor required
margin levels daily and, pursuant to such guidelines, require customers to deposit additional collateral, or reduce positions,
when necessary. A majority of our customer margin accounts are managed on a discretionary basis whereby we maintain
control over the investment activity in the accounts. For these discretionary accounts, our margin deficiency exposure is
minimized by our maintaining a diversified portfolio of securities in the accounts, our discretionary authority and our U.S.-based
broker-dealer's role as custodian.
In accordance with industry practice, we record customer transactions on a settlement date basis. We are exposed to risk of
loss on these transactions in the event of the customer’s inability to meet the terms of their contracts, in which case we may
have to purchase or sell financial instruments at prevailing market prices. The risks we assume in connection with these
transactions are not expected to have a material adverse effect on our financial condition or results of operations.
Other Counterparties
We are engaged in various brokerage, futures, forwards, options and swap activities on behalf of clients,
in which
counterparties primarily include broker-dealers, banks and other financial institutions. In the event these counterparties do not
fulfill their obligations, our clients and we may be exposed to loss. The risk of default depends on the creditworthiness of the
counterparty. It is our policy to review, as necessary, each counterparty’s creditworthiness.
In connection with security borrowing and lending arrangements, we enter into collateralized agreements, which may result in
potential loss in the event the counterparty to a transaction is unable to fulfill its contractual obligations. Security borrowing
arrangements require us to deposit cash collateral with the lender. With respect to security lending arrangements, we receive
collateral in the form of cash in amounts generally in excess of the market value of the securities loaned. We attempt to
mitigate credit risk associated with these activities by establishing credit limits for each broker and monitoring these limits on a
2023 Annual Report
111
Part II
daily basis. Additionally, security borrowing and lending collateral is marked to market on a daily basis, and additional collateral
is deposited by or returned to us as necessary.
We enter into various futures, forwards, options and swaps primarily to economically hedge certain of our seed money
investments. We may be exposed to credit losses in the event of nonperformance by counterparties to these derivative financial
instruments. See Note 7, Derivative Instruments for further discussion.
18. Qualified Employee Benefit Plans
We maintain a qualified profit sharing plan covering U.S. employees and certain foreign employees. Employer contributions are
discretionary and generally limited to the maximum amount deductible for federal
income tax purposes. Aggregate
contributions were $19.0 million, $17.5 million and $16.5 million for 2023, 2022 and 2021, respectively.
We maintain several defined contribution plans for foreign employees working for our subsidiaries in the United Kingdom,
Australia, Japan and other locations outside the United States. Employer contributions generally are consistent with regulatory
requirements and tax limits. Defined contribution expense for foreign entities was $11.7 million, $10.2 million and $9.8 million
in 2023, 2022 and 2021, respectively.
We maintain a qualified, noncontributory, defined benefit retirement plan (the “Retirement Plan”) covering current and former
employees who were employed by AB in the United States prior to October 2, 2000. Benefits are based on years of credited
service, average final base salary (as defined in the Retirement Plan) and primary Social Security benefits. Service and
compensation after December 31, 2008 are not taken into account in determining participants’ retirement benefits.
Our policy is to satisfy our funding obligation for each year in an amount not less than the minimum required by ERISA and not
greater than the maximum amount we can deduct for federal income tax purposes. We did not make a contribution to the
Retirement Plan during 2023. We do not currently anticipate that we will contribute to the Retirement Plan during 2024.
Contribution estimates, which are subject to change, are based on regulatory requirements, future market conditions and
assumptions used for actuarial computations of the Retirement Plan’s obligations and assets. Management, at the present
time, has not determined the amount, if any, of additional future contributions that may be required.
The Retirement Plan’s projected benefit obligation, fair value of plan assets and funded status (amounts recognized in the
consolidated statements of financial condition) were as follows:
Change in projected benefit obligation:
Projected benefit obligation at beginning of year
Interest cost
Plan settlements
Actuarial (gain)
Benefits paid
Projected benefit obligation at end of year
Change in plan assets:
Plan assets at fair value at beginning of year
Actual return on plan assets
Plan settlements
Benefits paid
Plan assets at fair value at end of year
Funded status
Years Ended December 31
2023
2022
(in thousands)
$ 100,480
$ 141,862
5,199
—
(984)
(6,269)
98,426
95,990
11,655
—
(6,269)
101,376
3,958
(4,524)
(37,839)
(2,977)
100,480
130,939
(27,448)
(4,524)
(2,977)
95,990
$
2,950
$
(4,490)
Effective December 31, 2015, the Retirement Plan was amended to change the actuarial basis used for converting a life annuity
benefit to optional forms of payment and converting benefits payable at age 65 to earlier commencement dates. This prior
service cost will be amortized over future years.
112
AllianceBernstein
Part II
The amounts recognized in other comprehensive income for the Retirement Plan for 2023, 2022 and 2021 were as follows:
Unrecognized net gain (loss) from experience different from that assumed and
effects of changes and assumptions
Prior service cost
Income tax (expense)
Other comprehensive income
2023
2022
2021
(in thousands)
$
8,815
$
6,519
$
15,858
24
8,839
(9)
24
6,543
(33)
24
15,882
(87)
$
8,830
$
6,510
$
15,795
The gain fof $$8.8 million recognized in 2023 was primarily due to actual earnings exceeding expected earnings on plan assets of
($6.9 million), the recognized actuarial loss of ($0.9 million), changes in the discount rate and lump sum interest rates fof ($($0.5
millio )n) and changes in the census data ($($0.5 millio )n).
The gain of $6.5 million recognized in 2022 was primarily due to changes in the discount rate and lump sum interest rates of
($38.7 million), settlement loss recognized of ($1.7 million) and the recognized actuarial loss of ($1.0 million), offset by actual
earnings less than expected earnings on plan assets of ($34.0 million), changes in the census data ($0.5 million) and changes
in adjustments for participants who received their pension as a lump sum ($0.4 million).
The gain of $15.8 million recognized in 2021 was primarily due to actual earnings exceeding expected earnings on plan assets
($8.2 million), changes in the discount rate and lump sum interest rates of ($5.6 million), settlement loss recognized of
($2.0 million) and the recognized actuarial loss of ($1.5 million), offset by changes in the census data ($1.0 million) and
changes in the mortality assumption ($0.2 million).
Foreign retirement plans and an individual's retirement plan maintained by AB are not material to AB's consolidated financial
statements. As such, disclosure for these plans is not necessary. The reconciliation of the 2023 amounts recognized in other
comprehensive income for the Retirement Plan as compared to the consolidated statement of comprehensive income (the "OCI
Statement") is as follows:
Recognized actuarial gain
Amortization of prior service cost
Changes in employee benefit related items
Income tax (expense)
Retirement
Plan
Retired
Individual Plan
Foreign
Retirement
Plans
OCI
Statement
(in thousands)
$
8,815
$
(19)
$
339
$
9,135
24
8,839
(9)
—
(19)
—
—
339
(70)
24
9,159
(79)
Employee benefit related items, net of tax
$
8,830
$
(19)
$
269
$
9,080
The amounts included in accumulated other comprehensive loss for the Retirement Plan as of December 31, 2023 and 2022
were as follows:
Unrecognized net loss from experience different from that assumed and effects of
changes and assumptions
Prior service cost
Income tax benefit
Accumulated other comprehensive loss
2023
2022
(in thousands)
$ (28,433)
$ (37,249)
(635)
(659)
(29,068)
(37,908)
168
177
$ (28,900)
$ (37,731)
The amortization period over which we are amortizing the loss for the Retirement Plan from accumulated other comprehensive
income is 27.2 years. The estimated prior service cost and amortization of loss for the Retirement Plan that will be amortized
from accumulated other comprehensive income over the next year are $24,000 and $0.7 million.
The accumulated benefit obligation for the plan was $98.4 million and $100.5 million as of December 31, 2023 and 2022,
respectively.
2023 Annual Report
113
Part II
The discount rates used to determine benefit obligations as of December 31, 2023 and 2022 (measurement dates) were 5.40%
and 5.50%, respectively.
Benefit payments are expected to be paid as follows (in thousands):
2024
2025
2026
2027
2028
2029 - 2033
Net expense under the Retirement Plan consisted of:
Interest cost on projected benefit obligations
Expected return on plan assets
Amortization of prior service cost
Settlement loss recognized
Recognized actuarial loss
Net pension expense
$
10,059
8,030
7,856
8,690
7,677
37,703
Years Ended December 31
2023
2022
2021
(in thousands)
$
5,199
$
3,958
$
3,794
(4,776)
(6,591)
(6,351)
24
—
952
24
1,678
1,042
$
1,399
$
111
$
24
2,024
1,447
938
Actuarial computations used to determine net periodic costs were made utilizing the following weighted-average assumptions:
Discount rate on benefit obligations
Expected long-term rate of return on plan assets
Years Ended December 31
2023
2022
2021
5.50%
5.25%
2.90%
5.25%
2.55%
5.25%
In developing the expected long-term rate of return on plan assets of 5.25%, management considered the historical returns and
future expectations for returns for each asset category, as well as the target asset allocation of the portfolio. The expected
long-term rate of return on assets is based on weighted average expected returns for each asset class.
As of December 31, 2023, the mortality projection assumption used the generational MP-2021 improvement scale, which is
consistent with the improvement scale used in 2022 and 2021. The base mortality assumption used is the Society of Actuaries
PRI-2012 base mortality table for private sector plans, with a white-collar adjustment, using the contingent annuitant table for
beneficiaries of deceased participants.
For fiscal year-end 2023, we reflected the most recently published Internal Revenue Service table for lump sums assumed to be
paid in 2023. We projected future mortality for lump sums assumed to be paid after 2023 using the current base mortality
tables (RP-2014 backed off to 2006) and projection scale of MP-2021.
The Retirement Plan’s asset allocation percentages consisted of:
Equity
Debt securities
Other
Total
Years Ended December 31
2023
2022
28%
62
10
100%
46%
42
12
100%
The guidelines regarding allocation of assets are formalized in the Investment Policy Statement adopted by the Investment
Committee for the Retirement Plan. The objective of the investment program is to enhance the portfolio of the Retirement Plan
through total return (capital appreciation and income), thereby promoting the ongoing ability of the Plan to meet future
liabilities and obligations, while minimizing the need for additional contributions, and managing the Plan's funded status
114
AllianceBernstein
appropriately. The guidelines specify a target allocation weighting of 62.5% for liability hedging investments and 37.5% for
return seeking investments.
See Note 9, Fair Value for a description of how we measure the fair value of our plan assets.
The valuation of our Retirement Plan assets by pricing observability levels as of December 31, 2023 and 2022 was as follows
(in thousands):
Part II
December 31, 2023
Cash
U.S. Treasury Strips
Fixed income mutual funds
Fixed income securities
Equity mutual funds
Equity securities
Total assets in the fair value hierarchy
Investments measured at net assets value
Investments at fair value
December 31, 2022
Cash
U.S. Treasury Strips
Fixed income mutual funds
Fixed income securities
Equity mutual funds
Equity securities
Total assets in the fair value hierarchy
Investments measured at net assets value
Investments at fair value
Level 1
Level 2
Level 3
Total
$
944
$
—
$
—
2,271
—
9,821
10,231
23,267
—
15,764
—
46,443
—
—
62,207
—
$
23,267
$
62,207
$
—
—
—
—
—
—
—
—
—
$
944
15,764
2,271
46,443
9,821
10,231
85,474
15,902
$ 101,376
Level 1
Level 2
Level 3
Total
$
1,441
$
—
$
—
2,149
—
26,074
10,928
40,592
—
15,634
—
22,478
—
219
38,331
—
$
40,592
$
38,331
$
—
—
—
—
—
—
—
—
—
$
1,441
15,634
2,149
22,478
26,074
11,147
78,923
17,067
$
95,990
During 2023 and 2022, the Retirement Plan's investments include the following:
fixed income securities primarily invested in bonds and included as a level 2 security;
• U.S. Treasury strips, (zero coupon bonds) in 2023 and 2022;
•
• one multi asset fund in 2023 and 2022, in which the fund pursued an aggressive investment strategy involving a variety of
asset classes. This fund seeks inflation protection from investments around the globe, both in developed and emerging
market countries;
• six equity mutual funds in 2023 and 2022, which focus on both U.S.-based and non-U.S.-based equity securities of various
capitalization sizes ranging from small to large capitalization and diversified portfolios within those capitalization ranges;
• one asset allocation mutual fund in 2022 which was liquidated in 2023;
• one separately managed account in 2023, managed against the Bloomberg Long U.S. Corporate index. This portfolio invests
in U.S. dollar denominated investment grade fixed income securities with at least 10 years to maturity;
• one alternative investment in 2022 which was liquidated in 2023;
•
investments measured at net asset value, including one hedge fund in 2023 and two hedge funds in 2022. The hedge fund
included in both 2023 and 2022 seeks to provide attractive risk-adjusted returns over full market cycles with less volatility
than that of broad equity markets by allocating all or substantially all of their assets among portfolio managers through
portfolio funds that employ a broad range of investment strategies. The second hedge fund included in 2022 was a long/
short equity-focused multi-manager hedge fund investing across industries and geographies.
19. Long-term Incentive Compensation Plans
We maintain an unfunded, non-qualified incentive compensation program known as the AllianceBernstein Incentive
Compensation Award Program (the “Incentive Compensation Program”), under which annual awards may be granted to eligible
2023 Annual Report
115
Part II
employees. See Note 2 "Summary of Significff ant Accounting Policies – Long-TerTT mrr
discussion of the award provisions.
Incentive Compensation Plans" for a
Under the Incentive Compensation Program, we made awards in 2023, 2022 and 2021 aggregating $170.2 million, $164.3
million and $184.1 million, respectively. The amounts charged to employee compensation and benefits expense for the years
ended December 31, 2023, 2022 and 2021 were $183.0 million, $160.1 million and $173.4 million, respectively.
Effective as of September 30, 2017, we established the AB 2017 Long Term Incentive Plan (“2017 Plan”), which was adopted at
a special meeting of AB Holding Unitholders held on September 29, 2017. The following forms of awards may be granted to
employees and Eligible Directors (directors who satisfy applicable independence standards) under the 2017 Plan: (i) restricted
AB Holding Units or phantom restricted AB Holding Units (a “phantom” award is a contractual right to receive AB Holding Units
at a later date or upon a specified event); (ii) options to buy AB Holding Units; and (iii) other AB Holding Unit-based awards
(including, without limitation, AB Holding Unit appreciation rights and performance awards). The purpose of the 2017 Plan is to
promote the interest of AB by: (i) attracting and retaining talented officers, employees and directors, (ii) motivating such
officers, employees and directors by means of performance-related incentives to achieve longer-range business and
operational goals, (iii) enabling such officers, employees and directors to participate in the long-term growth and financial
success of AB, and (iv) aligning the interests of such officers, employees and directors with those of AB Holding Unitholders.
The 2017 Plan will expire on September 30, 2027, and no awards under the 2017 Plan will be made after that date. Under the
2017 Plan, the aggregate number of AB Holding Units with respect to which awards may be granted is 60 million, including no
more than 30 million newly-issued AB Holding Units.
As of December 31, 2023, no options to buy AB Holding Units were outstanding and 32,738,157 AB Holding Units, net of
withholding tax requirements, were subject to other AB Holding Unit awards made under the 2017 Plan or the AllianceBernstein
2010 Long Term Incentive Plan, as amended, an equity compensation plan with similar terms that was canceled on September
30, 2017. AB Holding Unit-based awards (including options) in respect of 27,261,843 AB Holding Units were available for grant
under the 2017 Plan as of December 31, 2023.
As of December 31, 2022, no options to buy AB Holding Units had been granted and 29,795,964 AB Holding Units, net of
withholding tax requirements, were subject to other AB Holding Unit awards made under the 2017 Plan or the AllianceBernstein
2010 Long Term Incentive Plan, as amended, an equity compensation plan with similar terms that was canceled on
September 30, 2017. AB Holding Unit-based awards (including options) in respect of 30,204,036 AB Holding Units were
available for grant under the 2017 Plan as of December 31, 2022.
Clawbacks
The award agreement contained in the Incentive Compensation Program permits AB to clawback the unvested portion of an
award if the recipient fails to adhere to our risk management policies. Further, pursuant to Rule 10D-1 of the Securities
Exchange Act of 1934 (the "Rule") and Section 303A.14 of the NYSE Listed Company Manual, the Board of Directors (the
"Board") has adopted a Compensation Recovery Policy (the "Policy") effective November 15, 2023. Pursuant to the Policy, the
Company will promptly recover erroneously awarded incentive-based compensation (as defined by section 10D(b)(1) to include
any compensation that is granted, earned or vested wholly or in part upon attainment of a financial reporting measure) from any
current or former Executive Officer of the Company as defined by Rule 10D-1 of the Exchange Act as required under the
Exchange Act and the NYSE Listed Company Manual. The company does not currently award incentive-based compensation as
defined by the Rule. We have filed the Policy as Exhibit 97.01 to this Form 10-K.
The portion of incentive-based compensation received from EQH specific to Seth Bernstein, our Chief Executive Officer, is
covered under the Compensation Recovery Policy adopted by our parent EQH and will be applicable to any current or previous
incentive-based compensation received directly from our parent company by Mr. Bernstein.
Option Awards
We did not grant any options to buy AB Holding Units during 2023, 2022 or 2021. Historically, options granted to employees
generally were exercisable at a rate of 20% of the AB Holding Units subject to such options on each of the first five anniversary
dates of the date of grant; options granted to Eligible Directors generally were exercisable at a rate of 33.3% of the AB Holding
Units subject to such options on each of the first three anniversary dates of the date of grant. There was no option-related
activity in our equity compensation plans during 2023.
116
AllianceBernstein
Part II
The total intrinsic value of options exercised during 2023, 2022 or 2021 was zero , $0.2 million and $2.2 million, respectively.
Under the fair value method, compensation expense is measured at the grant date based on the estimated fair value of the
options awarded (determined using the Black-Scholes option valuation model) and is recognized over the requisite service
period. As we did not grant any option awards in 2023, 2022 or 2021, no compensation expense was recorded. As of December
31, 2023, there was no compensation expense related to unvested option grants not yet recognized in the consolidated
statement of income.
Restricted AB Holding Unit Awards
In 2023, 2022 and 2021, the Board granted restricted AB Holding Unit awards to Eligible Directors. These AB Holding Units give
the Eligible Directors, in most instances, all the rights of other AB Holding Unitholders, subject to such restrictions on transfer
as the Board may impose.
We award restricted AB Holding Units to Eligible Directors that vest ratably over three years (four years for awards granted in
2021). We fully expensed these awards on each grant date, as there is no service requirement. Grant details related to these
awards is as follows:
Restricted Units Awarded
Weighted Average Grant Date Fair Value
Compensation Expense (in millions)
2023
2022
2021
30,102
33.89
1.0
$
$
30,870
38.55
1.2
$
$
35,358
44.29
1.6
$
$
On April 28, 2017, Seth Bernstein was appointed President and Chief Executive Officer. In connection with the commencement
of his employment, Mr. Bernstein was granted restricted AB Holding Units; these Units were fully amortized as of December 31,
2021. Compensation expense related to Mr. Bernstein's restricted AB Holding Unit grant was $0.3 million for the year ended
December 31, 2021.
Under the Incentive Compensation Program, we awarded 5.2 million restricted AB Holding Units in 2023 (which included 5.0
million restricted AB Holding Units in December for the 2023 year-end awards as well as 0.2 million additional restricted AB
Holding Units granted earlier during the year relating to the 2022 year-end awards), with grant date fair values per restricted AB
Holding Unit ranging between $30.56 to $38.84.
We awarded 4.2 million restricted AB Holding Units in 2022 (which included 3.8 million restricted AB Holding Units in December
for the 2022 year-end awards as well as 0.4 million additional restricted AB Holding Units granted earlier during the year relating
to the 2021 year-end awards), with grant date fair values per restricted AB Holding Unit ranging between $38.84 to $50.94.
We awarded 3.5 million restricted AB Holding Units in 2021 (which included 3.3 million restricted AB Holding Units in December
for the 2021 year-end awards as well as 0.2 million additional restricted AB Holding Units granted earlier during the year related
to the 2020 year-end awards), with grant date fair values per restricted AB Holding Unit ranging between $32.10 to $50.94.
Restricted AB Holding Units awarded under the Incentive Compensation Program generally vest in 33.3% increments on
December 1st of each of the three years immediately following the year in which the award is granted.
We also award restricted AB Holding Units in connection with certain employment and separation agreements, as well as
relocation-related performance awards, with vesting schedules generally ranging between two and ten years. Grant details
related to these awards is as follows:
Restricted Units Awarded
Grant Date Fair Value Range
Compensation Expense
2023
2022
2021
(in millions excluding share prices)
0.5
0.5
3.4
$27.86 - $38.58
$34.86 - $49.90
$29.06 - $53.86
$
30.1
$
35.0
$
40.9
2023 Annual Report
117
Part II
The fair value of the restricted AB Holding Units is amortized over the requisite service period as compensation expense.
Changes in unvested restricted AB Holding Units during 2023 are as follows:
Unvested as of December 31, 2022
Granted
Vested
Forfeited
Unvested as of December 31, 2023
AB Holding
Units
14,772,236
$
5,664,619
(6,598,656)
(390,644)
13,447,555
$
Weighted Average
Grant Date Fair
Value per AB Holding
Unit
36.92
31.05
35.74
37.36
35.02
The total grant date fair value of restricted AB Holding Units that vested was $235.8 million, $246.2 million and $199.0 million
during 2023, 2022 and 2021, respectively. As of December 31, 2023, the 13,447,555 unvested restricted AB Holding Units
consist of 10,017,189 restricted AB Holding Units that do not have a service requirement and have been fully expensed on the
grant date and 3,430,366 restricted AB Holding Units that have a service requirement and will be expensed over the required
service period. As of December 31, 2023, there was $91.0 million of compensation expense related to unvested restricted AB
Holding Unit awards granted and not yet recognized in the consolidated statement of income. We expect to recognize the
expense over a weighted average period of 5.9 years.
20. Units Outstanding
Changes in AB Units outstanding for the years ended December 31, 2023 and 2022 were as follows:
Outstanding as of January 1,
Options exercised
Units issued (1)
Units retired(2)
Outstanding as of December 31,
2023
2022
285,979,913
271,453,043
—
5,774
3,283,594
17,326,222
(2,654,295)
(2,805,126)
286,609,212
285,979,913
(1)
Includes 15,321,535 Units issued in 2022 as a result of the CarVal acquisition.
(2) During 2023 and 2022, we purchased 5,695 and 2,500 AB Units, respectively, in private transactions and retired them.
118
AllianceBernstein
Part II
21. Income Taxes
AB, a private limited partnership, is not subject to federal or state corporate income taxes. However, AB is subject to a 4.0%
New York City unincorporated business tax (“UBT”). Our domestic corporate subsidiaries are subject to federal, state and local
income taxes, and generally are included in the filing of a consolidated federal income tax return. Separate state and local
income tax returns also are filed. Foreign corporate subsidiaries generally are subject to taxes in the jurisdictions where they
are located.
In order to preserve AB’s status as a private partnership for federal income tax purposes, AB Units must not be considered
publicly traded. The AB Partnership Agreement provides that all transfers of AB Units must be approved by EQH and the
General Partner; EQH and the General Partner approve only those transfers permitted pursuant to one or more of the safe
harbors contained in the relevant Treasury regulations. If AB Units were considered readily tradable, AB’s net income would be
subject to federal and state corporate income tax, significantly reducing its quarterly distributions to AB Holding. Furthermore,
should AB enter into a substantial new line of business, AB Holding, by virtue of its ownership of AB, would lose its status as a
publicly traded partnership and would become subject to corporate income tax, which would reduce materially AB Holding’s net
income and its quarterly distributions to AB Holding Unitholders.
Earnings before income taxes and income tax expense consist of:
Earnings before income taxes:
United States
Foreign
Total
Income tax expense:
Partnership UBT
Corporate subsidiaries:
Federal
State and local
Foreign
Current tax expense
Deferred tax
Income tax expense
Years Ended December 31
2023
2022
2021
(in thousands)
$ 714,732
$ 689,278
$ 1,007,847
102,938
125,818
208,615
$ 817,670
$ 815,096
$1,216,462
$
7,838
$
5,996
$
6,951
2,855
914
35,906
47,513
(18,462)
1,457
931
34,327
42,711
(3,072)
750
956
58,080
66,737
(4,009)
$
29,051
$
39,639
$
62,728
2023 Annual Report
119
Part II
The principal reasons for the difference between the effective tax rates and the UBT statutory tax rate of 4.0% are as follows:
2023
Years Ended December 31
2022
(in thousands)
2021
UBT statutory rate
$ 32,707
4.0% $ 32,604
4.0% $ 48,659
4.0%
Corporate subsidiaries' federal, state, and local
Foreign subsidiaries taxed at different rates
FIN 48 reserve (release)
UBT business allocation percentage rate change
Deferred tax and payable write-offs
Foreign outside basis difference
Valuation allowance reserve (release)
Effect of ASC 740 adjustments, miscellaneous taxes,
and other
Tax Credits
Income not taxable resulting from use of UBT business
apportionment factors and effect of compensation
charge
4,538
36,788
(2,838)
(1,049)
1,750
3,414
0.6
4.5
(0.3)
(0.1)
0.2
0.4
(22,447)
(2.7)
3,553
(1,604)
0.4
(0.2)
1,460
32,664
—
(98)
1,089
(1,535)
—
5,366
(5,275)
0.2
4.0
—
—
0.1
(0.2)
—
0.7
(0.6)
1,322
43,019
—
23
1,003
1,492
—
1,799
—
0.2
3.5
—
—
0.1
0.1
—
0.1
—
(25,761)
(3.2)
(26,636)
(3.3)
(34,589)
(2.8)
Income tax expense and effective tax rate
$29,051
3.6 % $39,639
4.9 % $62,728
5.2 %
We recognize the effects of a tax position in the financial statements only if, as of the reporting date, it is “more likely than not”
to be sustained based on its technical merits and their applicability to the facts and circumstances of the tax position. In
making this assessment, we assume that the taxing authority will examine the tax position and have full knowledge of all
relevant information.
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
Years Ended December 31
2023
2022
2021
(in thousands)
$
2,838
$
2,838
$
2,838
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Balance as of beginning of period
Additions for prior year tax positions
Reductions for prior year tax positions
Additions for current year tax positions
Reductions for current year tax positions
Reductions related to closed years/settlements with tax authorities
(2,838)
Balance as of end of period
$
—
$
2,838
$
2,838
The amount of unrecognized tax benefits as of December 31, 2023, 2022, and 2021, when recognized, is recorded as a
reduction to income tax expense and reduces the company’s effective tax rate.
Interest and penalties, if any, relating to tax positions are recorded in income tax expense on the consolidated statements of
income. As of December 31, 2023, 2022, and 2021, there is no accrued interest or penalties recorded on the consolidated
statements of financial condition.
Generally, the company is no longer subject to U.S. federal, state or local income tax examinations by tax authorities for any
year prior to 2019, except as set forth below.
During the third quarter of 2023, the City of New York notified us of an examination of AB's UBT returns for the years 2020
through 2021. The examination is ongoing and no provision with respect to this examination has been recorded.
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AllianceBernstein
Currently, there are no income tax examinations at our significant non-U.S. subsidiaries. Years that remain open and may be
subject to examination vary under local law and range from one to seven years.
Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities
for financial reporting purposes and the amounts used for income tax purposes. The tax effect of significant items comprising
the net deferred tax asset (liability) is as follows:
Part II
Deferred tax asset:
Differences between book and tax basis:
Benefits from net operating loss carryforwards
Long-term incentive compensation plans
Investment basis differences
Depreciation and amortization
Lease liability
Investment in foreign subsidiaries
Tax credit carryforward
Other, primarily accrued expenses deductible when paid
Less: valuation allowance
Deferred tax asset
Deferred tax liability:
Differences between book and tax basis:
Intangible assets
Right-of-use asset
Other
Deferred tax liability
Net deferred tax asset
Years Ended December 31
2023
2022
(in thousands)
$
11,360
$
4,918
12,519
11,890
3,706
4,324
33,427
5,710
8,988
91,924
17,524
10,286
3,071
4,911
26,479
6,171
6,860
80,220
(28,579)
(38,110)
63,345
42,110
11,454
3,730
3,020
18,204
10,190
4,191
2,808
17,189
$
45,141
$
24,921
Valuation allowances of $28.6 million and $38.1 million were established as of December 31, 2023 and 2022, respectively,
primarily due to significant negative evidence that capital losses anticipated in the held for sale foreign subsidiaries will not be
utilized, given the nature of income expected to be incurred by the applicable subsidiaries. During 2023, we recognized a one-
time tax benefit of $22.4 million from the release of a valuation allowance on a capital loss tax asset due to a tax planning
action identified in the fourth quarter, due to a future restructuring of certain foreign subsidiaries that would not have a material
impact on AB operations. We had net operating loss carryforwards at December 31, 2023 and 2022 of approximately $44.0
million and $30.3 million, respectively, in certain foreign locations with a five year expiration period.
The deferred tax asset is included in other assets in our consolidated statement of financial condition. Management believes
there will be sufficient future taxable income to realize the tax benefits related to the remaining net deferred tax assets
recognized that are not subject to valuation allowances.
The company provides income taxes on the unremitted earnings of non-U.S. corporate subsidiaries except to the extent that
such earnings are indefinitely reinvested outside the United States. As of December 31, 2023, $29.6 million of undistributed
earnings of non-U.S. corporate subsidiaries were indefinitely invested outside the U.S. At existing applicable income tax rates,
additional taxes of approximately $6.2 million would need to be paid if such earnings are remitted.
2023 Annual Report
121
Part II
22. Business Segment Information
Management has assessed the requirements of ASC 280, Segment Reporting, and determined that, because we utilize a
consolidated approach to assess performance and allocate resources, we have only one operating segment. Enterprise-wide
disclosures as of and for the years ended December 31, 2023, 2022 and 2021 were as follows:
Services
Net revenues derived from our investment management, research and related services were as follows:
Institutions
Retail
Private Wealth Management
Bernstein Research Services
Other
Total revenues
Less: Interest expense
Net revenues
Years Ended December 31
2023
2022
2021
(in thousands)
$ 666,670
$ 659,983
$ 587,017
1,926,020
2,000,908
2,223,829
1,052,843
1,004,003
1,126,142
386,142
231,189
416,273
39,561
452,017
56,283
4,262,864
4,120,728
4,445,288
107,541
66,438
3,686
$4,155,323
$4,054,290
$4,441,602
No individual fund accounted for more than 10% of our investment advisory and service fees and our net revenues during 2023,
2022 and 2021.
Geographic Information
Net revenues and long-lived assets, related to our U.S. and international operations, as of and for the years ended December 31,
were as follows:
Net revenues:
United States
International
Total
Long-lived assets:
United States
International
Total
Majoa r Customers
2023
2022
2021
(in thousands)
$ 2,527,498
$ 2,381,958
$ 2,558,592
1,627,825
1,672,332
1,883,010
$4,155,323
$4,054,290
$4,441,602
$ 4,073,198
$ 4,067,991
53,670
72,466
$4,126,868
$4,140,457
No single customer or individual client accounted for more than 10% of our total revenues for the years ended December 31,
2023, 2022 and 2021.
122
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Part II
23. Related Party Transactions
Mutual Funds
We provide investment management, distribution, shareholder, administrative and brokerage services to individual investors by
means of retail mutual funds sponsored by our company, our subsidiaries and our affiliated joint venture companies. We
provide substantially all of these services under contracts that specify the services to be provided and the fees to be charged.
The contracts are subject to annual review and approval by each mutual fund’s board of directors or trustees and, in certain
circumstances, by the mutual fund’s shareholders.
Revenues for services provided or related to the mutual funds are as follows:
Investment advisory and services fees
Distribution revenues
Shareholder servicing fees
Other revenues
Bernstein Research Services
EQH and its Subsidiaries
Years Ended December 31
2023
2022
2021
(in thousands)
$ 1,377,916
$ 1,452,885
$ 1,644,757
575,647
590,580
637,076
76,440
9,398
—
79,167
8,366
—
85,745
8,364
2
$2,039,401
$2,130,998
$2,375,944
We provide investment management and certain administration services to EQH and its subsidiaries. In addition, EQH and its
subsidiaries distribute company-sponsored mutual funds, for which they receive commissions and distribution payments. Also,
we are covered by various insurance policies maintained by EQH and we pay fees for technology and other services provided by
EQH and its subsidiaries. Additionally, see Note 12 Debt, for disclosures related to our credit facility with EQH.
Aggregate amounts included in the consolidated financial statements for transactions with EQH and its subsidiaries, as of and
for the years ended December 31, are as follows:
Revenues:
Investment advisory and services fees
Other revenues
Expenses:
Commissions and distribution payments to financial intermediaries
General and administrative
Other
Balance Sheet:
Institutional investment advisory and services fees receivable
Prepaid expenses
Other due to EQH and its subsidiaries
EQH Facility
Years Ended December 31
2023
2022
2021
(in thousands)
165,748
$ 148,377
$ 133,074
617
688
675
166,365
$ 149,065
$ 133,749
$
$
$
3,492
2,909
40,253
46,654
9,055
709
4,719
$
3,897
2,882
14,069
4,550
2,373
3,953
20,848
$
10,876
7,732
385
(4,206)
$
$
$
$
$
(900,000)
(990,000)
$ (885,517)
$ (986,089)
2023 Annual Report
123
Part II
Other Related Parties
The consolidated statements of financial condition include a net receivable from AB Holding as a result of cash transactions
for fees and expense reimbursements. The net receivable balance included in the consolidated statements of financial
condition as of December 31, 2023 and 2022 was $8.7 million and $7.7 million, respectively.
24. Divestitures and Acquisitions
Divestitures
On November 22, 2022, AB and SocGen, a leading European bank, announced plans to form a joint venture combining their
respective cash equities and research businesses (the "Initial Plan"). In the Initial Plan, AB would own a 49% interest in the joint
venture and SocGen would own a 51% interest in the global joint venture, with an option to reach 100% ownership after five
years.
During the fourth quarter of 2023, AB and SocGen negotiated a revised plan (the "Revised Plan") to form a North American joint
venture (the "NA JV") and an International joint venture (the "International JV"). Under the Revised Plan, AB would own a
majority economic and voting interest in the NA JV and a 49% economic and voting interest in the International JV. The Revised
Plan, as compared to the Initial Plan, will not have a significant impact on our results of operations or financial condition.
SocGen will continue to have an option to reach 100% ownership in the International JV fafter ffive years and AB would have an
option to sell its share in both joint ventures to SocGen, subject to regulatory approval. The consummation fof the joint ventures
is subject to customary closing conditions, including regulatory clearances. The closings are expected to occur in the ffirst halflf
fof 2024.
The structure of the Board of Directors of the NA JV Holding Company, which will include two independent directors, precludes
AB from controlling the Board and therefore from having a controlling financial interest in the entity. Upon review of the
consolidation guidance under U.S. GAAP, we have concluded we will not consolidate the NA JV Holding Company and will
maintain an equity method investment in both the NA JV and the International JV holding companies. Accordingly, the assets
and liabilities of AB's research services business (“the disposal group”) continue to be classified as held for sale on the
consolidated statement
fof ffinancial condition and recorded at ffair value, less cost to sell. As a result of classifying these assets
as held for sale, we recognized a non-cash valuation adjustment of $6.6 million in general and administrative expenses on the
condensed consolidated statement of income for the twelve months ended December 31, 2023, as well as $7.4 million for the
three months ended December 31, 2022, to recognize the net carrying value at lower of cost or fair value, less estimated costs
to sell. Approximately $7.2 million in costs to sell have been paid as of December 31, 2023.
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AllianceBernstein
The following table summarizes the assets and liabilities of the disposal group classified as held for sale on the consolidated
statement of financial condition as of December 31, 2023 and 2022:
Part II
Cash and cash equivalents
Receivables, net:
Brokers and dealers
Brokerage clients
Other fees
Investments
Furniture and equipment, net
Other assets
Right-of-use assets
Intangible assets
Goodwill
Valuation adjustment (allowance) on disposal group
Total assets held for sale
Payables:
Brokers and dealers
Brokerage clients
Other liabilities
Accrued compensation and benefits
Total liabilities held for sale
Years Ended December 31
2023
2022
(in thousands)
$
153,047
$
159,123
32,669
74,351
15,326
17,029
5,807
104,228
5,032
4,061
159,826
(6,600)
564,776
$
$
39,359
16,885
67,938
29,160
44,717
29,243
22,988
24,507
4,128
107,764
1,552
4,903
159,826
(7,400)
551,351
32,983
10,232
50,884
13,853
153,342
$
107,952
$
$
$
As of December 31, 2023 and 2022, cash and cash equivalents classified as held for sale included in the consolidated
statement of cash flows were $153.0 million and $159.1 million, respectively.
We have determined that the exit from the sell-side research business does not represent a strategic shift that had a major
effect on our consolidated results of operations. Accordingly, we have not classified the disposal group as discontinued
operations. The results of operations of the disposal group up to the respective dates of sale will be included in our
consolidated results of operations for all periods presented. The lower of amortized cost or fair value adjustment upon
transferring these assets to held for sale was not material.
Acquisitions
On July 1, 2022, AB Holding acquired a 100% ownership interest in CarVal, a global private alternatives investment manager
primarily focused on opportunistic and distressed credit, renewable energy, infrastructure, specialty finance and transportation
investments that, as of the acquisition date, constituted approximately $12.2 billion in AUM. Also, on July 1, 2022, immediately
following the acquisition of CarVal, AB Holding contributed 100% of its equity interests in CarVal to AB in exchange for AB
Units. Post-acquisition, CarVal was rebranded AB CarVal Investors (“AB CarVal”).
On the acquisition date, AB Holding issued approximately 3.2 million AB Holding Units (with a fair value of $132.8 million) with
the remaining 12.1 million Units (with a fair value of $456.4 million) issued on November 1, 2022. The fair value of the units
issued on November 1, 2022 reflect final adjustments to the estimated unit issuance recorded as of acquisition close on July 1,
2022 and as disclosed in the third quarter 2022 Form 10-Q.
2023 Annual Report
125
Part II
AB received a 100% equity interest in CarVal from AB Holding and issued approximately 15.3 million AB Units (with a fair value
of $589.2 million). AB also recorded a contingent consideration payable of $228.9 million (to be paid predominantly in AB Units)
based on AB CarVal achieving certain performance objectives over a six-year period ending December 31, 2027. The AB Units,
as discussed above, were issued to AB Holding; AB Holding then issued the equal amount of AB Holding Units to CarVal. The
excess of the purchase price over the current fair value of identifiable net liabilities acquired of $156.1 million (net of cash
acquired of $40.8 million), and the recording of a net deferred tax asset of $5.1 million resulted in the recognition of
$666.1 million of goodwill and the recording of $303.0 million of finite-lived intangible assets primarily relating to investment
management contracts and investor relationships with useful lives ranging from 5 to 10 years. The goodwill recorded is not
deductible for tax purposes as the CarVal acquisition was an investment in a partnership.
The following table summarizes the amounts of identified assets acquired and liabilities assumed at the acquisition date
(reflecting acquisition adjustments recorded in the fourth quarter of 2022), as well as the consideration transferred to acquire
CarVal (in thousands):
Summary of purchase consideration:
Fair value of AB Holding units issued
Fair value of contingent consideration
Total purchase consideration
Purchase price allocation:
Assets acquired:
Cash and cash equivalents
Receivables, net
Investments - other
Furniture, equipment, and leasehold improvements, net
Right-of-use assets
Other assets
Deferred tax asset
Intangible assets
Goodwill
Total assets acquired
Liabilities assumed:
Accounts payable and accrued expenses
Accrued compensation and benefits
Debt
Lease liabilities
Non-redeemable non-controlling interests in consolidated entities
Total liabilities assumed
Net assets acquired
$ 589,169
228,885
$ 818,054
$
40,777
82,523
947
2,464
16,482
10,600
5,073
303,000
666,130
1,127,996
(17,793)
(219,726)
(42,661)
(16,571)
(13,191)
(309,942)
$ 818,054
The CarVal acquisition did not have a significant impact on our 2022 revenues and earnings. As a result, we have not provided
supplemental pro forma financial information.
126
AllianceBernstein
Part II
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure
Neither AB nor AB Holding had any changes in or disagreements with accountants in respect of accounting or
financial disclosure.
Item 9A. Controls and Procedures
Disclosure Controls and Procedures
Each of AB Holding and AB maintains a system of disclosure controls and procedures that is designed to ensure that
information required to be disclosed in our reports under the Exchange Act is (i) recorded, processed, summarized and reported
in a timely manner, and (ii) accumulated and communicated to management, including the Chief Executive Officer (“CEO”) and
the Interim Chief Financial Officer (“CFO”), to permit timely decisions regarding our disclosure.
As of the end of the period covered by this report, management carried out an evaluation, under the supervision and with the
participation of the CEO and the CFO, of the effectiveness of the design and operation of disclosure controls and procedures.
Based on this evaluation, the CEO and the CFO concluded that the disclosure controls and procedures are effective.
Management’s Report on Internal Control Over Financial Reporting
Management acknowledges its responsibility for establishing and maintaining adequate internal control over financial reporting
for each of AB Holding and AB.
Internal control over financial reporting is a process designed by, or under the supervision of, a company’s CEO and CFO, to
provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with accounting principles generally accepted in the United States of America (“US GAAP”)
and includes those policies and procedures that:
• Pertain to the maintenance of records that,
in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company;
• Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in
accordance with US GAAP and receipts and expenditures of the company are being made only in accordance with
authorizations of management and directors of the company; and
• Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the
company’s assets that could have a material effect on the financial statements.
All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those internal control
systems determined to be effective can provide only reasonable assurance with respect to the reliability of financial statement
preparation and presentation. Because of these inherent limitations, internal control over financial reporting may not prevent or
detect misstatements. Projections of any evaluation of effectiveness of internal control to future periods are subject to the risk
that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.
Management assessed the effectiveness of AB Holding’s and AB’s internal control over financial reporting as of December 31,
2023. In making its assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the
Treadway Commission in Internal Control-Integrated Frameworkrr
(2013) (the “COSO criteria”).
Based on its assessment, management concluded that, as of December 31, 2023, each of AB Holding and AB maintained
effective internal control over financial reporting based on the COSO criteria.
PricewaterhouseCoopers LLP (PCAOB ID No. 238), the independent registered public accounting firm that audited the 2023
financial statements included in this Form 10-K, has issued an attestation report on the effectiveness of each of AB Holding’s
and AB’s internal control over financial reporting as of December 31, 2023. The reports pertaining to AB Holding and AB each
can be found in Item 8 of this Form 10-K.
2023 Annual Report
127
Part II
Changes in Internal Control Over Financial Reporting
No changes in our internal control over financial reporting occurred during the fourth quarter of 2023 that materially affected, or
are reasonably likely to materially affect, our internal control over financial reporting.
Item 9B. Other Information
Both AB and AB Holding reported all information required to be disclosed on Form 8-K during the fourth quarter of 2023.
Pursuant to Item 408(a) of Regulation S-K, there were no directors or officers that had adopted or terminated a 10b5-1 plan or
other trading arrangement during the fourth quarter of 2023.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent
Inspections
Not applicable.
128
AllianceBernstein
Part III
Item 10. Directors, Executive Officers and Corporate Governance
We use “Internet Site” in Items 10 and 11 to refer to our company’s public website, www.alliancebernsrr
tein.com.
To contact our company’s Corporate Secretary, you may send an email to corporate_secretary@r
to Corporate Secretary, AllianceBernstein L.P., 501 Commerce Street, Nashville, Tennessee 37203.
alliancebernsrr
tein.com or write
General Partner
The Partnerships’ activities are managed and controlled by the General Partner. The Board of the General Partner acts as the
Board of each of the Partnerships. Neither AB Unitholders nor AB Holding Unitholders have rights to manage or control the
Partnerships or to elect directors of the General Partner. The General Partner is a wholly owned subsidiary of EQH.
The General Partner does not receive any compensation from the Partnerships for services rendered to them as their general
partner. The General Partner holds a 1% general partnership interest in AB and 100,000 units of general partnership interest in
AB Holding. Each general partnership unit in AB Holding is entitled to receive distributions equal to those received by each AB
Holding Unit. Similarly, the 1% general partnership interest in AB is entitled to receive distributions equal to those received by
each AB Unit.
The General Partner is entitled to reimbursement by AB for any expenses it incurs in carrying out its activities as general partner
of the Partnerships, including compensation paid by the General Partner to its directors and officers (to the extent such persons
are not compensated directly by AB).
Board of Directors
Our Board consists of 9 directors, including five independent directors (including our Chair of the Board), our President and
CEO, and three senior executives of EQH. While we do not have a formal, written diversity policy in place, we believe that an
effective board consists of a diverse group of individuals who collectively possess a variety of complementary skills, personal
experiences and perspectives and who will work together to provide a board with the needed leadership and experience to
successfully guide our company. As set forth in its charter, the Corporate Governance Committee of the Board (the
“Governance Committee”) assists the Board in identifying and evaluating such candidates, determining Board composition,
developing and monitoring a process to assess Board effectiveness, developing and implementing corporate governance
guidelines, and reviewing programs relating to matters of corporate responsibility.
As we indicate below,w our directors have a combined wealth of leadership experience derived from extensive service leading
large, complex organizations in their roles as either senior executives or board members, as well as in government and
academia. Each of our directors has the integrity, business judgment, collegiality and commitment that are among the essential
characteristics for a member of our Board. Collectively, they have substantive knowledge and skills applicable to our business,
including expertise in areas such as asset management; regulation; public accounting and financial reporting; finance; risk
management; business development; operations;
information technology and security; strategic planning; management
development, succession planning and compensation; corporate governance; public policy; and international matters.
2023 Annual Report
129
Part III
Board Committees
(cid:30)(cid:74)(cid:55)(cid:53)(cid:71)(cid:70)(cid:59)(cid:72)(cid:55)
(cid:28)(cid:65)(cid:63)(cid:63)(cid:59)(cid:70)(cid:70)(cid:55)(cid:55)
(cid:26)(cid:71)(cid:54)(cid:59)(cid:70) (cid:51)(cid:64)(cid:54) (cid:43)(cid:59)(cid:69)(cid:61)
(cid:28)(cid:65)(cid:63)(cid:63)(cid:59)(cid:70)(cid:70)(cid:55)(cid:55)
(cid:28)(cid:65)(cid:68)(cid:66)(cid:65)(cid:68)(cid:51)(cid:70)(cid:55) (cid:32)(cid:65)(cid:72)(cid:55)(cid:68)(cid:64)(cid:51)(cid:64)(cid:53)(cid:55)
(cid:28)(cid:65)(cid:63)(cid:63)(cid:59)(cid:70)(cid:70)(cid:55)(cid:55)
(cid:28)(cid:65)(cid:63)(cid:66)(cid:55)(cid:64)(cid:69)(cid:51)(cid:70)(cid:59)(cid:65)(cid:64) (cid:51)(cid:64)(cid:54)
(cid:48)(cid:65)(cid:68)(cid:61)(cid:66)(cid:62)(cid:51)(cid:53)(cid:55) (cid:41)(cid:68)(cid:51)(cid:53)(cid:70)(cid:59)(cid:53)(cid:55)(cid:69)
(cid:28)(cid:65)(cid:63)(cid:63)(cid:59)(cid:70)(cid:70)(cid:55)(cid:55)
M
M
Joan Lamm-Tennant
Seth Bernstein
Jeffrey Hurd
Daniel Kaye
Nick Lane
Das Narayandas
Mark Pearson
Charles Stonehill
Todd Walthall
Chairperson
M
Member
Board Diversity Matrix
Gender Diversity
Directors
Racial/Ethnic/Nationality/Other Forms of Diversity
African American/Black
Alaskan Native/Native American
Asian/South Asian
Hispanic/Latinx
Native Hawaiian/Pacific Islander
White/Caucasian
LGBTQ+
Directors Born Outside of the US
Did Not Disclose Demographics
130
AllianceBernstein
M
M
M
M
M
M
Female
Male Non-Binary Did Not Disclose Gender
1
—
—
—
—
—
1
—
—
—
8
1
—
1
—
—
6
—
3
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Board of Directors
Part III
Joan Lamm-Tennant
Chair of the Board,
Equitable Holdings
Seth Bernstein
President and Chief Executive
Officer, AllianceBernstein
Jeffrey Hurd
Chief Operating Officer,
Equitable Holdings
Daniel Kaye
Director, CME Group (NASDAQ:
CME), and Equitable Holdings
Committees:
Executive (Chair)
Age: 71
Director Since: 2021
Committees:
Executive
Governance
Age: 62
Director Since: 2017
Committees:
None
Age: 57
Director Since: 2019
Committees:
Compensation
Age: 69
Director Since: 2017
Nick Lane
President, Equitable Financial
Life Insurance Company
Committees:
None
Age: 50
Director Since: 2019
Das Narayandas
Edsel Bryant Ford Professor of
Business Administration,
Harvard Business School
Committees:
Governance (Chair)
Age: 63
Director Since: 2017
Mark Pearson
President and Chief Executive
Officer, Equitable Holdings
Committees:
Executive
Governance
Compensation
Age: 65
Director Since: 2011
Charles Stonehill
Founding Partner, Green &
Blue Advisors; Director,
Equitable Holdings
Committees:
Audit (Chair)
Compensation (Chair)
Age: 65
Director Since: 2019
Todd Walthall
Chief Executive for Optum
Insight (Payer Market),
UnitedHealth Group
Committees:
Audit
Corporate Governance
Age: 53
Director Since: 2021
2023 Annual Report
131
Part III
As of February 9, 2024, our directors are as follows:
Background
• Ms. Lamm-Tennant was appointed Chair of AB in October 2021.
• She has served as Chair of the Board of EQH, Equitable Financial and Equitable America since
October 2021, after having joined these boards in January 2020.
• Ms. Lamm-Tennant founded Blue Marble Microinsurance and served as its CEO from 2015
to 2020.
• She currently is executive advisor of Brewer Lane Ventures, having joined in 2021; she serves
on the boards of Ambac Financial Group and Element Fleet Financial Corp; and she joined the
board of Africa Specialty Risk in April 2023.
• Previously, Ms. Lamm-Tennant was Adjunct Professor, International Business at The Wharton
School of the University of Pennsylvania from 2005 to 2016. Prior to or concurrently with her
service at The Wharton School, Ms. Lamm-Tennant held various senior positions in the
insurance industry, including with Marsh & McLennan Companies, Guy Carpenter and General
Reinsurance Corporation.
Director Qualifications
Ms. Lamm-Tennant brings to the Board significant industry and academic experience, having held
global business leadership roles and developed a distinguished career as a professor of finance
and economics.
Background
• Mr. Bernstein was appointed President and Chief Executive Officer in April 2017 and began
serving in this role on May 1, 2017.
• He has served as Senior Executive Vice President and Head of Investment Management and
Research of EQH since April 2018 and is a member of the Management Committee of EQH.
• Previously, Mr. Bernstein had a distinguished 32-year career at JPMorgan Chase, most
recently as Managing Director and Global Head of Managed Solutions and Strategy at J.P.
Morgan Asset Management. In this role, Mr. Bernstein was responsible for the management of
all discretionary assets within the Private Banking client segment.
• Among other roles, he served as Managing Director and Global Head of Fixed Income and
Currency for 10 years, concluding in 2012.
• Mr. Bernstein held the position of Chief Financial Officer at JPMorgan Chase’s Investment
Management and Private Banking division.
• Mr. Bernstein is a member of the Investment Committee of the Board of Managers of
Haverford College, Pennsylvania, a Board of Trustees member of the Brookings Institution and
a member of the Council on Foreign Relations.
Director Qualifications
Mr. Bernstein brings to the Board the diverse financial services experience he developed through
his extensive service at JPMorgan Chase and more recent career at AB.
Joan Lamm-
Tennant
Committees: Executive
(Chair)
Age: 71
Director Since: 2021
Seth Bernstein
Committees: Executive,
Governance
Age: 62
Director Since: 2017
132
AllianceBernstein
Part III
Background
• Mr. Hurd was appointed a director of AB in April 2019.
• He has served as Chief Operating Officer of EQH, and as a member of the EQH Management
Committee, since 2018.
•
In this role, Mr. Hurd has strategic oversight for EQH’s Human Resources, Information
Technology, Insurance Operations and Communications departments.
• He also is responsible for other key functional areas, including procurement and corporate
real estate.
• Mr. Hurd also has served as Chief Operating Officer of Equitable Financial since 2018.
• Prior to joining Equitable, Mr. Hurd served as Executive Vice President and Chief Operating
Inc. (“AIG”), where he amassed deep financial
Officer at American International Group,
services industry experience during his 20-year tenure. While at AIG, Mr. Hurd served as Chief
Human Resources Officer, Chief Administrative Officer, Deputy General Counsel and Head of
Asset Management Restructuring.
• Mr. Hurd joined the board of the Thurgood Marshall College Fund in May 2023.
Director Qualifications
Mr. Hurd brings to the Board his extensive experience in financial services and strategic insights
as a senior executive at EQH and, formerly, at AIG.
Background
• Mr. Kaye was appointed a director of AB in April 2017.
• He has been a director of EQH since May 2018 and a director of Equitable Financial and
Equitable America since September 2015.
• Also, since May 2019, Mr. Kaye has been a director of CME Group, Inc. (NASDAQ: CME), where
he serves as Chair of the Audit Committee and serves on the Executive and Risk Committees.
• From January 2013 to May 2014, Mr. Kaye served as interim Chief Financial Officer and
Treasurer of HealthEast Care System. He held this post after retiring in 2012 from his career at
Ernst & Young LLP (“E&Y”).
• He served for 35 years at E&Y, including 25 years as an audit partner.
• During his tenure at E&Y, Mr. Kaye served as the New England Area Managing Partner and
the Midwest Area Managing Partner of Assurance.
• Mr. Kaye is a Certified Public Accountant and a National Association of Corporate Directors
Board Leadership Fellow.
Director Qualifications
Mr. Kaye brings to the Board the extensive financial and regulatory expertise he developed
through his career at E&Y and his directorships at CME, EQH and certain of EQH’s subsidiaries.
Jeffrey Hurd
Committees: None
Age: 57
Director Since: 2019
Daniel Kaye
Committees:
Compensation
Age: 69
Director Since: 2017
2023 Annual Report
133
Background
• Mr. Lane was appointed a director of AB in April 2019.
• He has served as Head of Retirement, Wealth Management & Protection Solutions of EQH, and
as a member of the EQH Management Committee, since May 2018.
• Also, since February 2019, Mr. Lane has served as President of Equitable Financial, leading
that company’s Retirement, Wealth Management & Protection Solutions businesses and also
leading its Marketing and Digital functions.
• Mr. Lane held various leadership roles with AXA and Equitable Financial since joining Equitable
Financial (then a subsidiary of AXA) in 2005 as Senior Vice President of the Strategic
Initiatives Group.
• He has served as President and CEO of AXA Japan, Senior Executive Director at Equitable
Financial with responsibilities across commercial divisions, and Head of AXA Global
Strategy overseeing AXA’s five-year strategic plan across 60 countries.
• Prior to joining Equitable Financial, Mr. Lane was a consultant for McKinsey & Company and a
Captain in the United States Marine Corps.
• Mr. Lane joined the board of
the American Counsel of Life Insurers ("ACLI")
in
September 2023.
Director Qualifications
Mr. Lane brings to the Board the outstanding experience and leadership qualities he has
developed in various senior roles at AXA S.A., EQH and various subsidiaries, and as an officer in
the United States Marine Corps.
Background
• Mr. Narayandas was appointed a director of AB in November 2017.
• He is the Edsel Bryant Ford Professor of Business Administration at Harvard Business School
(“HBS”), where he has been a faculty member since 1994.
• Mr. Narayandas also currently serves as the Senior Associate Dean and Chairman of
Harvard Business School Publishing, and as the Senior Associate Dean of HBS
External Relations.
• He previously served as the senior associate dean of HBS Executive Education, and as chair
of the HBS Executive Education Advanced Management Program and the Program for
Leadership Development, as well as course head of the required first-year marketing course
in the MBA program.
• Mr. Narayandas has received the award for teaching excellence from the graduating HBS MBA
class on several occasions. Other awards he has received include the Robert F. Greenhill
Award for Outstanding Service to the HBS Community, the Charles M. Williams Award for
Excellence in Teaching and the Apgar Award for Innovation in Teaching.
• His scholarship has focused on market-facing issues in traditional business-to-business
marketing and professional service firms, including client management strategies, delivering
service excellence, product-line management and channel design.
Director Qualifications
Mr. Narayandas brings to the Board his wealth of experience at the highest level of academia in
the U.S.
Part III
Nick Lane
Committees: None
Age: 50
Director Since: 2019
Das Narayandas
Committees: Governance
(Chair)
Age: 63
Director Since: 2017
134
AllianceBernstein
Part III
Background
• Mr. Pearson was appointed a director of AB in February 2011.
• He has served as President and Chief Executive Officer of EQH since May 2018.
• Mr. Pearson also serves as a member of EQH’s Management Committee.
• Additionally, Mr. Pearson serves as CEO of Equitable Financial and Equitable America, and he
has been a director of both companies since 2011.
• Mr. Pearson joined AXA S.A. in 1995 when it acquired National Mutual Funds Management
Limited (presently AXA Asia Pacific Holdings Limited) and was appointed Regional Chief
Executive of AXA Asia Life in 2001.
• From 2008 to 2011, Mr. Pearson was President and Chief Executive Officer of AXA Japan
Holding Co., Ltd. (“AXA Japan”).
• Prior to joining AXA S.A., Mr. Pearson spent approximately 20 years in the insurance sector,
holding several senior management positions at Hill Samuel, Schroders, National Mutual
Holdings and Friends Provident.
• Mr. Pearson is a Fellow of the Chartered Public Association of Certified Public Accountants.
Director Qualifications
Mr. Pearson brings to the Board the diverse financial services experience he has developed
through his service as an executive, including as Chief Executive Officer, with EQH, AXA Japan
and other affiliates of AXA S.A.
Background
• Mr. Stonehill was appointed a director of AB in April 2019.
• He has been a director and member of various board committees at EQH and Equitable
America since March 2019, and at Equitable Financial since November 2017.
• Mr. Stonehill has served as a member of the supervisory board of Deutsche Boerse AG, a
capital market infrastructure provider, since 2019. Additionally, Mr. Stonehill joined the board
of Strangeworks, Inc. in October 2023.
•
In addition, Mr. Stonehill is the Founding Partner of Green & Blue Advisors LLC, having started
this advisory firm that provides financial advice to clean-tech and other environmentally-
minded companies in 2011.
• He formerly was a director of Play Magnus AS, a chess app company, from 2016 to 2021, and
non-executive vice chairman of Julius Baer Group Ltd., a global private banking company
based in Switzerland, from 2009 to 2021.
• Mr. Stonehill has over 30 years' experience in energy markets, investment banking and capital
markets, including leadership positions at Lazard Freres & Co. LLC, Credit Suisse and Morgan
Stanley & Co.
Mark Pearson
Committees: Executive,
Governance,
Compensation
Age: 65
Director Since: 2011
Charles Stonehill
Committees: Audit (Chair),
Compensation (Chair)
Age: 65
• He also served as Chief Financial Officer at Better Place Inc., an electric vehicle start-up, from
Director Since: 2019
2009 to 2011, where he oversaw global financial strategy and capital raising.
Director Qualifications
Mr. Stonehill brings to the Board his extensive expertise and distinguished track record in the
financial services industry and over 30 years' experience in energy markets, investment banking
and capital markets.
2023 Annual Report
135
Part III
Todd Walthall
Committees: Audit,
Governance
Age: 53
Director Since: 2021
Background
• Mr. Walthall was appointed a director of AB in September 2021.
• He is a senior executive with United Health Group, an American multinational managed
healthcare and insurance company, currently serving as Chief Executive Officer of Clinical
Solutions for Optum Insight; formerly as Executive Vice President of Enterprise Growth.
• Previously, he served as Executive Vice President and Chief Operating Officer at Blue Shield
of California.
• Prior to Blue Shield, he served as Vice President and General Manager of Digital Service
Integration at American Express. Before joining AMEX, Mr. Walthall held numerous senior roles
with USAA Insurance, having contributed to the development of the industry's first mobile
check-deposit service.
• He was the recipient of the 2016 Multicultural Leaders of California award from the National
Diversity Council, and in 2020 was named one of the Most Influential Black Executives in
Corporate America by Savoy Magazine.
• Mr. Walthall serves on the Executive Leadership Council, a professional organization, and is on
the Board of Trustees of Coaching Corps.
Director Qualifications
Mr. Walthall brings over two decades of leadership experience with growth strategy, operations,
product development, and customer service and retention programs through his extensive
experience in numerous leadership roles throughout his career.
136
AllianceBernstein
Part III
Executive Officers (other than Mr. Bernstein)
Bill Siemers, Interim CFO
Mr. Siemers, age 63, was appointed as Interim Chief Financial Officer in June 2023. Mr. Siemers joined the firm in 2004 as
Director of Financial Reporting. He briefly assumed the position of Interim Chief Financial Officer in March 2022, serving in that
capacity until July 2022 when he relinquished the CFO title until he was re-appointed in June 2023. Prior to joining AB, Mr.
Siemers held various finance positions at Altria and as an auditor at Deloitte.
Karl Sprules, COO
Mr. Sprules, age 50, was appointed Chief Operating Officer in June 2023, formerly Head of Global Technology & Operations
since 2019. In his role as COO, Mr. Sprules oversee's the firm's Global Technology and Operations, Real Estate, Legal &
Compliance, Diversity, Equity & Inclusion and Corporate Citizenship, Audit and Risk. He joined AB's technology department in
1998 as a senior systems engineer in the firm's London office. From 2012 to 2020, Mr. Sprules served as AB's chief technology
officer, and since 2018 he has led the relocation of AB's Technology & Operations department to the firm's new Nashville
headquarters. In 2012, Mr. Sprules became head of Infrastructure Services for Equities, managing investment operations,
operational risk and technology teams. From 2005 to 2012, Mr. Sprules led technology for AB's Private Wealth, Institutional and
Client groups. Before joining AB, Mr. Sprules held research analyst positions in cellular and defense product development.
Onur Erzan, Head of Global Client Group and Private Wealth
Mr. Erzan, age 48, joined our firm in 2021 as Head of Global Client Group and was named Head of Private Wealth in July 2022.
In this role, he oversees AB's entire private wealth management business and third-party institutional and retail franchise, where
he is responsible for all client services, sales and marketing, as well as product strategy, management and development
worldwide. Prior to joining AB, Mr. Erzan spent over 19 years with McKinsey, most recently as a senior partner and co-leader of
its Wealth & Asset Management practice. In addition, Mr. Erzan co-led McKinsey's Banking & Securities Solutions (a portfolio of
data, analytics and digital assets and capabilities) globally. He has been active in nonprofit organizations for the last several
years and has served on the boards of Graham Windham and Turkish Philanthropy Funds.
Mark Manley, General Counsel and Corporate Secretaryr
Mr. Manley, age 61, joined the firm in 1984 and currently serves as Senior Vice President, General Counsel and Corporate
Secretary. He served as Deputy General Counsel from June 2004 to December 2021 and served as the firm’s Global Head of
Compliance from 1988 until November 2023. He chairs AB’s Code of Ethics Oversight Committee and is a member of AB’s
Internal Compliance Controls Committee and nearly all of the firm’s senior operating, risk and compliance committees.
Chris Hogbin, Global Head of Investments
Mr. Hogbin, age 50, was appointed Global Head of Investments in January 2024. In this broad leadership role, he oversees all
the firm’s investment activities with responsibility for driving investment success across asset classes, fostering collaboration
and sharing best practices across investment teams, as well as leveraging a common infrastructure and evaluating
opportunities to invest in capabilities that deliver better outcomes for clients. Mr. Hogbin joined AB’s institutional research
business in 2005 as a senior analyst covering the European food retail sector, was named to Institutional Investor’s All-Europe
Research Team and was ranked as the #1 analyst in his sector. He became European director of research for the Sell Side in
2012 and was given additional responsibility for Asian research in 2016. In 2018, he was appointed COO of Equities for AB. In
2019, Mr. Hogbin was promoted to co-head of Equities, becoming head of Equities in 2020. Prior to joining the firm, he worked
as a strategy consultant for the Boston Consulting Group. He is chair of the Caius Foundation and is involved in several
nonprofit organizations.
Cathy Spencer, Chief People Offiff cer
Ms. Spencer, age 57, is the Chief People Officer for AB, and leads the teams responsible for advancing the employee experience
for all of AB's people. Ms. Spencer’s responsibilities include oversight of the following functions,
including benefits,
learning and engagement, talent acquisition and management, and onsite
compensation, employee relations, culture,
excellence. Ms. Spencer’s responsibilities extend throughout the firm's global footprint, serving more than 4,000 staff
members. Since 2018 she has overseen the transition of US staff to the firm's new Nashville headquarters as well as the
recruiting and onboarding of local hires. Ms. Spencer joined AB in 1997 and has held a variety of roles, from overseeing talent
and organizational development to managing employee relations, both globally. She was promoted to senior vice president in
2008, when she assumed the role of Head of Human Resources, a position she held for 10 years.
2023 Annual Report
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Part III
Kate Burke, Former COO and CFO
Ms. Burke, age 52, resigned as our firm's COO and CFO effective May 31, 2023. She had been appointed Chief Financial Officer
in July 2022 while retaining her role as Chief Operating Officer, which she became in July 2020. Ms. Burke served as Head of
our firm's Private Wealth channel from February 2021 to June 2022; she was appointed Chief Administrative Officer in May
2019. Previously, she served as Head of Human Capital and Chief Talent Officer from February 2016 to May 2019. Ms. Burke
joined our firm in 2004 as an institutional equity salesperson with Bernstein Research Services and has held various managerial
roles since that time.
Changes in Directors and Executive Officers
The following changes in our directors and executive officers occurred since we filed our Form 10-K for the year ended
December 31, 2022:
Directors
• Kristi Matus departed the Board, effective May 24, 2023.
• Nella Domenici departed the Board, effective January 16, 2024.
Executive Officers
• Ms. Burke resigned as COO and CFO effective May 31, 2023.
• Mr. Siemers was appointed as Interim CFO effective June 1, 2023.
• Mr. Sprules was appointed COO effective June 1, 2023.
• Mr. Hogbin was appointed as Global Head of Investments effective January 1, 2024, a newly created position as an
executive officer.
• Ms. Spencer was named an executive officer effective January 16, 2024 retaining her title as Chief People Officer.
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(cid:41)(cid:51)(cid:68)(cid:70) (cid:34)(cid:34)(cid:34)
(cid:26)(cid:65)(cid:51)(cid:68)(cid:54) (cid:37)(cid:55)(cid:55)(cid:70)(cid:59)(cid:64)(cid:57)(cid:69)
In 2023, the Board held regular meetings in February, May, September and November.
The Board has established a calendar consisting of four regular meetings, which typically are held in February, May, September
and November. In addition, the Board holds special meetings or takes action by unanimous written consent as circumstances
warrant. The Board has standing Executive, Audit and Risk, Compensation and Workplace Practices, and Governance
Committees, each of which is (cid:51)(cid:52)(cid:66)(cid:50)(cid:65)(cid:56)(cid:49)(cid:52)(cid:51) (cid:56)(cid:61) (cid:53)(cid:68)(cid:65)(cid:67)(cid:55)(cid:52)(cid:65) (cid:51)(cid:52)(cid:67)(cid:48)(cid:56)(cid:59) (cid:49)(cid:52)(cid:59)(cid:62)(cid:70). Each member of the Board attended 75% or more of the
aggregate of all Board and committee meetings that he or she was entitled to attend in 2023.
(cid:27)(cid:65)(cid:63)(cid:63)(cid:59)(cid:70)(cid:70)(cid:55)(cid:55)(cid:69) (cid:65)(cid:56) (cid:70)(cid:58)(cid:55) (cid:26)(cid:65)(cid:51)(cid:68)(cid:54)
(cid:4)(cid:6)(cid:12)(cid:11)(cid:10)(cid:9)(cid:12)(cid:7)(cid:5)(cid:7)(cid:8)(cid:7)(cid:13)(cid:7)(cid:6)(cid:12)(cid:2)
• Exercises all of the powers and authority of the Board (with limited exceptions)
when the Board is not in session, or when it is impractical to assemble the
full Board.
(cid:30)(cid:74)(cid:55)(cid:53)(cid:71)(cid:70)(cid:59)(cid:72)(cid:55) (cid:28)(cid:65)(cid:63)(cid:63)(cid:59)(cid:70)(cid:70)(cid:55)(cid:55)
• Typically, determines quarterly unitholder distributions, as applicable.
Committee Members:
(cid:35)(cid:65)(cid:51)(cid:64) (cid:37)(cid:51)(cid:63)(cid:63)(cid:12)(cid:45)(cid:55)(cid:64)(cid:64)(cid:51)(cid:64)(cid:70) (cid:8)(cid:28)(cid:58)(cid:51)(cid:59)(cid:68)(cid:9)
(cid:44)(cid:55)(cid:70)(cid:58) (cid:27)(cid:55)(cid:68)(cid:64)(cid:69)(cid:70)(cid:55)(cid:59)(cid:64)
(cid:38)(cid:51)(cid:68)(cid:61) (cid:41)(cid:55)(cid:51)(cid:68)(cid:69)(cid:65)(cid:64)
Meetings in 2023: (cid:19)
(cid:4)(cid:6)(cid:12)(cid:11)(cid:10)(cid:9)(cid:12)(cid:7)(cid:5)(cid:7)(cid:8)(cid:7)(cid:13)(cid:7)(cid:6)(cid:12)(cid:2)
• Assist the Board in its oversight of:
(cid:26)(cid:71)(cid:54)(cid:59)(cid:70) (cid:51)(cid:64)(cid:54) (cid:43)(cid:59)(cid:69)(cid:61)
(cid:28)(cid:65)(cid:63)(cid:63)(cid:59)(cid:70)(cid:70)(cid:55)(cid:55)
Committee Members:
(cid:28)(cid:58)(cid:51)(cid:68)(cid:62)(cid:55)(cid:69) (cid:44)(cid:70)(cid:65)(cid:64)(cid:55)(cid:58)(cid:59)(cid:62)(cid:62) (cid:8)(cid:28)(cid:58)(cid:51)(cid:59)(cid:68)(cid:9)
(cid:45)(cid:65)(cid:54)(cid:54) (cid:48)(cid:51)(cid:62)(cid:70)(cid:58)(cid:51)(cid:62)(cid:62)
Meetings in 2023: (cid:23)
•
•
•
•
•
the integrity of the financial statements of the Partnerships;
the effectiveness of the Partnerships' internal control over financial reporting
and
risk
risk management
mitigation processes;
Partnerships'
framework
and
the
the Partnerships’ status and system of compliance with legal and regulatory
requirements and business conduct;
the independent
independence; and
registered public accounting firm’s qualification and
the performance of the Partnerships’ internal audit function.
• Oversee the appointment, retention, compensation, evaluation and termination of
the Partnerships’ independent registered public accounting firm.
• Oversee management’s development of a comprehensive set of metrics for
evaluating the firm’s ESG objectives and monitor management’s progress in
pursing those objectives.
• Encourages continuous improvement of, and fosters adherence to,
the
Partnerships’ policies, procedures and practices at all levels.
• Provides an open avenue of communication among the independent registered
public accounting firm, senior management, the Internal Audit Department, the
Global Head of Compliance, the Chief Risk Officer and the Board.
(cid:17)(cid:15)(cid:17)(cid:18) (cid:26)(cid:64)(cid:64)(cid:71)(cid:51)(cid:62) (cid:43)(cid:55)(cid:66)(cid:65)(cid:68)(cid:70)
(cid:16)(cid:18)(cid:24)
Responsibilities:
• Assists the Board and the sole stockholder of the General Partner in:
•
identifying and evaluating qualified individuals to become Board members; and
• determining the composition of the Board and its committees.
• Assists the Board in:
• developing and monitoring a process to assess Board effectiveness;
• developing and implementing our Corporate Governance Guidelines; and
•
reviewing our policies and programs that
responsibility of the General Partner and the Partnerships.
relate to matters of corporate
For a discussion of the Compensation Committee's responsibilities, please see
is - Compensation Committee; Process for
“Compensation Discussion and Analysl
Determining Executive Compensation” in Item 11.
Part III
Governance Committee
Committee Members:
Das Narayandas (Chair)
Seth Bernstein
Mark Pearson
Todd Walthall
Meetings in 2023: 1
Compensation and
Workplace Practices
Committee
Committee Members:
Charles Stonehill(Chair)
Daniel Kaye
Mark Pearson
Meetings in 2023: 5
The functions of each of the Board committees discussed above are more fully described in each committee’s charter. The
charters are available in the "Responsibility - Corporate Governance" section of our Internet Site.
Independence of Certain Directors
In February 2023, the Governance Committee, after reviewing materials prepared by management, recommended that the
Board determine that each of Mses. Domenici and Lamm-Tennant and Messrs. Kaye, Narayandas, Stonehill and Walthall is
independent. The Board determined, at its February 2023 regular meeting, that each of these directors is independent (each an
"Independent Director") within the meaning of the relevant rules.
Audit Committee Financial Experts; Financial Literacy
Audit Committee Financial Expertise
In February 2023, the Governance Committee, after reviewing materials prepared by management, recommended that the
Board determine that each of Mses. Domenici and Lamm-Tennant and Messrs. Kaye and Stonehill is an “audit committee
financial expert” within the meaning of Item 407(d) of Regulation S-K. The Board so determined at its regular meeting held in
February 2023.
Financial Literacy
In February 2023, the Governance Committee, after reviewing materials prepared by management, recommended that the
Board determine that each Independent Director is financially literate and possesses accounting or related financial
management expertise, as contemplated by Section 303A.07(a) of the NYSE Listed Company Manual (“Financially Literate”).
The Board so determined at its regular meeting held in February 2023.
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Part III
Board Leadership Structure and Role in Risk Oversight
Leadership
The Board, together with the Governance Committee,
In
determining the appropriate individuals to serve as our Chair and our CEO, the Board and the Governance Committee consider,
among other things, the composition of the Board, our company’s strong corporate governance practices, and the challenges
and opportunities specific to AB.
is responsible for reviewing the Board’s leadership structure.
Contacting our Board
Interested parties wishing to communicate directly with our Chair or the other members of our Board may send an e-mail, with
“confidential” in the subject line, to our Corporate Secretary or address mail to Ms. Lamm-Tennant in care of our Corporate
Secretary. Our Corporate Secretary will promptly forward such e-mail or mail to Ms. Lamm-Tennant. We have posted this
information in the “Responsibility - Corporate Governance” section of our Internet Site.
Risk Oversight
Board of Directors
The Board, together with the Audit Committee, has oversight for our company’s risk management framework, which
includes investment risk, credit and counterparty risk, and operational risk (includes legal/regulatory risk, cyber security risk
and climate risk), and is responsible for helping to ensure that these risks are managed in a sound manner.
q
Audit Committee
The Board has delegated to the Audit Committee, which consists entirely of independent directors, the responsibility to
consider our company’s policies and practices with respect to investment, credit and counterparty, and operational risk
assessment and risk management, including discussing with management the major financial, operational and reputational
risk exposures and the steps taken to monitor and control such exposures.
Risk Management Team
p
Chief Risk Officer
mbers of the company's risk management team (including our Chief
Security Officer), who are responsible for identifying, managing and controlling
the array of risks inherent in our company’s business and operations, make
quarterly reports to the Audit Committee, which address investment, credit and
counterparty, and operational risk identification, assessment and monitoring.
The Chief Risk Officer makes
quarterly presentations to the Audit
Committee and has reporting lines
to the CEO and the Audit Committee.
u
The Board has determined that its leadership and risk oversight are appropriate for our company. Mr. Bernstein’s in-depth
knowledge of financial services and extensive executive experience in the investment management industry make him well-
suited to serve as our President and CEO, while Ms. Lamm-Tennant’s in-depth industry and academic experience are invaluable
at enhancing the overall functioning of the Board. The Board believes that the combination of a separate Chair and CEO, the
Audit Committee, a specialized risk management team and significant involvement from our largest Unitholder (EQH) provide
the appropriate leadership to help ensure effective risk oversight.
2023 Annual Report
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Part III
Code of Ethics and Related Policies
Our directors, officers and employees are subject to our Code of Business Conduct and Ethics (the "Code of Ethics"). The Code
of Ethics is intended to comply with Section 303A.10 of the NYSE Listed Company Manual, Rule 204A-1 under the Investment
Advisers Act and Rule 17j-1 under the Investment Company Act, as well as with recommendations issued by the Investment
Company Institute regarding, among other things, practices and standards with respect to securities transactions of investment
professionals. The Code of Ethics establishes certain guiding principles for all of our employees, including sensitivity to our
fiduciary obligations and ensuring that we meet those obligations. In addition, the Code of Ethics, together with our firm's
insider trading policy, restricts employees from trading when in possession of material non-public information of any kind,
which can include the existence of a significant cybersecurity incident at our firm. Our Code of Ethics may be found in the
“Responsibility - Corporate Governance” section of our Internet Site.
We have adopted a Code of Ethics for the CEO and Senior Financial Officers, which is intended to comply with Section 406 of
the Sarbanes-Oxley Act of 2002 (the “Item 406 Code”). The Item 406 Code may be found in the “Responsibility - Corporate
Governance” section of our Internet Site. We intend to satisfy the disclosure requirements under Item 5.05 of Form 8-K
regarding certain amendments to, or waivers from, provisions of the Item 406 Code that apply to the CEO, the CFO and the Chief
Accounting Officer by posting such information on our Internet Site. To date, there have been no such amendments or waivers.
NYSE Governance Matters
Section 303A.00 of the NYSE Listed Company Manual exempts limited partnerships from compliance with the following
sections of the Manual, some of which we comply with voluntarily: Section 303A.01 (board must have a majority of independent
directors), 303A.04 (corporate governance committee must have only independent directors as its members and must have a
charter that addresses, among other things, the committee’s purpose and responsibilities), and 303A.05 (compensation
committee must have only independent directors as its members and must have a charter that addresses, among other things,
the committee’s purpose and responsibilities).
AB Holding is a limited partnership (as is AB). In addition, because the General Partner is a wholly owned subsidiary of EQH, and
the General Partner controls AB Holding (and AB), we believe we also would qualify for the “controlled company” exemption.
However, we comply voluntarily with the charter requirements set forth in Sections 303A.04 and 303A.05.
Our Corporate Governance Guidelines (the “Guidelines”) promote the effective functioning of the Board and its committees,
promote the interests of the Partnerships’ respective Unitholders (with appropriate regard to the Board’s duties to the sole
stockholder of the General Partner), and set forth a common set of expectations as to how the Board, its various committees,
individual directors and management should perform their functions. The Guidelines may be found in the “Responsibility -
Corporate Governance” section of our Internet Site.
The Governance Committee is responsible for considering any request for a waiver under the Code of Ethics, the Item 406 Code
and the EQH Policy Statement on Ethics from any director or executive officer of the General Partner. No such waiver has been
granted to date and, if a waiver is granted in the future, such waiver would be described in the “Responsibility - Corporate
Governance” section of our Internet Site.
We include in the “Responsibility - Corporate Governance,” section of our Internet site an e-mail address for any interested party,
including Unitholders, to communicate with the Board. Our Corporate Secretary reviews e-mails sent to that address and has
some discretion in determining how or whether to respond, and in determining to whom such e-mails should be forwarded. In
our experience, substantially all of the e-mails received are ordinary client requests for administrative assistance that are best
addressed by management, or solicitations of various kinds.
Certifications by our CEO and CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 have been furnished as exhibits
to this Form 10-K.
AB Holding Unitholders and AB Unitholders may request a copy of any committee charter, the Guidelines, the Code of Ethics,
and the Item 406 Code by contacting our Corporate Secretary. The charters and memberships of the Executive, Audit,
Governance and Compensation Committees may be found in the “Responsibility - Corporate Governance” section of our
Internet Site.
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Part III
Fiduciary Culture
We maintain a robust fiduciary culture and, as a fiduciary, we place the interests of our clients first and foremost. We are
committed to the fair and equitable treatment of all our clients, and to compliance with all applicable rules and regulations and
internal policies to which our business is subject. We pursue these goals through education of our employees to promote
awareness of our fiduciary obligations, incentives that align employees’ interests with those of our clients, and a range of
measures, including active monitoring, to ensure regulatory compliance. Our compliance framework includes:
•
the Code of Ethics Oversight Committee (the “Ethics Committee”) and the Internal Compliance Controls Committee (the
“Compliance Committee”), each of which consists of our executive officers and other senior executives;
• an ombudsman office, where employees and others can voice concerns on a confidential basis;
•
firm-wide compliance and ethics training programs; and
• a Conflicts Officer and a Conflicts Committee, which help to identify and mitigate conflicts of interest.
The Ethics Committee oversees all matters relating to issues arising under our Code of Ethics and meets on a quarterly basis
and at such other times as circumstances warrant. The Ethics Committee and its subcommittee, the Personal Trading
Subcommittee, have oversight of personal trading by our employees.
The Compliance Committee reviews compliance issues throughout our firm, endeavors to develop solutions to those issues as
they may arise from time to time and oversees implementation of those solutions. The Compliance Committee meets on a
quarterly basis and at such other times as circumstances warrant.
2023 Annual Report
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Part III
Item 11. Executive Compensation
Compensation Discussion and Analysis (“CD&A”)
In this CD&A, we provide an overview and analysis of our executive compensation philosophy, address the principal elements
used to compensate our executive officers and explain how our executive compensation program aligns with AB’s strategic
objectives. Additionally, we discuss 2023 incentive compensation recommendations and decisions made by our Compensation
Committee for our named executive officers (“NEOs”). This CD&A should be read together with the compensation tables that
follow this section. Our NEOs for 2023(1) are:
Seth Bernstein
President and Chief Executive
Officer (“CEO“)
Bill Siemers
Interim Chief Financial Officer
("CFO")
Karl Sprules
Chief Operating Officer
("COO")
Onur Erzan
Head of Global Client Group
and Private Wealth
Mark Manley
General Counsel and
Corporate Secretary
(1) Kate Burke resigned from her position as COO and Chief Financial Officer in May 2023. We have included information concerning Ms. Burke
in this CD&A and the compensatory tables that follow in accordance with applicable SEC rules and regulations.
Compensation Philosophy and Goals
The intellectual capital of our employees is collectively the most important asset of our firm. We invest in people – we hire
qualified people, train them, encourage them to give their best thinking to the firm and our clients, and compensate them in a
manner designed to motivate, reward and retain them while aligning their interests with the interests of our Unitholders
and clients.
Furthermore, our compensation practices are structured to help the firm realize its long-term growth strategy to Deliver,
Diversify and Expand, Responsibly, with Equitable (the “Growth Strategy”), which includes firm-wide initiatives to:
• Deliver superior investment solutions to our clients;
• Develop high-quality differentiated services; and
• Maintain strong incremental margins.
We also are focused on ensuring that our compensation practices are competitive with industry peers and provide sufficient
potential for wealth creation for our NEOs and our employees generally, which we believe will enable us to meet the following
key compensation goals:
• attract, motivate and retain highly-qualified executive talent;
•
•
•
reward prior-year performance;
incentivize future performance;
recognize and support outstanding individual performance and behaviors that demonstrate and foster our firm’s primary
objective of helping our clients reach their financial goals; and
• align our executives’ long-term interests with those of our Unitholders and clients.
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Part III
Progress in Advancing our Growth Strategy in 2023
In 2023 we continued to show meaningful progress in executing our Growth Strategy: Deliver, Diversify, and Expand,
Responsibly, with Equitable.
Deliver Superior Investment Solutions to our Clients:
Investment Performance
The firm’s investment teams remain focused on consistently delivering differentiated return streams to our clients. We believe
that, over time, the ability to produce idiosyncratic returns that cannot be easily replicated will be central to sustaining our
competitive advantage. In 2023, our Fixed Income performance strengthened, with 75% of assets outperforming for the one-
year period ended December 31, 2023, 73% outperforming over the three-year period and 77% outperforming for the five-year
period. In Equities, performance lagged due to both stock selection and highly concentrated benchmark returns led by a small
number of mega-cap technology stocks. Approximately 26% of Equity assets were in outperforming services for the one-year
period, 45% for the three-year period and 42% for the five-year period ended December 31, 2023. (This performance data
reflects the percentage of active Fixed Income and Equity assets in Institutional Services that outperformed their respective
benchmarks, gross of fees, and of active Fixed Income and Equity assets in Retail advisor and I share class funds ranked in the
top half of their Morningstar category; if no advisor class exists, we used A share class). Additionally, as of December 31, 2023,
60% of U.S. Fund assets and 69% of Non-U.S. Fund assets were rated 4- or 5-stars by Morningstar.
The following retail Fixed Income and Equity mutual funds with AUM greater than $100 million placed in the top quartile of
performance for the three-year period ended December 31, 2023:
AB U.S. retail fixed income
mutual funds that placed in
the top quartile (3-yrs):
AB Non‑U.S. fixed income
funds that placed in the top
quartile (3-yrs):
AB U.S. retail equity mutual
funds that placed in the top
quartile (3-yrs):
AB Non‑U.S. equity funds
that placed in the top
quartile (3-yrs):
• AB Short Duration
• AB Equity Income
• AB Asia ex-Japan
High Yield
• AB Value
• AB EM Low-Volatility
• AB EM Value
• AB International
Healthcare
• AB Low-Vol Equity
• AB US Small and
Mid-Cap Equity
• AB Municipal Bond
Inflation Strategy
• AB Short-Duration
High Yield
• AB Tax-Aware Fixed
Income Opportunity
Net Flows
Scaling our proven investment services remains a key focus of our firm. In 2023, we grew organically in two of our three
distribution channels, Retail and Private Wealth, while Institutions saw net outflows. By asset class, Fixed Income grew
organically at 5%, offset by outflows in Active Equity, consistent with trends seen across the industry. AB’s net outflows were
$7.0 billion, or 1.1% attrition, a lower rate of attrition as compared with our public peer group which experienced higher attrition.
In our Retail channel, gross sales rose to $71.1 billion, up 8% versus 2022. The Retail redemption rate rose to 28% in 2023 from
24% in 2022, and full-year net inflows were $3.7 billion, driven by strong growth in both taxable and non-taxable Fixed Income. In
our Institutional channel, gross sales of $11.8 billion declined from $32.2 billion in 2022, the latter of which benefited from $16
billion in funding from two custom target date mandates. Net outflows were $11.8 billion. Our pipeline of $12.0 billion in AUM
decreased versus $13.2 billion a year ago, reflecting slowing institutional activity industry wide; Private Alternatives represented
over 80% of the pipeline fee base at year-end. In Private Wealth, gross sales in 2023 of $18.6 billion were strong, up 6% year-
over-year, and this channel generated its third straight year of net inflows, or 1.1% organic growth.
2023 Annual Report
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Part III
Diversify Through Developing High-Quality Differentiated Services:
Growing the diversity of our offerings to meet the needs of an evolving, complex global client base remains a key focus. In
2023, new investment strategy launches across our global platform included: Security of the Future, US High Dividend ETF,
Disruptors ETF, Corporate Bond ETF, Core Plus Bond ETF, Conservative Buffer ETF, Tax-Aware Intermediate Municipal ETF, Tax-
Aware Long Municipal, and Fixed Maturity Portfolio 2026/2027. Additionally, we launched multiple new vehicles for existing
investment strategies in response to customer demand, across a diverse set of geographies.
Expand:
In 2023, we focused on continued growth in our Private Alternatives business, with net inflows led by Secondaries, Renewable
Energy, Residential Mortgage Loans and European Commercial Real Estate Debt. We announced a new NAV (Net Asset Value)
lending strategy in our Private Credit business, supported by a commitment from Equitable. AB’s Private Markets platform is
now $61 billion, up 9% year over year, reflecting a diverse and relevant offering for Institutional, Retail and Private Wealth
clients. We remain focused on expanding opportunistically, both inside and outside the U.S., to support long-term growth. We
received approval in China for a wholly owned mutual fund license, and are also focused on growth in other Asian nations and
select European markets. We continued to invest in our insurance asset management business to grow third party clients. And,
we realized strong growth due to the redesign of our Muni investment platform to enable customization and tax optimization at
scale in our custom Muni SMAs.
Responsibly:
We view responsibility as an active pursuit that unites our firm—from the way we work and act, to our community service, and to
the investment solutions we deliver to our clients. Internally we continued to improve on a robust corporate governance and
compliance framework,
including further strengthening our security and business continuity infrastructure. Through our
investing activities, we continue to support proposals that encourage companies to strengthen their corporate governance
structures, support shareholder rights and strive for greater transparency, in keeping with the best interest of our clients.
Financially, responsibility extends to our expense management, as we maintained non-compensation expense growth below
inflation levels in 2023.
With Equitable:
In 2023 Equitable announced an expansion of its program to allocate and deploy permanent capital1 to AB’s illiquid platform.
Equitable's goal is to reposition and thereby further improve the risk adjusted return of its General Account, through seeding
new and growing existing alternative platforms at AB. An initial $10 billion commitment was made in 2021, of which
approximately 90% had been deployed in both Private Alternative and Private Placement strategies at year-end. This initial
commitment includes $750 million currently being deployed to AB CarVal strategies. In May 2023, Equitable announced a
second $10 billion in permanent capital commitment to AB’s illiquid platform, increasing the total of its commitments to $20
billion. We expect the second commitment will begin to be deployed in 2024, following the completion of the first commitment,
and will continue over the next several years.
Maintain Strong Incremental Margins:
We remain focused on managing costs to help ensure that we generate targeted incremental adjusted operating margins in the
range of 45-50%, over time. In 2023, we continued to execute a key pillar of this strategy as initially announced in 2018, which
was the relocation of our corporate headquarters from New York City to Nashville. We continue to seek efficiencies and
manage various operating expenses to help ensure that we drive operating leverage on incremental revenues. We also continue
to execute on the planned joint venture of Bernstein Research Services with Société Générale (EURONEXT: GLE, “SocGen”),
expected to be completed in the first half of 2024. We currently anticipate this action will result in a 200-250 basis point
improvement in our annual adjusted operating margin upon deconsolidation of Bernstein Research Services from our
consolidated financial statements.
Despite improving financial markets over the course of 2023, our full year average 2023 AUM declined by 1% from 2022 levels,
reflecting a lag in average AUM recovering versus the prior year. This resulted in a rolling three-year incremental adjusted
operating margin of 8%, below our targeted range. Our adjusted operating margin decreased to 28.2% in 2023, down 70 basis
points as compared to 28.9% in 2022. The decrease resulted from operating expense growth of 2% as compared with adjusted
1 Permanent capital means investment capital of indefinite duration, for which commitments may be withdrawn under certain conditions. Such
conditions primarily include potential regulatory restrictions, lacking sufficient liquidity to fund the capital commitments to AB and AB's inability
to identify attractive investment opportunities which align with the investment strategy. Although EQH’s insurance subsidiaries have indicated
their intention over time to provide this investment capital to AB, they have no binding commitment to do so. While the withdrawal of their
commitment could potentially slow down our introduction of certain products, the impact to our overall operations would not be material.
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net revenue growth of 1%. Total adjusted compensation and benefits expense increased by 2%, promotion and servicing costs
rose by 2%, and general and administrative costs rose 1% year-over-year. We provide additional information regarding our
adjusted compensation ratio below in this CD&A; see our discussion of “Management Operating Metrics” above in Item 7 for a
reconciliation between our results pursuant to U.S. GAAP and our adjusted results.
Part III
2023 Annual Report
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Part III
Our Compensation Practices are Structured to Help the Firm Realize its
Growth Strategy
Develop, commercialize
and scale our suite
of services
$1.4 Billion Active ETF's
10 New Active ETF’s launched in 2023,
including AB Conservative Buffer ETF
and AB High Dividend ETF, bringing total
to 12 Active ETF’s.
$61 Billion Municipals
Municipal
11%
Platform reflects
annualized organic growth led by strong
growth in Muni SMA’s. Our Retail Muni
platform has grown 11 straight years.
China License Obtained
AB obtains license for wholly-owned
mutual fund business.
Deliver superior investment solutions to clients
Fixed Income and Equity Performance
Maintain strong incremental margins(1)
AB Adjud sted Operating Margin (2)
$61 Billion Private
Markets AUM
+9% Y/Y
driven
Secondaries,
Mortgage
Commercial Real Estate Debt.
Renewable
Loans
and
by
growth
in
Energy,
European
$20 Billion Total
Equitable Commitment
Additional $10 billion committed capital
by Equitable in 2023 to further expand
AB's Private Alternative and Private
Placements Platforms.
Total Unitholder Return
(2019 - 2023; assumes dividend reinvestment)
Overview
Gross Sales
Alts/MAS
Organic Growth
Beneficial Pipeline Mix
AB’s Retail channel
achieved
Fixed Income Organic
Growth
Two of three Channels positive
in 2023
Alternatives represented over
$71.1B 5.5% 1.9%
80%
in gross sales in 2023, up 8%
year-over-year
in 2023
average annual organic growth
per year, over the last 5 years
of institutional pipeline fee
base at year-end
(1) AB generated a rolling three-year incremental adjusted operating margin of 8%, below the long-term targeted range of 45-50%. We provide
additional information regarding our adjusted operating margin in MD&A above in Item 7.
(2) During 2023, we adjusted operating income to exclude the impact of interest on borrowings in order to align with industry peers. We have
recast prior periods presentation to align with the current period presentation.
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Part III
Overview of 2023 Incentive Compensation Program
When reflecting on 2023 performance and pay, each of our NEOs (other than Ms. Burke who resigned in May 2023) received a
portion of his year-end incentive compensation in the form of an annual cash bonus and a portion in the form of long-term
incentive compensation awards. The split between annual cash bonus and long-term incentive compensation varied depending
on the NEO's total compensation, with lower-paid executives receiving a greater percentage of their incentive compensation as
cash bonuses than more highly-paid executives. (For additional
information about these compensatory elements, see
“Compensation Elements for NEOs” below.)
In 2023, we utilized performance scorecards for senior leaders of the firm, including our NEOs. These scorecards require our
senior leaders to develop and maintain a broad leadership mindset with priorities, such as accelerating ESG initiatives and our
firm's alternatives platform, that are aligned with firm-wide goals of creating long-term value for all of our stakeholders. The
scorecard for each NEO reflected our Growth Strategy and included actual results relative to target metrics across the
following measures:
• Financial performance,
including peer results, adjusted operating margin, adjusted net revenue growth and operating
efficiency targets (see our discussion of “Management Operating Metrics” in Item 7 for a reconciliation between our results
pursuant to U.S. GAAP and our adjusted results);
•
Investment performance, by delivering competitive returns across services and time periods;
• Strategic, aligned with our strategy of delivering core investment solutions, while developing high-quality differentiated
services, in faster-growing geographies, responsibly, in partnership with Equitable;
• Organizational, including organizational effectiveness and efficiency, leadership impact, succession planning, developing
talent, innovating and automating, and real estate utilization; and
• Cultural, including purpose, employee engagement, diversity, retention and safety.
The scorecards support management and the Compensation Committee in assessing each executive's performance relative to
business, operational and cultural goals established at the beginning of the year and reviewed in the context of the current-year
financial performance of the firm. The amount of incentive compensation paid to our NEOs continues to be determined on a
discretionary basis by the Compensation Committee. (For additional
information, please see "Compensation Committee;
Process for Determining Executive Compensation" below in this CD&A.)
Mr. Bernstein, with the Compensation Committee, continue to believe that the appropriate metric to consider in determining the
amount of incentive compensation paid to all employees, including our NEOs, in respect of 2023 performance is the ratio of
adjusted employee compensation and benefits expense to adjusted net
revenues, which terms are described
immediatelyl below:
• Adjusted employee compensation and benefits expense is our total employee compensation and benefits expense minus
other employment costs such as recruitment, training, temporary help and meals, and excludes the impact of mark-to-market
vesting expense, as well as dividends and interest expense, associated with employee long-term incentive compensation-
related investments. Also, we adjust for certain performance-based fees passed through to our investment professionals.
• Adjusted net revenues (see our discussion of “Management Operating Metrics” in Item 7 for a reconciliation between our
results pursuant to U.S. GAAP and our adjusted results) exclude investment gains and losses and dividends and interest on
employee long-term incentive compensation-related investments. In addition, adjusted net revenues offset distribution-
related payments to third parties as well as amortization of deferred sales commissions against distribution revenues. We
also exclude additional pass-through expenses we incur (primarily through our transfer agent) that are reimbursed and
recorded as fees in revenues. Additionally, we adjust for the revenue impact of consolidating company-sponsored
investment funds by eliminating the consolidated company-sponsored investment funds’ revenues and including AB’s fees
from such funds, and AB’s investment gains and losses on its investment
that were eliminated
in consolidation. We also adjust for certain acquisition-related pass-through performance-based fees and certain other
performance-based fees passed through to our investment professionals.
in such funds,
2023 Annual Report
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Part III
In addition, Mr. Bernstein, along with the Compensation Committee, continue to believe that the firm’s adjusted employee
compensation and benefits expense, excluding the impact of performance-based fees, generally should not exceed 50.0% of
our adjusted net revenues annually, except in unexpected or unusual circumstances. As the table below indicates, in 2023,
adjusted employee compensation and benefits expense amounted to approximately 49.0% of our adjusted net revenues
(in thousands):
t Revenues
Adjustments (see above)
Adjusted Net Revenues
Employee Compensation & Benefits Expense
Adjustments (see above)
Adjusted Employee Compensation & Benefits Expens
e
Adjusted Compensation Ratio
$ 4,155,323
(783,374)
$ 3,371,949
1,769,153
(115,977)
$
1,653,176
49.0%
Our 2023 adjusted compensation ratio of approximately 49.0% reflects a balancing of the need to keep compensation levels
competitive with industry peers in order to attract, motivate and retain highly-qualified talent with the need to maintain strong
operating leverage in our business. The Compensation Committee works with management to help ensure both needs are
sufficiently addressed.
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We have described below each NEO’s individual achievements in 2023 given each officer’s role, the contents of their respective
performance scorecards and the firm's business and operational goals:
Seth Bernstein
President and Chief Executive Officer
Individual Achievements
Financial and Investment Performance
Part III
Summary of Achievements: As President and
CEO, Mr. Bernstein led AB to achieve organic
growth in two of three distribution channels.
The firm grew revenues while operating
expenses grew at a rate below inflation,
inclusive of continued investment in strategic
growth areas. Mr. Bernstein led the firm
through executive leadership changes while
advancing a number of strategic priorities,
including our fund management company in
China, opening our AB India office, and
progressing toward the closing of the joint
venture for our research and trading business.
2023 Compensation
• Led the firm’s efforts in delivering in growth areas, resulting in lower
attrition rates relative to public peers, despite a difficult institutional
fundraising environment. AB’s fixed income business grew
organically by 5%, outperforming peers, reflecting successful scaling
from investments in technology and distribution. Two of the firm’s
three distribution channels grew organically.
•
• Earnings per unit (“EPU”) in the fourth quarter were up 9% versus the
same period in 2022. Full year 2023 EPU of $2.69 declined by 9%
versus 2022, reflecting lower average AUM and base fees, combined
with higher interest expense reflecting higher interest rates.
Improved performance meaningfully in fixed income, outperforming
applicable peers or benchmarks, while our equities franchise
underperformed due to both stock selection as well as strong
benchmark returns narrowly led by a small number of mega-cap
technology
the percentage of
(both measured by
assets outperforming).
stocks
Strategic
• Grew AB’s active ETF platform to $1.4B in assets with 12 funds,
celebrating its one-year anniversary. Our municipal separately
managed account platform reached $23B, +36% year-over-year,
gaining market share.
• Achieved a critical milestone receiving our regulatory license to
operate an onshore China fund management company.
• Progressed efforts to grow the AB CarVal franchise, by closing on
our clean energy fund, three times larger than the first vintage and
designing a new $750M residential mortgage mandate in
partnership with EQH. Made progress on new product development
for
the retail channel and created and began execution on
integration plans across corporate functions.
• Furthered plans to create a joint venture with Société Générale for
our Bernstein Research Services business and have managed staff
attrition levels well below the agreed upon threshold.
Organizational
• Managed through an executive leadership transition, appointing a
new Chief Operating Officer and identifying a new Chief Financial
Officer effective Q1 2024. Created an inaugural Head of Investments
role to enhance and optimize the investment business units and
reduce span of control.
• Established new entity in India now with ~390 staff. Opened state-
of-the art new office, identified local leadership, expanded functions
across business units, and improved attrition.
• Advanced firmwide sustainability goals. Strengthened controls
and advanced our own
to minimize
risk
and oversight
corporate sustainability.
Culture
• Continued focus on Diversity, Equity & Inclusion. Improved firmwide
voluntary attrition and attrition among our diverse populations.
• Maintained strong engagement metrics in AB’s employee survey.
Reinforced firmwide purpose and values statements within
business units.
2023 Annual Report
151
Individual Achievements
Financial
• Managed cost reduction and containment initiatives in a restricted
to achieve an adjusted operating
revenue growth environment
margin of 28.2%, exceeding our target.
•
Improved AB’s financial processes through enhanced accounting,
reporting, accounts payable and planning and analysis procedures.
Strategic
• Supported the contribution of our cash equities and research
business into a planned joint venture between AB and Société
Générale as AB’s Project Manager of the Finance workstream and
serving as a member of the steering committee overseeing the
transaction.
• Successfully partnered with Equitable on the financial impacts, both
including our
actual and forecasted, of our strategic initiatives,
headquarter office relocation, growing our private alternatives and
insurance products and services, and our development of a Fund
Management Company in China, to optimize both our results of
operations and balance sheet.
Organizational
• Supported the integration plans and processes of financial functions
relating to the 2022 CarVal acquisition and served on the joint
leadership team providing oversight of integration plans across all
corporate functions.
• Successfully onboarded approximately 25 Finance personnel
into
AB India.
• Seamlessly led the Finance function and executed all CFO
responsibilities for the last seven months of the year upon the
resignation of the previous CFO.
• Executed on succession planning by appointing a new Controller
and Chief Accounting Officer from within the Finance talent pool,
ensuring a smooth transition of leadership.
• Supported the successful recruitment process to identify and hire a
new CFO (starting in the first quarter of 2024).
Culture
• Maintained strong Finance employee engagement, retention and in-
office collaboration and grew diversity within our workforce.
• Enhanced Purpose within Finance and engaged in various Town Hall,
informal gatherings, and small meeting groups to have employees
connect with AB’s purpose and values.
Part III
Bill Siemers
Interim Chief Financial Officer effective June
1, 2023
Summary of Achievements: As Interim Chief
Financial Officer (CFO), Mr. Siemers oversaw
the delivery of complete, accurate and timely
financial results both internally and externally
(in Forms 10-K and 10-Q and Earnings
Releases)
and
ensured
continuous improvement of a strong Finance
function. Mr. Siemers held the role of
and Chief Accounting Officer
Controller
through August 20, 2023.
continuity
and
2023 Compensation
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Karl Sprules
Chief Operating Officer effective May 31, 2023
Individual Achievements
Financial
Part III
Summary of Achievements: Mr. Sprules
successfully transitioned the role of Global
Head of Technology & Operations (GTO) to
Robert McWilliams June 1, 2023, and assumed
the role of Chief Operating Officer (COO), now
overseeing Legal
and Compliance, GTO,
Diversity, Equity and Inclusion, Real Estate
Services, Internal Audit, Risk, and the Program
Management Office.
In 2023 as COO, Mr.
spearheaded the evaluation and
Sprules
prioritization of the firm’s strategic initiatives,
improved return to office compliance and
drove efforts in expanding our footprint in India
and China and the relocation of our NYC office
to Hudson Yards.
2023 Compensation
• Reduced the GTO budget through thoughtful and targeted expense
savings measures.
• Drove the prioritization process for funding the firm’s strategic
for
framework
developed
iterative
and
an
investments
ongoing planning.
Strategic
• Evolved the Quarterly Business Review process to improve focus on
key leadership topics such as business performance, strategic
initiatives, errors and incidents, return to office compliance, and
cross-functional business involvement.
• Co-led project to obtain the firm’s fund management company
identifying areas that
focus, and providing solutions to meet
license in China by removing roadblocks,
required additional
those needs.
• Drove integration of CarVal’s technology functions and processes
with AB. As COO, oversaw integration planning across all non-
investment functions.
Organizational
•
Increased collaboration across the COO and Chief Administrative
Officer roles across the firm by providing a platform to discuss
strategic initiatives, emerging issues, resourcing, diversity efforts,
and broader topics of importance.
• Simplified management by restructuring the GTO department into
high-level operating functions focused on Investments, Clients,
Funds, Operations, and Technology.
• Led the design, build and opening of the firm’s new office in India,
reducing turnover, considerably improving staff engagement, and
expanding AB India support to other business units beyond GTO.
Culture
• Co-led the firm’s efforts to drive a three-two structure for return to
office compliance and rolled out a dashboard to management to
better assist in tracking and driving compliance.
• Organized various employee gatherings throughout the year to
foster staff unity and engagement among business units.
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Part III
Onur Erzan
Global Head of Client Group and Head of
Private Wealth
Summary of Achievements: As Global Head of
Client Group (CG) and Head of Private Wealth
(PW), Mr. Erzan achieved solid results across
both groups despite a challenging market
environment. Under Mr. Erzan’s leadership, the
CG grew its active ETF platform, obtained a
fund management company license to operate
in China, and focused on building out
capabilities in key segments. Additionally,
Mr. Erzan added advisors and expanded
services and investment solutions offered to
our PW clients. As a member of the executive
leadership team, Mr. Erzan collaborated with
leadership across AB and Equitable
senior
Holdings
and
on
sales strategy.
business
overall
2023 Compensation
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Individual Achievements
Financial
• Achieved solid results in CG with 2023 gross sales of $83B,
including $71B retail and $12B institutional. US Retail, a key strategic
growth area, grew sales by 9% year-over-year and achieved a fifth
straight year of organic growth.
• Realized positive PW net flows (+$1.1B), with 1% annualized net
organic growth, the third straight year of organic growth. Saw record
advisor productivity with strong client retention. Continued growth in
private alternatives and margin loans were partially offset by impact
of deteriorating active equity flows.
Strategic
• Grew ETF platform, which launched in September 2022, from two to
reaching $1.4B in total AUM across multiple
12 funds,
client channels.
• Co-led effort to obtain regulatory license for AB’s fund management
company in China to offer onshore investment products and
solutions to local retail clients.
• Continued to build out capabilities in key growth segments. In third-
party insurance, developed an analytical toolset, onboarded new
robust client data and reporting solution, and expanded advisor
In defined contribution, continued to develop flexible
coverage.
approaches to delivering insurance-backed guaranteed retirement
income. Published foundational
research on evaluating diverse
retirement-income solutions.
• Furthered build out of our alternative investments platform by
adding product development resources and making meaningful
progress in the creation of new innovative offerings to be launched
in 2024 for retail clients.
Increased PW net new advisors beyond target of 5%. Boosted
number of teams forming new partnerships, expanding reach and
capabilities, and elevating the client experience for our new and
existing clients.
•
• Launched comprehensive PW client
segmentation strategy,
including expanding UHNW servicing team,
introducing new
organizational structure for global families vertical, and piloting fee-
for-service with multi and single-family offices. Segmentation
strategy will streamline operations, grow brand awareness, expand
reach, and provide more services for clients.
• Expanded PW investment solutions offering,
including first
successful CarVal engagement to raise capital for clean energy fund
and launch of several fixed income separately managed account
strategies. Raised record capital amount for secondary investing
partners and our model portfolio platform crossed $20B, an all-
time high.
Organizational
• Focused on attracting and onboarding several senior leadership
roles within the CG globally across sales, business development,
and product strategy.
• Redesigned PW’s organizational structure to focus on new business
growth within targeted client segments. (UHNW, Global Families,
Family Offices, Women and Diverse Markets).
Culture
• Fostered a positive, results-driven culture of continuous learning and
development across CG and PW.
Improved collaboration across
both organizations including cross-department partnerships in
business management and marketing.
• Promoted a customer-centric approach across the organization via
segmented client playbooks and client engagement surveys.
Mark Manley
General Counsel & Corporate Secretary
Individual Achievements
Financial
Part III
the firm.
Summary of Achievements: Mr. Manley is
responsible for AB’s Legal and Compliance
Department, overseeing all legal and regulatory
In 2023, Mr. Manley
affairs for
successfully
counseled management
a
navigate
regulatory
environment,
departmental
implemented
organizational changes to optimize structure
and efficiencies, and supported the firm’s
critical strategic initiatives, including the joint
venture
in
establishing
new jurisdictions.
to
heighted
businesses
through
and
2023 Compensation
• Successfully navigated the firm through numerous regulatory
examinations, inquiries and sweeps without any serious infractions
or penalties.
Strategic
• Provided legal leadership and guidance on the Société Générale joint
venture transaction and the development of new business
establishments in Ireland and Dubai.
• Spearheaded our Investments Reimagined initiative with EQH as
part of our collective efforts to streamline and build efficiencies into
our capital deployment activities.
• Provided legal support and regulatory guidance in connection with
licensing of our Fund Management Company
the successful
in China.
• Worked closely with our US Mutual Fund boards as they made
formal plans for a unitary board in 2025.
Organizational
• Continued to drive innovation and savings through technology and
process improvements.
• Executed on four critical succession plans in Compliance, Mutual
Fund Legal, International Legal and Corporate Legal promoting high
quality internal talent while creating efficiencies, cost savings and
significant leadership development opportunities.
Culture
• Emphasized the importance of our
fiduciary culture through
compliance and workplace practices training.
The compensation of each of these NEOs (other than Ms. Burke) reflected the Compensation Committee’s judgment (and Mr.
Bernstein’s judgment, with respect to each executive other than himself) in assessing the importance of the executive's
achievements in the context of our firm’s adjusted financial results and progress in advancing our Growth Strategy.
2023 Annual Report
155
Part III
Compensation Committee; Process for Determining Executive Compensation
The Compensation Committee consists of Mr. Stonehill (Chair), Mr. Kaye and Mr. Pearson. The Compensation Committee held
five regular meetings in 2023.
As discussed in “NYSE Governance Matters” in Item 10, AB Holding, as a limited partnership, is exempt from NYSE rules that
require public companies to have a compensation committee consisting solely of independent directors. EQH owns, directly
and through various subsidiaries, an approximate 61.2% economic interest in AB (as of December 31, 2023), and compensation
expense is a significant component of our financial results. For these reasons, Mr. Pearson, director and President and CEO of
EQH, is a member of the Compensation Committee, and any action taken by the Compensation Committee requires his
affirmative vote or consent. Given this structure, the Compensation Committee has established a sub-committee consisting
entirely of non-management directors (i.e., Mr. Stonehill and Mr. Kaye). This “Section 16 Sub-Committee” approves awards of
restricted AB Holding Units to NEOs to ensure we can utilize the short-swing trading exemption set forth in Section 16b-3 under
the Exchange Act. Under this exemption, equity grants to our firm's executive officers are exempt from short-swing trading rules
if each such grant is approved by the full Board or a committee of the Board consisting entirely of “non-employee” directors
(generally, directors who are not officers of the company or an affiliate).
The Compensation Committee has general oversight of compensation and compensation-related matters, including:
• determining cash bonuses;
• determining contributions and awards under incentive plans or other compensation arrangements (whether qualified or non-
qualified) for employees of AB and its subsidiaries, and amending or terminating such plans or arrangements or any welfare
benefit plan or arrangement or making recommendations to the Board with respect to adopting any new incentive
compensation plan, including equity-based plans;
•
•
reviewing and approving the compensation of our CEO, evaluating his performance, and determining and approving his
compensation level based on this evaluation; and
reviewing and discussing the CD&A and recommending to the Board its inclusion in each of AB’s and AB Holding’s Form
10-K and, and when applicable, proxy statements.
The Compensation Committee has developed a comprehensive process for:
•
reviewing our executive compensation program to ensure it is aligned with our firm’s philosophy and strategic objectives;
• evaluating performance by our NEOs against goals and objectives established in each executive's performance scorecard at
the beginning of the year; and
• setting compensation for the NEOs and other senior executives.
The Compensation Committee’s year-end process generally focuses on the cash bonuses and long-term incentive
compensation awards granted to NEOs and other senior executives. Mr. Bernstein, working with the other senior executives,
provides recommendations for individual executive awards to the Compensation Committee for its consideration. As part of
this process, and as we discuss more fully below in "Compensation Consultant;t Benchmarkirr ng Data," Ms. Spencer provides the
Compensation Committee with competitive market data from one or more compensation consultants.
Management periodically reviews, with the Compensation Committee, the firm’s expected adjusted financial and operating
results, the firm’s actual adjusted financial and operating results and management’s year-end compensation expectations, as
they evolve throughout the year. Management accomplished these reviews during regular meetings of the Compensation
Committee held in February, May, September, October and November 2023. The Compensation Committee approved the firm's
final year-end compensation recommendations during its regular meeting held in November 2023.
Additional information regarding the Compensation Committee’s functions can be found in the Committee's charter, which is
available online in the “Responsibility - Corporate Governance” section of our Internet Site.
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Part III
Compensation Consultant; Benchmarking Data
In 2023, we retained McLagan Partners (“McLagan”) as an independent consultant to provide competitive market data and
trend forecasting for our NEOs and other senior executives, for which we paid McLagan $60,000 (the "2023 Benchmarking
Data"). McLagan has an extensive database on compensation for most asset management companies, including private
companies for which information is not otherwise available.
The 2023 Benchmarking Data summarized 2022 compensation levels and 2023 salaries, which helps form a reasonable
estimation of compensation levels in the industry for executive positions like those held by our NEOs at selected asset
management companies comparable to ours in terms of size and business mix (the “Comparable Companies”) and, in so
doing, assists in determining the appropriate level of compensation for our NEOs.
The Comparable Companies, which management selected with input from McLagan, included:
Barings
Columbia Threadneedle
Franklin Templeton Investments
Goldman Sachs Asset Management
Invesco
Janus Henderson Investors
Loomis, Sayles & Company
MFS Investment Management
Morgan Stanley Investment Management
Neuberger Berman Group
Nuveen Investments
Pacific Investment Management
Prudential Global Investment Mgmt.
Schroder Investment Management
T. Rowe Price
The 2023 Benchmarking Data indicated that, as a group, our NEOs fall within market range. Please note that we excluded Ms.
receive year-end
Burke from this analysis as she resigned from AB in May 2023 and, accordingly, did not
incentive compensation.
The Compensation Committee considered this information in concluding that the compensation levels paid in 2023 to our
NEOs (other than Ms. Burke, who was not considered in this process given her resignation from the Company) were appropriate
and reasonable.
Compensation Elements for NEOs
We utilize a variety of compensation elements to achieve the goals described above, consisting of base salary, annual short-
term incentive compensation awards (cash bonuses), a long-term incentive compensation award program, a defined
contribution plan, a defined benefit plan and certain other benefits, each of which we discuss below:
Base Salaries
Base salaries comprise a relatively small portion of our NEOs’ total compensation. We consider individual experience,
responsibilities and tenure with the firm when determining the narrow range of base salaries paid to our NEOs (pl(( ease refer to
“Overview of Mr. Bernstein's Employmeyy
nt Agreement” below for information relating to Mr. Bernstein’s base salary and other
compensation elements).
Annual Short-Term Incentive Compensation Awards (Cash Bonuses)
We provide our NEOs with annual short-term incentive compensation awards in the form of cash bonuses.
We believe that annual cash bonuses, which generally reflect individual performance and the firm’s current year adjusted
financial performance, provide a short-term retention mechanism for our NEOs because such bonuses typically are paid
in December.
Annual cash bonuses in respect of 2023 performance for each NEO were determined in November 2023 and paid in December
2023. These bonuses, and the 2023 long-term incentive compensation awards described immediatelyl below,w were based on
management’s evaluation, subject to the Compensation Committee’s review and approval, of each NEO’s performance during
the year, the firm's progress in advancing its Growth Strategy during the year, the performance of the NEO’s business unit or
function compared to business and operational goals established in each NEO's performance scorecard at the beginning of the
year, and the firm’s current-year adjusted financial performance.
In respect of 2023, Mr. Bernstein received a cash bonus of $4,515,000 in accordance with the terms of the employment
agreement into which he entered with the General Partner, AB and AB Holding as of May 1, 2017 (the “CEO Employment
Agreement”) and after review of Mr. Bernstein's performance during 2023 by the Compensation Committee. Please refer to
nt Agreement” below for additional information relating to Mr. Bernstein’s cash bonus
“Overview of Mr. Bernstein's Employmeyy
and other compensation elements.
2023 Annual Report
157
Part III
Long-Term Incentive Compensation Awards
Long-term incentive compensation awards generally are denominated in restricted AB Holding Units. We utilize this structure to
align our NEOs’ long-term interests directly with the interests of our Unitholders and indirectly with the interests of our clients,
as strong performance for our clients generally contributes directly to increases in AUM and improved financial performance
for the firm.
We believe that annual long-term incentive compensation awards provide a long-term retention mechanism for our NEOs
because such awards generally vest ratably over time; awards granted in 2022 and forward generally vest in equal portions over
three years, while awards granted prior to 2021 generally vest over four years. We reduced the vesting period to three years for
awards in 2021 to help ensure our compensation framework remains highly competitive.
For 2023 performance, awards were granted in December 2023 to each of Messrs. Bernstein, Siemers, Sprules, Erzan, and
Manley pursuant to the AB 2023 Incentive Compensation Award Program (the "ICAP"), an unfunded, non-qualified incentive
compensation plan, and the AB 2017 Long Term Incentive Plan, our equity compensation plan (the “2017 Plan”). Ms. Burke,
who resigned in May 2023, did not receive an award.
Prior to the date on which an award vests, the AB Holding Units underlying an award are restricted and are not permitted to be
transferred. Upon vesting, the AB Holding Units underlying an award generally are delivered, unless the award recipient has, in
advance, voluntarily elected to defer receipt to future periods or the award is structured with a delayed delivery date. Quarterly
cash distributions on vested and unvested restricted AB Holding Units are delivered to award recipients when cash distributions
are paid generally to Unitholders.
An award recipient who resigns or is terminated without cause prior to the vesting date is eligible to continue to vest in his or
her long-term incentive compensation award subject to compliance with the restrictive covenants set forth in the applicable
award agreement, including restrictions on competition, and restrictions on employee and client solicitation. Additionally, the
award agreement provides for continued vesting in the event of an award recipient's retirement, subject to applicable restrictive
covenants. To be eligible for retirement, an award recipient must provide notice of retirement, enter into a retirement agreement
and satisfy a "Rule of 70," whereby the sum of the recipient's age and full years of service must equal at least 70.
Clawbacks
The award agreement contained in the AB Incentive Compensation Award Program ("ICAP") permits AB to claw-back the
unvested portion of an award if the recipient fails to adhere to our risk management policies. As such, for accounting purposes,
there is no employee service requirement and awards are fully expensed when granted. As used in this Item 11, “vest” refers to
the time at which the awards are no longer subject to forfeiture for breach of these restrictions or risk management policies,
which we discuss further below in “Consideration of Risk Matters in Determining Compensation.”
Further, pursuant to Rule 10D-1 of the Exchange Act and Section 303A.14 of the NYSE Listed Company Manual, the Board has
adopted a Compensation Recovery Policy (the "Policy") effective November 15, 2023. Pursuant to the Policy, the Company will
promptly recover erroneously awarded incentive-based compensation (as defined by section 10D(b)(1) to include any
compensation that is granted, earned or vested wholly or in part upon attainment of a financial reporting measure) from any
current or former Executive Officer of the Company as defined by Rule 10D-1 of the Exchange Act as required under the
Exchange Act and the NYSE Listed Company Manual. The company does not currently award incentive-based compensation as
defined by the Act. We have filed the Policy as Exhibit 97.01 to this Form 10-K.
The portion of incentive-based compensation received from EQH specific to Mr. Bernstein is covered under the Compensation
Recovery Policy adopted by our parent EQH and will be applicable to any current or previous incentive-based compensation
received directly from our parent company by Mr. Bernstein. See "Summary Compensation Table" EQH for stock awards
received by Mr. Bernstein for which the EQH Compensation Recovery Policy is applicable.
Former COO and CFO Resignation
As announced in a Form 8-K filed on June 1, 2023, Ms. Burke resigned from AB on May 31, 2023. Her responsibilities as COO
were promptly transferred to Mr. Sprules and her responsibilities as CFO were promptly transitioned to Mr. Siemers on an
interim basis.
The compensatory benefits Ms. Burke forfeited by resigning included (i) unvested portions of prior-year long-term incentive
compensation awards, aggregating to approximately $2.9 million in value (based on the closing price of an AB Holding Unit as
of August 29, 2023, her official termination date taking into account the garden leave obligation provided in the ICAP award
agreement); and (ii) the unvested portions of restricted stock unit awards and performance share awards (at target) granted to
her by EQH in connection with her membership on, and service to, EQH's Management Committee, aggregating to
approximately $225,000 (based on the closing price of an EQH share as of August 29, 2023).
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Part III
Defined Contribution Plan
U.S. employees of AB, including each of our NEOs, are eligible to participate in the Profit Sharing Plan for Employees of AB (as
amended and restated as of January 1, 2015, and as further amended as of January 1, 2017, as of April 1, 2018, and as of June
28, 2022, the “AB Profit Sharing Plan”), a tax-qualified defined contribution retirement plan. The Compensation Committee
determines the amount of company contributions (both the level of annual matching by the firm of an employee’s pre-tax salary
deferral contributions and the annual company profit sharing contribution, if any).
With respect to 2023, the Compensation Committee determined in November 2023 that employee deferral contributions would
be matched on a dollar-for-dollar basis up to 5% of eligible compensation and that there would be no profit sharing contribution
paid by AB.
Defined Benefit Plan
The retirement plan (the "Retirement Plan") is a qualified, noncontributory, defined benefit retirement plan covering current and
former employees who were employed in the United States prior to October 2, 2000. Each participant’s benefits are determined
under a formula which takes into account years of credited service through December 31, 2008, the participant’s average
compensation over prescribed periods and Social Security covered compensation. The maximum annual benefit payable under
the Retirement Plan may not exceed the lesser of $100,000 or 100% of a participant’s average aggregate compensation for the
three consecutive years in which he or she received the highest aggregate compensation from us or such lower limit as may be
imposed by the Internal Revenue Code of 1986, as amended (the "Code") on certain participants by reason of their coverage
under another qualified retirement plan we maintain. The Retirement Plan generally provides for payments to, or on behalf of,
each vested employee upon such employee’s retirement at the normal retirement age provided under the plan or later, although
provision is made for payment of early retirement benefits on an "actuarially" reduced basis. Normal retirement age under the
plan is 65. Death benefits are payable to the surviving spouse of an employee who dies with a vested benefit under the
Retirement Plan. For additional
information regarding interest rates and actuarial assumptions, see Note 18 to AB's
consolidated financial statements in Item 8.
A participant in the Retirement Plan is eligible for early retirement upon termination of employment if the participant is at least
age 55 and the sum of the participant’s age and years of vesting service equals at least 80. As of December 31, 2023, Mr.
Sprules has attained age 50 and earned 26 years of vesting service. (For purposes of determining early retirement eligibility,
years of service after benefits under the Retirement Plan ceased accruing are included.) Because Mr. Sprules is younger than
age 55 and the sum of his age and service is less than 80, he is not eligible for early retirement. As of December 31, 2023, Mr.
Manley has attained age 61 and earned 40 years of vesting service. Because the total of Mr. Manley’s age and years of service
exceeded 80, he is eligible for early retirement.
The early retirement benefit is “actuarially” reduced for each month that payments begin before age 65. The reduction to the
pension is made because it costs more money to provide payments over a longer period of time. In other words, the monthly
benefit commencing at the early retirement date has the same value as a monthly benefit beginning at age 65. The actuarial
adjustment factors are based on the mortality assumptions specified under Section 417(e) of the Internal Revenue Code, and a
6% interest rate, as specified in the Retirement Plan. For example, a 60 year old participant would receive approximately 66% of
the accrued benefit that would have been payable at age 65.
Other Benefits
Change in Control Plan
In December 2020, the Compensation Committee approved the AllianceBernstein Change in Control Plan for Executive Officers
(the "CIC Plan"). The purpose of the CIC Plan is to provide certain benefits for each individual designated by our CEO as an
executive officer (an "Executive Officer") in the event of a change in control ("CIC") of AB. The CIC Plan contains a change in
control provision substantially similar to the change in control provision included in Mr. Bernstein's employment agreement (as
described below in "Overview of Mr. Bernstein's Employmeyy
nt Agreement"). The provisions under the CIC Plan also are described
in a compensatory table below entitled, “Potential Payments upon Termination or Change in Control.”
The CIC Plan provides that, in the event of a CIC, unless prior to the CIC, any unvested restricted unit awards (including ICAP
awards) then held by an Executive Officer are honored or assumed, or new rights are substituted therefore, so that the
Executive Officer's rights and entitlements after the CIC are substantially equivalent to or better than the Executives Officer's
rights and entitlements under the award, each award will, prior to the CIC, immediately and fully vest and no longer be subject
to forfeiture.
In addition, (i) if the Executive Officer's employment is terminated by AB, other than for cause, (ii) the Executive Officer resigns
with good reason (as defined in the CIC Plan), or (iii) the Executive Officer dies or becomes disabled, within 12 months
following a CIC, the Executive Officer will be entitled to receive the sum of (a) the Executives Officer's annual base salary at the
time of his or her termination, and (b) the Executive Officer's most recent annual cash incentive compensation award, multiplied
by two.
2023 Annual Report
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Part III
The CIC Plan defines CIC to include any transaction as a result of which EQH ceases to control AB, or a successor entity that
conducts the business of AB. However, there would not be a CIC unless, as a result of the transaction, an entity other than EQH
controls AB (or a successor to its business).
Life Insurance
Our firm pays the premiums associated with life insurance policies purchased on behalf of our NEOs.
Consideration of Risk Matters in Determining Compensation
In 2023, we considered whether our compensation practices for employees, including our NEOs, encourage unnecessary or
excessive risk-taking and whether any risks arising from our compensation practices are reasonably likely to have a material
adverse effect on our firm. For the reasons set forth below,w we have determined that our current compensation practices do not
create risks that are reasonably likely to have a material adverse effect on our firm.
As described above in “Long-Term Incentive Compensation Awards,”s long-term incentive compensation awards generally are
denominated in AB Holding Units that are not distributed until subsequent years, so the ultimate value that the employee
derives from the award depends on the long-term performance of the firm. Denominating the award in restricted AB Holding
Units and deferring their delivery is intended to sensitize employees to risk outcomes and discourage them from taking
excessive risks, whether relating to investments, operations, regulatory compliance and/or cyber security, that could lead to a
decrease in the value of the AB Holding Units and/or an adverse effect on the firm's long-term prospects. Furthermore, and as
noted above in “Long-Term Incentive Compensation Awards,”s generally all outstanding long-term incentive compensation
awards include a provision permitting us to “claw-back” the unvested portion of an employee’s long-term incentive
compensation award if the Compensation Committee determines that (i) the employee failed to adhere to existing risk
management policies and (ii) as a result of the employee’s failure, there has been or reasonably could be expected to be a
material adverse impact on our firm or the employee’s business unit.
Overview of Mr. Bernstein's Employment Agreement
Pursuant to the CEO Employment Agreement, Mr. Bernstein served as our President and CEO for an initial term that
commenced on May 1, 2017 and ended on May 1, 2020. The initial term automatically was extended for one additional year on
May 1, 2020 and automatically extends each May thereafter, unless the CEO Employment Agreement is terminated in
accordance with its terms (the “Employment Term”).
The terms of the CEO Employment Agreement were the result of arm’s length negotiations between Mr. Bernstein and senior
executives at AXA S.A., formerly AB's ultimate parent company ("AXA"), and EQH. The Board then approved the CEO
Employment Agreement after having considered, among other things, the compensation package provided to Mr. Bernstein’s
predecessor, the 2016 compensation and 2017 expected compensation of AB’s other executive officers and Mr. Bernstein’s
compensation at his former employer.
The Compensation Committee, during its regular meeting held in December 2018, amended the CEO Employment Agreement
such that any annual equity award granted to Mr. Bernstein in 2018 and subsequent years during the Employment Term will be
granted in all respects in accordance with AB's compensation practices and policies generally applicable to AB's executive
officers as in effect from time to time (the "SPB First Amendment").
Additionally, the Compensation Committee, during its regular meeting held in December 2019, further amended the CEO
Employment Agreement by:
•
increasing Mr. Bernstein’s severance payments if his employment is terminated involuntarily, without cause, from one year’s
base salary and bonus to one and a half year’s base salary and bonus;
• excluding from the definition of change in control AB Holding ceasing to be publicly traded;
•
removing from the circumstances that give rise to Mr. Bernstein’s ability to terminate the agreement for “good reason” his
ceasing to be the CEO of a publicly traded entity; and
• eliminating Mr. Bernstein’s entitlement to a gross-up for any excise tax on his parachute payments, which would have been
pertinent only if Mr. Bernstein had been terminated involuntarily prior to December 31, 2019.
Elements of Mr. Bernstein’s Compensation
Base Salary
Mr. Bernstein’s annual base salary under the CEO Employment Agreement has been, and continues to be, $500,000. This
amount is consistent with our firm’s policy to keep base salaries of executives and other highly-compensated employees low in
relation to total compensation. Any future increase to Mr. Bernstein's base salary is entirely at the discretion of the
Compensation Committee.
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Part III
Cash Bonus
Under the CEO Employment Agreement, Mr. Bernstein is entitled to be paid a cash bonus at a target level of $3,000,000 in each
year during the Employment Term, subject to review and increase from time to time by the Compensation Committee, in its sole
discretion. As a result of a review of Mr. Bernstein's performance during 2023 by the Compensation Committee, Mr. Bernstein
was paid a cash bonus of $4,515,000. In determining Mr. Bernstein's cash bonus, the Compensation Committee considered the
progress AB made in advancing its Growth Strategy, Mr. Bernstein's performance in light of the target metrics included in his
performance scorecard and Mr. Bernstein's individual achievements during 2023, as described above.
Restricted AB Holding Units
Commencing in 2018 and during the remainder of the Employment Term, Mr. Bernstein is eligible to receive annual equity
awards with a grant date fair value equal to $3,500,000, subject to review and increase by the Compensation Committee, in its
sole discretion, in accordance with AB’s compensation practices and policies generally applicable to the firm’s executive
officers as in effect from time to time. The Compensation Committee approved an equity award to Mr. Bernstein with a grant
date fair value equal to $4,165,000 during November 2023. The Compensation Committee determined Mr. Bernstein's equity
award based on the review process described above. As a result of the SPB First Amendment, the equity award granted to
Mr. Bernstein in December 2023 is subject to the same ICAP-related terms and conditions as awards granted to other executive
officers at that time, which terms and conditions are described above in "Compensation Elements for NEOs - Long-TerTT mrr
Incentive Compensation Awards."
Perquisites and Benefits
Under the CEO Employment Agreement, Mr. Bernstein is eligible to participate in all benefit plans available to executive officers
and, for his safety and accessibility, a company car and driver for business and personal use.
Severance and Change in Control Benefits
The CEO Employment Agreement includes severance and change-in-control provisions, which are highlighted below. These
provisions also are described in a compensatory table below entitled, “Potential Payments upon Termination or Change in
Control.” We believe that these severance and change-in-control provisions assist in retaining our CEO and, in the event of a
change in control, provide protection to Mr. Bernstein so he is not distracted by personal or financial situations at a time when
AB needs him to remain focused on his responsibilities.
If Mr. Bernstein is terminated without “cause” or resigns for “good reason” (as such terms are defined in the CEO Employment
Agreement), and he signs and does not revoke a waiver and release of claims, he will receive the following:
• A cash payment equal to (a) the sum of his current base salary and his bonus opportunity amount, multiplied by one (1), if
Mr. Bernstein resigns for "good reason," or (b) the sum of his current base salary and his bonus opportunity amount,
multiplied by one and a half (1.5), if Mr. Bernstein's employment is terminated other than for "cause," or because of his death
or disability;
• a pro rata bonus based on actual performance for the fiscal year in which the termination occurs;
• monthly payments equal to the cost of COBRA coverage for the COBRA coverage period; and
•
following the COBRA coverage period, access to participation in AB’s medical plans as in effect from time to time at
Mr. Bernstein’s (or his spouse’s) sole expense.
If, during the 12 months following a change in control, Mr. Bernstein is terminated without cause or resigns for good reason, he
will receive the amounts described above, except that he will receive a cash payment equal to two (2) times the sum of his
current base salary and his bonus opportunity amount.
In the event any payments constitute “golden parachute payments” within the meaning of Section 280G of the Code and would
be subject to an excise tax imposed by Section 4999 of the Code, such payments will be reduced to the maximum amount that
does not result in the imposition of such excise tax, but only if such reduction results in Mr. Bernstein receiving a higher net-
after tax amount than he would receive absent such reduction.
Mr. Bernstein is subject to a confidentiality provision, in addition to covenants with respect to non-competition during his
employment and six months thereafter and non-solicitation of customers and employees for 12 months following his
termination of employment.
A change in control is defined as, among other things, EQH and its majority-owned subsidiaries ceasing to control the election
of a majority of the Board.
2023 Annual Report
161
Part III
Mr. Bernstein negotiated the severance and change-in-control provisions described immediatelyl above to have the security and
flexibility to focus on the business and preserve the value of his long-term incentive compensation. The Board, AXA and EQH
determined that these provisions were reasonable and appropriate because they were necessary to recruit and retain
Mr. Bernstein and provided Mr. Bernstein with effective incentives for future performance.
The Board, AXA and EQH also concluded that the change-in-control and termination provisions in the CEO Employment
Agreement fit within AB’s overall compensation objectives because these provisions, which align with AB’s goal of providing its
executives with effective incentives for future performance, also:
• permitted AB to recruit and retain a highly-qualified CEO;
• aligned Mr. Bernstein’s long-term interests with those of AB’s Unitholders and clients;
• were consistent with AXA’s, EQH's and the Board’s expectations with respect to the manner in which AB and AB Holding
would be operated during Mr. Bernstein’s tenure; and
• were consistent with the Board’s expectations that Mr. Bernstein would not be terminated without cause and that no steps
would be taken that would provide him with the ability to terminate the agreement for good reason.
Compensation awarded by EQH to Mr. Bernstein, Mr. Erzan and Ms. Burke
In February 2023, EQH granted to Mr. Bernstein,
Management Committee:
in connection with his membership on and service to the EQH
• a restricted stock unit award (for EQH common stock) with a grant date fair value of $332,029; and
• a performance share award (for EQH common stock) with a grant date fair value of $498,025, which can be earned subject
to EQH’s total shareholder return relative to its peer group.
Additionally, in February 2023, EQH granted to each of Mr. Erzan and Ms. Burke, in connection with their membership on and
service to the EQH Management Committee:
• a restricted stock unit award (for EQH common stock) with a grant date fair value of $40,024; and
• a performance share award (for EQH common stock) with a grant date fair value of $60,012, which can be earned subject to
EQH’s total shareholder return relative to its peer group.
Assumptions made in determining the EQH restricted stock unit and performance share figures discussed above are described
in footnotes to the compensatory tables below entitled "Summary Compensation Table for 2023" and "Grants of Plan-Based
Awards in 2023."
Mr. Bernstein and Mr. Erzan may receive additional equity or cash compensation from EQH in the future related to their
continued membership on and service to the EQH Management Committee. Ms. Burke, who resigned as our firm's COO and
CFO in May 2023 (and from the EQH Management Committee), forfeited her awards and is ineligible for additional awards.
CEO Pay Ratio
In 2023, the compensation of Mr. Bernstein, our President and CEO, was approximately 65 times the median pay
employees, resulting in a 65:1 CEO Pay Ratio.
fof our
We identiffied our median employee by examining 2023 total compensation ffor all individuals, excluding Mr. Bernstein, who
were employed by our ffirm as fof December 31, 2023, the last day fof our payroll year. We included all
fof our employees in this
process, whether employed on a ffull-time or part-time basis. We did not make any assumptions or estimates with respect to
total compensation, but we did adjust compensation paid to our non-U.S. employees during our 2023 ffiscal year based on the
average monthly exchange rates ffor the three-month period ending September 30, 2023 (d(data compiled in ffourth quarte )r)
between the local currencies in which such employees are paid and U.S. dollars. We define “total compensation” as the
aggregate fof base salary ((plus overtime, as applicable)), commissions ((as applicable)), cash bonus and the grant date ffair value
fof long-term incentive compensation awards.
fAfter identiffying the median employee based on total compensation, we calculated total compensation in 2023 ffor such
employee using the same methodology we use ffor our NEOs as set fforth below in the Summary Compensation Table ffor 2023.
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AllianceBernstein
As illustrated in the table below, our 2023 CEO Pay Ratio is 65:1:
Base salary ($)
Cash bonus ($)
Stock awards ($)(1)
All other compensation ($)(2)
Total ($)
2023 CEO Pay Ratio
Part III
Seth Bernstein
Median Employee
500,000
4,515,000
4,995,054
114,201
10,124,255
65:1
120,000
30,000
—
5,988
155,988
(1)
Includes (i) an award granted by AB of restricted AB Holding Units with a grant date fair value of $4,165,000 and (ii) awards granted by EQH
with an aggregate grant date fair value of $830,054, as more fully described above in “Compensation awarded by EQH to Mr. Bernstein, Mr.
Erzarr n and Ms. Burke.” For additional information, please refer to the compensatory tables below in this Item 11.
(2) For a description of Mr. Bernstein’s other compensation, please refer to the Summaryr Compensation Table for 2023 below. The median
employee's other compensation consists of a $5,988 contribution match under the AB Profit Sharing Plan.
Other Compensation-Related Matters
AB and AB Holding are, respectively, private and public limited partnerships. They are subject to taxes other than federal and
state corporate income tax (see “Structure-related Risks” in Item 1A and Note 21 to AB’s consolidated financial statements in
Item 8). Accordingly, Section 162(m) of the Code, which limits tax deductions relating to executive compensation otherwise
available to an entity taxed as a corporation, is not applicable to either AB or AB Holding for 2023.
Compensation Committee Interlocks and Insider Participation
Mr. Pearson is a director and the President and CEO of EQH, the parent company of the General Partner.
No executive officer of AB serves as (i) a member of a compensation committee or (ii) a director of another entity, an executive
officer of which serves as a member of AB’s Compensation Committee.
Compensation Committee Report
The members of the Compensation Committee reviewed and discussed with management the Compensation Discussion and
Analysis set forth above and, based on such review and discussion, recommended to the Board its inclusion in this Form 10-K.
Charles Stonehill (Chair)
Daniel Kaye
Mark Pearson
2023 Annual Report
163
Part III
Summary Compensation Table for 2023
Total compensation of our NEOs for 2023, 2022 and 2021, as applicable, is as follows:
Name and Principal Position
Seth Bernstein(3) (4)
President and CEO
Bill Siemers(6)
Interim CFO
Karl Sprules
COO
Onur Erzan(5) (6)
Head of Global Client Group
and Private Wealth
Mark Manley(6)
General Counsel and
Corporate Secretary
Kate Burke(5) (7)
Former COO and CFO
Year
Salary
($)
Bonus
($)
Stock
Awards(1)(2)
($)
Option
Awards
($)
Pension
($)
All Other
Compensation
($)
Total
($)
2023
500,000 4,515,000
4,995,054
2022
500,000 4,925,000
5,575,062
2021
2023
500,000 5,575,000
645,000
300,000
6,075,000
255,000
2022
300,000
525,000
1,175,034
2023
400,000 2,025,000
1,575,000
2022
400,000 1,555,000
1,105,000
2021
400,000 1,725,000
1,275,000
2023
2022
400,000 2,905,851
400,000 1,955,851
2,555,887
1,605,886
2023
300,000
780,000
345,000
2022
300,000
780,000
345,000
2023
273,846
—
100,036
2022
400,000 2,050,000
1,700,035
2021
400,000 2,275,000
1,925,000
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
3,018
122,835
—
—
—
114,201 10,124,255
277,777 11,277,839
142,813 12,292,813
1,217,340
17,340
17,340
2,017,374
32,294
4,035,312
17,860
3,200,695
42,040
3,442,040
17,544
11,017
5,879,282
3,972,754
22,934
482,194
26,898
1,474,832
26,898
1,934,092
—
—
—
632
374,514
16,216
4,166,251
15,455
4,615,455
(1) The figures in the “Stock Awards” column provide the aggregate grant date fair value of the awards calculated in accordance with FASB
ASC Topic 718. For the assumptions made in determining the AB Holding Unit award values, see Note 19 to AB’s consolidated financial
statements in Item 8. Assumptions made in determining the EQH restricted stock unit and performance share figures in the "Stock Awards"
column are set forth in the EQH 2023 Long-Term Incentive Compensation Program and described in a footnote to the "Grants of Plan-
Based Awards in 2023" table below.
(2) See “Grants of Plan-Based Awards in 2023” below.
(3) See "Overview of Mr. Bernstein's Employmeyy
nt Agreement" and "Compensation Awarded by EQH to Mr. Bernstein, Mr. Erzarr n and Ms. Burke"
above in CD&A for a description of Mr. Bernstein's compensatory elements. Please be advised that Mr. Bernstein's compensation also is
disclosed by EQH.
(4) The "Stock Awards" column for 2023 includes the grant date fair value of the restricted stock award (grant date fair value of $332,029) and
the performance share award (grant date fair value of $498,025) Mr. Bernstein received from EQH in February 2023. For 2022, this column
includes the grant date fair value of the restricted stock unit award (grant date fair value of $400,033) and the performance share award
(grant date fair value of $600,029) Mr. Bernstein received from EQH in February 2022. For 2021, this column includes the grant date fair
value of the restricted stock unit award (grant date fair value of $340,000) and the performance share award (grant date fair value of
$510,000) Mr. Bernstein received from EQH in February 2021.
(5) The "Stock Awards" column for 2023 includes the grant date fair value of the restricted stock unit award (grant date fair value of $40,024)
and the performance share award (grant date fair value of $60,012) Mr. Erzan and Ms. Burke each received from EQH in February 2023. For
2022, this column includes the grant date fair value of the restricted stock unit award (grant date fair value of $40,021) and the
performance share award (grant date fair value of $60,014) Mr. Erzan and Ms. Burke each received from EQH in February 2022. For 2021,
this column includes the grant date fair value of the restricted stock unit award (grant date fair value of $40,000) and the performance
share award (grant date fair value of $60,000) Ms. Burke received from EQH in February 2021.
(6) We have not provided 2021 compensation for Messrs. Siemers, Erzan, or Manley; they were not deemed NEOs in those years.
(7) Ms. Burke resigned as our firm's COO and CFO in May 2023 to become the President at another company. As a result, she forfeited all
unvested AB and EQH awards granted to her in the current and previous years.
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AllianceBernstein
The “All Other Compensation” column includes the aggregate incremental cost to our company of certain other expenses and
perquisites. For 2023, this column includes the following:
Part III
Name
Seth Bernstein
Bill Siemers
Karl Sprules
Onur Erzan
Mark Manley
Kate Burke
Personal
Use of Car
and Driver
($)
94,113 (1)
—
—
—
—
—
Contributions
to Profit
Sharing Plan
($)
Life
Insurance
Premiums
($)
16,500
15,000
16,500
16,500
15,000
—
3,564
1,980
4,002
630
11,484
632
Other(2)
($)
24
360
11,792
414
414
—
(1) Mr. Bernstein is entitled to the use of a dedicated car and driver pursuant to his employment agreement for security and business
purposes. The amount reflects Mr. Bernstein's personal use for commuting and other non-business use. Car and driver services were
contracted through a third party. The cost of providing a car is determined annually and includes, as applicable, the cost of the driver,
annual car lease, insurance cost and various miscellaneous expenses such as fuel and car maintenance.
(2) These amounts represent stipends paid to Messrs. Bernstein, Siemers, Erzan, and Manley to help cover the cost of a mobile phone; these
stipends are paid to employees generally as well. The amount set forth in the table for Mr. Sprules represents a stipend to help cover a
portion of the housing cost in New York while traveling for business.
2023 Annual Report
165
Part III
Grants of Plan-Based Awards in 2023
Grants of awards under the 2017 Plan, our equity compensation plan, during 2023 made to our NEOs are as follows (we also
discuss awards issued by EQH to Mr. Bernstein, Mr. Erzan, and Ms. Burke below ):
Name
Seth Bernstein(2)(3)
Bill Siemers(2)
Karl Sprules(2)
Onur Erzan(2)(3)
Mark Manley(2)
Kate Burke(3)(4)
Estimated Future Payouts Under Equity
Incentive Plan Awards(3)
Threshold
(#)
Target
(#)
Maximum
(#)
All Other
Stock Awards:
Number of Shares
of Stock
or Units
(#)
Grant Date
Fair Value
of Stock
Awards(1)
($)
136,289
4,165,000
3,187
12,747
25,494
384
1,536
3,072
10,129
12,747
8,344
51,538
80,362
1,221
1,536
332,029
498,025
255,000
1,575,000
2,455,851
40,024
60,012
11,289
345,000
1,221
1,536
40,024
60,012
Grant Date
12/12/2023
2/15/2023
2/15/2023
12/12/2023
12/12/2023
12/12/2023
2/15/2023
2/15/2023
12/12/2023
2/15/2023
2/15/2023
(1) This column provides the aggregate grant date fair value of the awards calculated in accordance with FASB ASC Topic 718. For the
assumptions made in determining the AB Holding Unit values, see Note 19 to AB's consolidated financial statements in Item 8.
(2) As discussed above in “Overview of 2023 Incentive Compensation Program” and “Compensation Elements for NEOs—Long-Term Incentive
Compensation Awards,”s long-term incentive compensation awards granted in December 2023 to our NEOs were denominated in restricted
AB Holding Units. These awards vest in equal annual increments on each of December 1, 2024, 2025 and 2026. These awards are shown in
the “All Other Stock Awards” column of this table, the “Stock Awards” column of the Summary Compensation Table for 2023 and the “AB
Holding Unit and/or EQH Awards” columns of the Outstanding Equity Awards at 2023 Fiscal Year-End Table.
(3)
In February 2023, EQH granted to each of Mr. Bernstein, Mr. Erzan and Ms. Burke (i) a restricted stock unit award with a grant date fair
value of $332,029, $40,024, and $40,024, respectively, and (ii) a performance share award with a grant date fair value of $498,025, $60,012,
and $60,012, respectively, which can be earned subject to EQH's total stockholder return ("TSR") relative to its peer group. TSR is the total
amount a company returns to investors during a designated period, including both share price appreciation and dividends. The number of
performance shares that are earned, which cliff vest on February 28, 2026, subject to continued service, will be determined at the end of the
performance period (December 2025) by multiplying the number of unearned performance shares by one of the following performance
factors: 200% if EQH's TSR relative to its peers is in the 87.5th percentile or greater; 100% if in the 50th percentile; 25% if in the 30th
percentile; and nothing if falls below the 30th percentile. EQH performance shares receive dividend equivalents subject to the same vesting
schedule and performance conditions as the performance shares themselves. The restricted stock unit awards, which vest in equal annual
increments on each of February 28, 2024, 2025 and 2026, subject to continued service, increase or decrease in value depending on the
price of an EQH common share. EQH restricted stock units receive dividend equivalents subject to the same vesting schedule as the
restricted stock units themselves.
(4) Ms. Burke forfeited these awards.
In 2023, the number of restricted AB Holding Units comprising year-end long-term incentive compensation awards granted to
each NEO was determined based on the closing price of an AB Holding Unit as reported for NYSE composite transactions on
December 12, 2023, the date as of which the Compensation Committee approved the awards. At the time of these awards, the
Compensation Committee consisted of Mr. Stonehill (Chair) and Messrs. Kaye and Pearson; the Section 16 Subcommittee,
which approved awards to our NEOs, consisted of Mr. Stonehill (Chair) and Mr. Kaye. For further information regarding the
material terms of such awards, including the vesting terms and the formulas or criteria to be applied in determining the
amounts payable, please refer to "Overview of 2023 Incentive Compensation Program" and "Compensation Elements for
NEOs" above.
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Part III
Outstanding Equity Awards at 2023 Fiscal Year-End
Outstanding equity awards held by our NEOs as of December 31, 2023 are as follows:
Option Awards
Number of
Securities
Underlying
Unexercised
Options
Unexercisable
(#)
Option
Exercise
Price
($)
Option
Expiration
Date
AB Holding Unit and/or EQH
Awards
Number of
Shares
or Units of
Stock That
Have Not
Vested
(#)
Market
Value of
Shares or
Units of
Stock That
Have Not
Vested(11)
($)
—
—
—
—
—
—
—
—
—
—
18.74
2/14/2029
278,875
8,653,482
23.18
2/26/2030
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
22,972
38,731
35,289
87,882
764,964
1,289,758
1,095,017
2,726,981
193,050
5,990,341
2,589
4,293
22,235
—
86,202
142,944
689,951
—
Number of
Securities
Underlying
Unexercised
Options
Exercisable
(#)
65,446
57,209
—
—
—
—
—
—
—
—
Name
Seth Bernstein(1)(2)(3)(5)
Bill Siemers(6)
Karl Sprules(7)
Onur Erzan(4)(5)(8)
Mark Manley(9)
Kate Burke(5)(10)
(1) Mr. Bernstein was awarded: (i) 136,289 restricted AB Holding Units in December 2023 that are scheduled to vest in equal increments on
each December 1, 2024, 2025 and 2026; (ii) 117,791 restricted AB Holding Units in December 2022, one-third of which vested on December
1, 2023, and the remainder of which is scheduled to vest in equal increments on each of December 1, 2024 and 2025; (iii) 102,572 restricted
AB Holding Units in December 2021, one-third of which vested on each of December 1, 2022 and 2023, and the remainder of which is
scheduled to vest on December 1, 2024; and (iv) 119,471 restricted AB Holding Units in December 2020, of which 25% vested on each of
December 1, 2021, 2022 and 2023, and the remainder of which is scheduled to vest on December 1, 2024. For further information, see
“Overview of Mr. Bernstein's Employmeyy
nt Agreement” above.
(2) EQH restricted stock unit awards, which are described for Mr. Bernstein in the second line of data in the above table, will vest ratably over
their three-year vesting period subject to continued employment during the vesting period. EQH performance share awards, which are
described in the third line of data in the above table, cliff vest on the third anniversary of grant date subject to continued employment during
the vesting period and meeting the applicable performance criteria. In February 2023, 2022 and 2021, EQH granted to Mr. Bernstein (i) a
restricted stock unit award with a grant date fair value of $332,029, $400,033 and $340,000, respectively, and (ii) a performance share
award with a grant date fair value of $498,025, $600,029 and $510,000, respectively. The performance share awards granted in 2023, 2022
and 2021 can be earned subject to EQH's TSR relative to its peer group. Please see the table above entitled "Grants of Plan-Based Awards in
2023" for additional information regarding the EQH awards.
(3) The option awards described in the table were issued by EQH and calculated in accordance with FASB ASC Topic 718. The fair value of
EQH stock options is calculated by EQH using the Black-Scholes option pricing model. The expected EQH dividend rate is based on market
consensus. EQH share price volatility is estimated on the basis of implied volatility, which is checked by EQH against an analysis of
historical volatility to ensure consistency. The effect of expected early exercise is accounted for through the use of an expected life
assumption based on historical data.
(4) EQH restricted stock unit awards, which are described for Mr. Erzan in the second line of data in the above table, will vest ratably over their
three-year vesting period subject to continued employment during the vesting period. EQH performance share awards, which are described
in the third line of data in the above table, cliff vest on the third anniversary of grant date subject to continued employment during the
vesting period and meeting the applicable performance criteria. In February 2023, 2022 and 2021, respectively, EQH granted to Mr. Erzan (i)
a restricted stock unit award with a grant date fair value of $40,024, $40,021 and $40,000, respectively and (ii) a performance share award
with a grant date fair value of $60,012, $60,014 and $60,000, respectively, which can be earned subject to EQH's total shareholder return
relative to its peer group. Please see the table above entitled "Grants of Plan-Based Awards in 2023" for additional information regarding the
EQH awards.
(5) For further information regarding the equity awards granted to Mr. Bernstein, Mr. Erzan and Ms. Burke by EQH, please see "Compensation
awarded by EQH to Mr. Bernstein, Mr. Erzarr n and Ms. Burke" above in CD&A.
2023 Annual Report
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Part III
(6) Mr. Siemers was awarded: (i) 8,344 restricted AB Holding Units in December 2023 that are scheduled to vest in equal increments on each
of December 1, 2024, 2025 and 2026; and (ii) 4,506 restricted AB Holding Units in December 2022, of which one-third vested on
December 1, 2023, and the remainder of which is scheduled to vest in equal increments on each of December 1, 2024 and 2025; and (iii)
21,873 restricted AB Holding Units in March 2022 that are scheduled to cliff vest in February 2024. The total AB Holding Unit figure set forth
in the table includes AB Holding Units granted in years prior to when Mr. Siemers was deemed to be a NEO.
(7) Mr. Sprules was awarded (i) 51,538 restricted AB Holding Units in December 2023 that are scheduled to vest in equal increments on each
of December 1, 2024, 2025 and 2026; and (ii) 28,450 restricted AB Holding Units in December 2022, of which one-third vested on
December 1, 2023, and the remainder of which is scheduled to vest in equal increments on each of December 1, 2024 and 2025; and (iii)
25,030 restricted AB Holding Units in December 2021, one-third of which vested on December 1, 2022 and December 1, 2023, and the
remainder of which is scheduled to vest on December 1, 2024. The total AB Holding Unit figure set forth in the table includes AB Holding
Units granted in years prior to when Mr. Sprules was deemed to be a NEO.
(8) Mr. Erzan was awarded: (i) 80,362 restricted AB Holding Units in December 2023 that are scheduled to vest in equal increments on each of
December 1, 2024, 2025 and 2026; and (ii) 38,771 restricted AB Holding Units in December 2022, of which one-third vested on December 1,
2023, and the remainder of which is scheduled to vest in equal increments on each of December 1, 2024 and 2025. The total AB Holding
Unit figure set forth in the table includes AB Holding Units granted in a year prior to when Mr. Erzan was deemed to be a NEO.
(9) Mr. Manley was awarded: (i) 11,289 restricted AB Holding Units in December 2023 that are scheduled to vest in equal increments on each
of December 1, 2024, 2025 and 2026; and (ii) 8,883 restricted AB Holding Units in December 2022, of which one-third vested on
December 1, 2023, and the remainder of which is scheduled to vest in equal increments on each of December 1, 2024 and 2025. The total
AB Holding Unit figure set forth in the table includes AB Holding Units granted in years prior to when Mr. Manley was deemed to be a NEO.
(10) Ms. Burke had no outstanding awards as of December 31, 2023, because she forfeited her unvested AB Holding Unit and EQH share
awards as a result of her resignation in May 2023.
(11) The market values of restricted AB Holding Units (rounded to the nearest whole unit) set forth in this column were calculated assuming a
price per AB Holding Unit of $31.03, which was the closing price on the NYSE of an AB Holding Unit on December 29, 2023, the last trading
day of AB's last completed fiscal year. The market values of EQH shares set forth in this column were calculated assuming a price per
share of $33.30, which was the closing price on the NYSE of an EQH share on December 29, 2023.
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AllianceBernstein
Option Exercises and AB Holding Units and EQH Shares Vested
in 2023
AB Holding Units and EQH shares held by our NEOs that vested during 2023 are as follows:
Part III
Name
Seth Bernstein (1)
Bill Siemers
Karl Sprules
Onur Erzan (2)
Mark Manley
Kate Burke (2)
AB Holding Unit and EQH
Option Awards
AB Holding Unit and EQH Share
Awards
Number of AB
Holding Units
or EQH
Options
Acquired on
Exercise
(#)
Value Realized
on Exercise
($)
—
—
—
—
—
—
—
—
—
—
—
—
Number of AB
Holding Units
or EQH Shares
Acquired on
Vesting
(#)
Value Realized
on Vesting
($)
177,203
5,243,842
4,815
35,861
25,475
10,854
898
140,071
1,043,190
743,185
315,754
28,245
(1)
(2)
Includes 39,099 EQH shares acquired with a value of $1,226,384 that vested during 2023.
Includes 898 EQH shares acquired with a value of $28,245 that vested during 2023.
2023 Annual Report
169
Part III
Pension Benefits
Name
Karl Sprules (1)
Mark Manley(1)
Plan Name
AB Retirement Plan
AB Retirement Plan
Number of Years of
Credited Service(2)
Present Value of
Accumulated Benefit ($)(3)
Payments During Last
Fiscal Year
11
25
125,853
505,128
—
—
(1) We have provided information for Messrs. Sprules and Manley; they are the only of our NEOs who participate in the AB Retirement Plan. For
additional information regarding the AB Retirement Plan, including actuarial assumptions and potential early retirement benefits, see
"Definff ed Benefit Plan" above in CD&A and Note 18 to AB's consolidated financial statements in Item 8 of this Form 10-K.KK
(2) Effective December 31, 2008, benefit accruals were frozen under the AB Retirement Plan.
(3) Actuarial present value of accumulated benefits as of December 31, 2023 using assumptions consistent with ASC 715 calculations, with
the following exceptions: (i) retirement age assumed to be the Nominal Retirement Age (as defined in the AB Retirement Plan); and (ii) no
pre-retirement mortality, disability or termination assumed.
Potential Payments upon Termination or Change in Control
Estimated payments and benefits to which our NEOs would have been entitled upon a change in control of AB or the specified
qualifying events of termination of employment as of December 31, 2023 are as follows:
Name and Trigger Event
Seth Bernstein
Change in control
Termination by Mr. Bernstein for good reason(4)
Termination of Mr. Bernstein's employment by AB other than for Cause or due to
Death or Disability(5)(6)(7)
Change in control + termination by Mr. Bernstein for good reason or termination
of Mr. Bernstein's employment without cause(4)
((
Resignation (complies with applicable agreements and restrictive covenants)
under ICAP(8)
Death or disability(7)
Bill Siemers
Change in control
Change in control + employment terminated by AB other than for cause,
termination by Mr. Siemers for good reason, or termination due to death
or disability
Resignation, retirement or termination by AB without cause (complies with
applicable agreements and restrictive covenants) under ICAP; death or disability
under ICAP; excludes 2022 RSU award)(7)(8)
Termination by AB without cause; death or disability (2022 RSU award)
Karl Sprules
Change in control
Change in control + employment terminated by AB other than for cause,
termination by Mr. Sprules for good reason, or termination due to death
or disability
Resignation, retirement or termination by AB without cause (complies with
gg
gg
applicable agreements and restrictive covenants) under ICAP; death or disability
under ICAP(7
)(
8)
4,850,000
2,726,981
—
2,726,981
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AllianceBernstein
Acceleration of
Restricted
AB Holding Unit
Awards(2)
($)
Other
Benefits(3)
($)
Cash
Payments(1)
($)
—
8,653,482
—
3,500,000
8,653,482
19,982
5,250,000
8,653,482
19,982
7,000,000
8,653,482
19,982
—
—
—
8,653,482
—
8,653,482
19,982
1,095,017
1,890,000
1,095,017
—
—
—
416,298
621,999
2,726,981
—
—
—
—
—
—
—
Name and Trigger Event
Onur Erzan
Change in control
Change in control + employment terminated by AB other than for cause,
termination by Mr. Erzan for good reason, or termination due to death
or disability
Resignation, retirement or termination by AB without cause (complies with
applicable agreements and restrictive covenants) under ICAP; death or disability
under ICAP; excludes 2021 RSU award)(7)(8)
Termination by AB without cause; death or disability (2021 RSU award)
Mark Manley
Change in control
Change in control + employment terminated by AB other than for cause,
termination by Mr. Manley for good reason, or termination due to death
or disability
Resignation, retirement or termination by AB without cause (complies with
gg
applicable agreements and restrictive covenants) under ICAP; death or disability
under ICAP)(7
)(8)
Kate Burke(9)
Part III
Acceleration of
Restricted
AB Holding Unit
Awards(2)
($)
Other
Benefits(3)
($)
Cash
Payments(1)
($)
—
5,990,341
6,611,702
5,990,341
—
—
—
3,657,258
1,783,738
689,951
2,160,000
689,951
—
—
689,951
—
—
—
—
—
—
—
—
—
(1)
It is possible that each NEO could receive a cash severance payment on the termination of his or her employment that is not contemplated
in the CIC Plan. The amounts of any such cash severance payments would be determined at the time of such termination (other than for
Mr. Bernstein), so we are unable to estimate such amounts. The amounts shown for Mr. Bernstein are described in the CEO Employment
Agreement. The amounts shown for Mr. Siemers, Mr. Sprules, Mr. Erzan, and Mr. Manley in the event of a change in control coupled with
termination of employment are described in the CIC Plan.
(2) See Notes 2 and 19 in AB’s consolidated financial statements in Item 8 and “Long-Term Incentive Compensation Awards” above in CD&A for a
discussion of the terms set forth in long-term incentive compensation award agreements relating to termination of employment.
(3) Reflects the value of group medical coverage to which Mr. Bernstein would be entitled.
(4) See "Overview of Mr. Bernstein's Employmeyy
relating to termination of employment.
nt Agreement" above for a discussion of the terms set forth in the CEO Employment Agreement
(5) The CEO Employment Agreement defines “Disability” as a good faith determination by AB that Mr. Bernstein is physically or mentally
incapacitated and has been unable for a period of 180 days in the aggregate during any 12-month period to perform substantially all of the
duties for which he is responsible immediately before the commencement of the incapacity.
(6) Under the CEO Employment Agreement, upon termination of Mr. Bernstein’s employment due to death or disability, and after the COBRA
period, AB will provide Mr. Bernstein and his spouse with access to participation in AB’s medical plans at Mr. Bernstein’s (or his spouse’s)
sole expense based on a reasonably determined fair market value premium rate.
(7)
“Disability” is defined in the ICAP award agreements of each NEO as the inability to engage in any substantial gainful activity by reason of
any medically determinable physical or mental impairment that can be expected to last for a continuous period of not less than 12 months,
as determined by the carrier of the long-term disability insurance program maintained by AB or its affiliate that covers the NEO.
(8) Applicable agreements and restrictive covenants in the ICAP award agreement include restrictions on competition and restrictions on
employee and client solicitation.
(9) Ms. Burke resigned as our firm's COO and CFO in May 2023, so she was ineligible for any potential payment or benefit upon a change in
control of AB as of December 31, 2023.
2023 Annual Report
171
Part III
Additionally, estimated payments and benefits to which Mr. Bernstein or Mr. Erzan would have been entitled upon a change in
control of EQH or the specified qualifying events of termination of employment as of December 31, 2023 are as follows (these
amounts would be payable by EQH):
Reason for Employment Termination
Seth Bernstein
Retirement(1)
Death(2)
Disability(2)
Involuntary termination (no change in control)(3)
Change in control (without termination of employment)(4)
Onur Erzan
Death(2)
Disability(2)
Involuntary termination (no change in control)(3)
Change in control (without termination of employment)(4)
Kate Burke(6)
Acceleration of EQH Option
and Share Awards(5)
($)
1,577,051
2,361,437
2,361,437
1,577,051
1,152,710
265,232
265,232
133,146
132,176
—
(1) Reflects, as of December 31, 2023, the full value of the restricted stock unit award and performance share award granted to Mr. Bernstein
in 2021 and 2022. Excludes restricted stock unit awards and performance share awards granted in 2023 due to minimum
vesting requirements.
(2) Reflects, as of December 31, 2023, the full value associated with awards granted by EQH to Mr. Bernstein (since 2021) and Mr. Erzan (since
2021); restricted stock unit awards (to each officer); and performance share awards (to each officer). For additional information regarding
these awards, please see the Summary Compensation Table for 2023, Grants of Plan-based Awards in 2023 and Outstanding Equityt at
2023 Fiscal Year End above in this Item 11.
(3) Reflects, as of December 31, 2023, (i) the full value of the restricted stock unit awards and performance share awards granted by EQH to
Mr. Bernstein in 2021 and 2022, and (ii) the prorated value of the restricted stock unit awards and performance share awards granted by
EQH to Mr. Erzan in 2021 and 2022. Restricted stock unit awards and performance share awards granted to Mr. Bernstein and Mr. Erzan in
2023 are excluded until a minimum of one year of vesting is reached.
(4) Reflects, as of December 31, 2023, (i) the full value of the restricted stock unit awards granted to Mr. Bernstein (in 2021, 2022 and 2023)
and to Mr. Erzan (in 2021, 2022 and 2023), and (ii) the prorated value of the performance share awards granted to Mr. Bernstein (in 2021,
2022, and 2023) and to Mr. Erzan (in 2021, 2022 and 2023), with actual and projected performance factors applied for 2021 and
2022 grants.
(5) Acceleration of EQH awards is contingent on the award recipient's compliance with various agreements and restrictive covenants set forth
in the applicable award agreement under the EQH 2023 Long-Term Incentive Compensation Program, including protection of confidential
information, non-competition, non-solicitation of employees and non-solicitation of customers.
(6) Ms. Burke resigned as our firm's COO and CFO (and from the EQH Management Committee) in May 2023, as such she was ineligible for
any potential payment or benefit upon a change in control of EQH as of December 31, 2023.
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Director Compensation in 2023
During 2023, we compensated our directors, who satisfied applicable NYSE and SEC standards relating to independence
(“Independent Directors”), as follows:
Part III
Name
Joan Lamm-Tennant
Nella Domenici (3)
Daniel Kaye
Kristi Matus
Das Narayandas
Charles Stonehill
Todd Walthall
Fees Earned or
Paid in Cash
($)
Stock
Awards(1)(2)
($)
140,000
102,500
99,000
49,197
100,875
142,500
104,750
170,000
170,000
170,000
—
170,000
170,000
170,000
Total
($)
310,000
272,500
269,000
49,197
270,875
312,500
274,750
(1) The aggregate number of restricted AB Holding Units underlying awards outstanding but not yet distributed at December 31, 2023, was: for
Ms. Lamm-Tennant, 8,861 AB Holding Units; for Ms. Domenici, 12,297 AB Holding Units; for Mr. Kaye, 11,711 AB Holding Units; for
Ms. Matus, zero AB Holding Units as she departed the Board in May of 2023; for Mr. Narayandas, 11,711 AB Holding Units; for Mr. Stonehill,
11,711 AB Holding Units; and for Mr. Walthall, 9,061 AB Holding Units.
(2) Reflects the aggregate grant date fair value of the awards calculated in accordance with FASB ASC Topic 718. For the assumptions made
in determining these values, see Note 19 to AB’s consolidated financial statements in Item 8.
(3) Ms. Domenici departed the Board effective January 16, 2024.
Independent Director Compensation Elements
The Board approved the compensation elements described immediatelyl below for Independent Directors during its regular
meeting held in May 2023 and has agreed to re-consider such compensation elements bi-annually:
• an annual retainer of $90,000 (paid quarterly after any quarter during which an Independent Director serves on the Board;
annual retainers relating to Committee service, as described below, are paid quarterly in arrears as well);
• an annual retainer of $50,000 for acting as Independent Chair of the Board;
• an annual retainer of $37,500 for acting as Chair of the Audit Committee;
• an annual retainer of $20,000 for acting as Chair of the Compensation Committee;
• an annual retainer of $13,500 for acting as Chair of the Governance Committee;
• an annual retainer of $12,500 for serving as a member of the Audit Committee;
• an annual retainer of $9,000 for serving as a member of the Compensation Committee;
• an annual retainer of $3,000 for serving as a member of the Governance Committee; and
• an annual equity-based grant under an equity compensation plan consisting of restricted AB Holding Units with a grant date
fair value of $170,000.
In 2023, the Board granted to each Independent Director then serving (which included Mses. Domenici and Lamm-Tennant and
Messrs. Kaye, Narayandas, Stonehill and Walthall) 5,017 restricted AB Holding Units. The number of AB Holding Units granted
was determined by dividing the $170,000 grant date fair value noted above by the closing price of an AB Holding Unit on the
date of the May 2023 Board Meeting, or $33.89 per unit, rounded up to the nearest whole unit. These awards vest ratably on
each of the first three anniversaries of the grant date.
Further, in order to avoid any perception that our directors’ exercise of their fiduciary duties might be impaired, restricted AB
Holding Unit grants to Independent Directors are not forfeitable, except if the director is terminated for “Cause,” as that term is
defined in the 2017 Plan or the applicable award agreement. Accordingly, restricted AB Holding Units generally are delivered as
soon as administratively feasible following an Independent Director’s resignation from the Board.
Equity grants to Independent Directors generally are made at the May meeting of the Board. The date of the May meeting is set
by the Board at least a year in advance.
2023 Annual Report
173
Part III
The General Partner may reimburse any director for reasonable expenses incurred in connection with attendance at Board
meetings as well as additional Board responsibilities. AB Holding and AB, in turn, reimburse the General Partner for expenses
including amounts in respect of directors’ fees and expenses. These
incurred by the General Partner on their behalf,
the AB Holding Partnership Agreement and the AB
reimbursements are subject
Partnership Agreement.
to any relevant provisions of
Independent Director AB Holding Unit Ownership Guidelines
Each Independent Director, by the later of five years from the initial implementation date of these guidelines (February 2018)
and the date as of which the director's tenure on the Board begins, shall accumulate, either through accumulating AB Holding
Units awarded by the Board or purchasing Units on the open market, AB Holding Units with a market value equal to five (5)
times the director's annual retainer. Each Independent Director must maintain this ownership level for the duration of the
director's tenure on the Board.
As of December 31, 2023, each Independent Director then serving either complied with this policy or was on track to do so
within the allotted time.
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Part III
Item 12. Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters
Securities Authorized for Issuance under Equity Compensation Plans
AB Holding Units to be issued pursuant to our equity compensation plans as of December 31, 2023 are as follows:
Equity Compensation Plan Information
Plan Category
Equity compensation plans approved by security holders
Equity compensation plans not approved by security holders
Total
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(1)
27,261,843
—
27,261,843
(1) All AB Holding Units remaining available for future issuance will be issued pursuant to the 2017 Plan, which was approved during a Special
Meeting of AB Holding Unitholders held on September 29, 2017.
There are no AB Units to be issued pursuant to an equity compensation plan.
For information about our equity compensation plans, see Note 19 to AB’s consolidated financial statements in Item 8.
Principal Security Holders
As of December 31, 2023, we had no information that any person beneficially owned more than 5% of the outstanding AB Units,
except as reported by EQH and certain of its subsidiaries. We have prepared the following table, and the note that follows, in
reliance on information supplied by EQH:
Name and Address of Beneficial Owner
Equitable Holdings(1)
1290 Avenue of the Americas
New York, NY 10104
Amount and Nature of
Beneficial Ownership
Reported on Schedule
Percent of
Class
177,127,982 (1)
61.2% (1)
(1) By reason of their relationships, EQH and its subsidiaries that hold AB Units may be deemed to share the power to vote or to direct the vote
and to dispose or direct the disposition of all or a portion of these AB Units. The 61.2% includes the 1.0% general partnership interest held
by EQH.
As of December 31, 2023, AB Holding was the record owner of 114,436,091, or 39.9%, of the issued and outstanding AB Units
(or 39.5% including the 1.0% general partnership interest held by EQH).
2023 Annual Report
175
Part III
Management
As of December 31, 2023, the beneficial ownership of AB Holding Units by each director and NEO of the General Partner and by
all directors and executive officers as a group is as follows:
Name of Beneficial Owner
Joan Lamm-Tennant(1)
Seth Bernstein(1)(2)
Nella Domenici
Jeffrey Hurd(1)
Daniel Kaye(1)
Nick Lane(1)
Das Narayandas
Mark Pearson(1)
Charles Stonehill(1)
Todd Walthall
Onur Erzan(1)(3)
Karl Sprules(1)(4)
Mark Manley(1)(5)
Bill Siemers(1)(6)
All directors and executive officers as a group (14 persons)(7)
Number of AB
Holding Units and
Nature of Beneficial
Ownership
Percent of Class
11,233
678,934
22,865
—
39,710
—
35,676
—
24,931
11,635
214,184
181,798
95,535
75,311
*
*
*
*
*
*
*
*
*
*
*
*
*
*
1,391,812
1.2%
* Number of AB Holding Units listed represents less than 1% of the Units outstanding.
(1) Excludes AB Holding Units beneficially owned by EQH and its subsidiaries. Ms. Lamm-Tennant and Messrs. Bernstein, Hurd, Kaye, Lane,
Pearson and Stonehill, each is a director and/or officer of EQH, Equitable Financial and/or Equitable America. Messrs. Bernstein, Erzan,
Sprules, Manley and Siemers each is a director and/or officer of the General Partner.
(2)
(3)
(4)
(5)
(6)
(7)
Includes 422,300 restricted AB Holding Units that have not yet vested or with respect to which Mr. Bernstein has deferred delivery. See
“Overview of Mr. Bernstein's Employmeyy
nt Agreement – Compensation Elements – Restricted AB Holding Units,” “Grants of Plan-based Awards
in 2023” and “Outstanding Equity Awards at 2023 Fiscal Year-Err ndEE ” in Item 11 for additional information.
Includes 193,050 restricted AB Holding Units granted to Mr. Erzan that have not yet vested. For information regarding Mr. Erzan's long-term
incentive compensation awards, see "Grants of Plan-based Awards in 2023” and “Outstanding Equityt Awards at 2023 Fiscal Year-Err ndEE ” in
Item 11.
Includes 87,882 restricted AB Holding Units granted to Mr. Sprules that have not yet vested. For information regarding Mr. Sprules's long-
term incentive compensation awards, see “Grants of Plan-based Awards in 2023" and “Outstanding Equityt Awards at 2023 Fiscal Year-Err ndEE ” in
Item 11.
Includes 22,235 restricted AB Holding Units granted to Mr. Manley that have not yet vested. For information regarding Mr. Manley's long-
term incentive compensation awards, see “Grants of Plan-based Awards in 2023” and “Outstanding Equityt Awards at 2023 Fiscal Year-Err ndEE ” in
Item 11.
Includes 35,289 restricted AB Holding Units granted to Mr. Siemers that have not yet vested. For information regarding Mr. Siemers's long-
term incentive compensation awards, see “Grants of Plan-based Awards in 2023” and “Outstanding Equityt Awards at 2023 Fiscal Year-Err ndEE ” in
Item 11.
Includes 760,756 restricted AB Holding Units awarded to the executive officers as a group as long-term incentive compensation that have
not yet vested and/or with respect to which the executive officer has deferred delivery.
176
AllianceBernstein
As of December 31, 2023, our directors and executive officers did not beneficially own any AB Units.
As of December 31, 2023, the beneficial ownership of the common stock of EQH by each director and named executive officer
of the General Partner and by all directors and executive officers as a group is as follows:
Part III
EQH Common Stock
Name of Beneficial Owner
Joan Lamm-Tennant
Seth Bernstein(1)
Nella Domenici
Jeffrey Hurd(2)
Daniel Kaye
Nick Lane(3)
Das Narayandas
Mark Pearson(4)
Charles Stonehill
Todd Walthall
Onur Erzan(5)
Karl Sprules
Mark Manley
Bill Siemers
All directors and executive officers as a group (14 persons)(6)
Number of Shares and
Nature of Beneficial
Ownership
Percent of Class
35,574
224,647
—
355,420
53,757
276,308
—
1,394,226
34,758
—
3,342
—
—
—
2,378,032
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
* Number of shares listed represents less than 1% of the outstanding EQH common stock.
(1)
(2)
(3)
(4)
(5)
(6)
Includes (i) 122,655 options Mr. Bernstein has the right to exercise within 60 days and (ii) 11,946 restricted stock units that will vest within
60 days and settle in EQH shares.
Includes (i) 209,833 options Mr. Hurd has the right to exercise within 60 days and (ii) 28,332 restricted stock units that will vest within 60
days and settle in EQH shares.
Includes (i) 109,417 options Mr. Lane has the right to exercise within 60 days and (ii) 31,932 restricted stock units that will vest within 60
days and settle in EQH shares.
Includes (i) 726,400 options Mr. Pearson has the right to exercise within 60 days and (ii) 128,942 restricted stock units that will vest within
60 days and settle in EQH shares.
Includes 1,344 restricted stock units that Mr. Erzan will vest within 60 days and settle in EQH shares.
Includes 1,168,305 options that may be exercised and 202,496 restricted stock units that will vest within 60 days and settle in EQH shares
for the directors and executive officers as a group.
2023 Annual Report
177
Part III
Partnership Matters
The General Partner makes all decisions relating to the management of AB and AB Holding. The General Partner has agreed
that it will conduct no business other than managing AB and AB Holding, although it may make certain investments for its own
account. Conflicts of interest, however, could arise between AB and AB Holding, the General Partner and the Unitholders of
both Partnerships.
Section 17-403(b) of the Delaware Revised Uniform Limited Partnership Act (“Delaware Act”) states in substance that, except
as provided in the Delaware Act or the applicable partnership agreement, a general partner of a limited partnership has the
liabilities of a general partner in a general partnership governed by the Delaware Uniform Partnership Law (as in effect on
July 11, 1999) to the partnership and to the other partners.
In addition, as discussed below,w Sections 17-1101(d) and
17-1101(f) of the Delaware Act generally provide that a partnership agreement may limit or eliminate fiduciary duties a partner
may be deemed to owe to the limited partnership or to another partner, and any related liability, provided that the partnership
agreement may not limit or eliminate the implied contractual covenant of good faith and fair dealing. Accordingly, while under
Delaware law a general partner of a limited partnership is liable as a fiduciary to the other partners, those fiduciary obligations
may be altered by the terms of the applicable partnership agreement. Each of the AB Partnership Agreement and AB Holding
Partnership Agreement (each, a “Partnership Agreement” and, together, the “Partnership Agreements”) sets forth limitations on
the duties and liabilities of the General Partner. Each Partnership Agreement provides that the General Partner is not liable for
monetary damages for errors in judgment or for breach of fiduciary duty (including breach of any duty of care or loyalty), unless
it is established (the person asserting such liability having the burden of proof) that the General Partner’s action or failure to act
involved an act or omission undertaken with deliberate intent to cause injury, with reckless disregard for the best interests of
the Partnerships or with actual bad faith on the part of the General Partner, or constituted actual fraud. Whenever the
Partnership Agreements provide that the General Partner is permitted or required to make a decision (i) in its “discretion” or
under a grant of similar authority or latitude, the General Partner is entitled to consider only such interests and factors as it
desires and has no duty or obligation to consider any interest of or other factors affecting the Partnerships or any Unitholder of
AB or AB Holding or (ii) in its “good faith” or under another express standard, the General Partner will act under that express
standard and will not be subject to any other or different standard imposed by either Partnership Agreement or applicable law
or in equity or otherwise. Each Partnership Agreement further provides that to the extent that, at law or in equity, the General
Partner has duties (including fiduciary duties) and liabilities relating thereto to either Partnership or any partner, the General
Partner acting under either Partnership Agreement, as applicable, will not be liable to the Partnerships or any partner for its
good faith reliance on the provisions of the Partnership Agreement.
In addition, each Partnership Agreement grants broad rights of indemnification to the General Partner and its directors, officers
and affiliates and authorizes AB and AB Holding to enter into indemnification agreements with the directors, officers, partners,
employees and agents of AB and its affiliates and AB Holding and its affiliates. The Partnerships have granted broad rights of
indemnification to officers and employees of AB and AB Holding. The foregoing indemnification provisions are not exclusive,
and the Partnerships are authorized to enter into additional indemnification arrangements. AB and AB Holding have obtained
directors and officers/errors and omissions liability insurance.
Each Partnership Agreement also allows transactions between AB and AB Holding and the General Partner or its affiliates, as
we describe in “Policies and Procedures Regarding Transactions with Related Persons” in Item 13, so long as such transactions
are on an arms-length basis. The Delaware courts have held that provisions in partnership or limited liability company
agreements that permit affiliate transactions so long as they are on an arms-length basis operate to establish a contractually-
agreed-to fiduciary duty standard of entire fairness on the part of the general partner or manager in connection with the
approval of affiliate transactions. Also, each Partnership Agreement expressly permits all affiliates of the General Partner to
compete, directly or indirectly, with AB and AB Holding, as we discuss in “Competition” in Item 1. The Partnership Agreements
further provide that, except to the extent that a decision or action by the General Partner is taken with the specific intent of
providing an improper benefit to an affiliate of the General Partner to the detriment of AB or AB Holding, there is no liability or
obligation with respect to, and no challenge of, decisions or actions of the General Partner that would otherwise be subject to
claims or other challenges as improperly benefiting affiliates of the General Partner to the detriment of the Partnerships or
otherwise involving any conflict of interest or breach of a duty of loyalty or similar fiduciary obligation.
Section 17-1101(c) of the Delaware Act provides that it is the policy of the Delaware Act to give maximum effect to the principle
of freedom of contract and to the enforceability of partnership agreements. Further, Section 17-1101(d) of the Delaware Act
provides in part that to the extent that, at law or in equity, a partner has duties (including fiduciary duties) to a limited
partnership or to another partner, those duties may be expanded, restricted, or eliminated by provisions in a partnership
agreement (provided that a partnership agreement may not eliminate the implied contractual covenant of good faith and fair
dealing). In addition, Section 17-1101(f) of the Delaware Act provides that a partnership agreement may limit or eliminate any or
all liability of a partner to a limited partnership or another partner for breach of contract or breach of duties (including fiduciary
duties); provided, however, that a partnership agreement may not limit or eliminate liability for any act or omission that
constitutes a bad faith violation of the implied contractual covenant of good faith and fair dealing. Decisions of the Delaware
courts have recognized the right of parties, under the above provisions of the Delaware Act, to alter by the terms of a
partnership agreement otherwise applicable fiduciary duties and liability for breach of duties. However, the Delaware courts
178
AllianceBernstein
Part III
have required that a partnership agreement make clear the intent of the parties to displace otherwise applicable fiduciary duties
(the otherwise applicable fiduciary duties often being referred to as “default” fiduciary duties). Judicial inquiry into whether a
partnership agreement is sufficiently clear to displace default fiduciary duties is necessarily fact driven and is made on a case
by case basis. Accordingly, the effectiveness of displacing default fiduciary obligations and liabilities of general partners
continues to be a developing area of the law and it is not certain to what extent the foregoing provisions of the Partnership
Agreements are enforceable under Delaware law.
Item 13. Certain Relationships and Related Transactions, and
Director Independence
Policies and Procedures Regarding Transactions with Related Persons
Each Partnership Agreement expressly permits EQH and its subsidiaries (collectively, “EQH Affiliates”), to provide services to
AB and AB Holding if the terms of the transaction are approved by the General Partner in good faith as being comparable to (or
more favorable to each such Partnership than) those that would prevail in a transaction with an unaffiliated party. This
requirement is conclusively presumed to be satisfied as to any transaction or arrangement that (i) in the reasonable and good
faith judgment of the General Partner meets that unaffiliated party standard, or (ii) has been approved by a majority of those
directors of the General Partner who are not also directors, officers or employees of an affiliate of the General Partner.
In practice, our management pricing committees review investment advisory agreements with EQH Affiliates, which is the
manner in which the General Partner reaches a judgment regarding the appropriateness of the fees. Other transactions with
EQH Affiliates are submitted to the Audit Committee for their review and approval. (See “Committees of the Board” in Item 10 for
details regarding the Audit Committee.) We are not aware of any transaction during 2023 between our company and any related
person with respect to which these procedures were not followed.
Our relationships with EQH Affiliates also are subject to applicable provisions of the insurance laws and regulations of New
York and other states. Under such laws and regulations, the terms of certain investment advisory and other agreements we
enter into with EQH Affiliates are required to be fair and equitable and charges or fees for services performed must be
reasonable. Also, in some cases, the agreements are subject to regulatory approval.
We have written policies regarding the employment of immediate family members of any of our related persons. Compensation
and benefits for all of our employees is established in accordance with our people practices, taking into consideration the
defined qualifications, responsibilities and nature of the role.
Financial Arrangements with EQH Affiliates
The General Partner has, in its reasonable and good faith judgment (based on its knowledge of, and inquiry with respect to,
comparable arrangements with or between unaffiliated parties), approved the following arrangements with EQH Affiliates as
being comparable to, or more favorable to AB than, those that would prevail in a transaction with an unaffiliated party.
2023 Annual Report
179
Part III
See Note 12 Debt to AB’s consolidated financial statements in Item 8 for disclosures related to our credit facility with EQH.
Significant transactions between AB and related persons during 2023 are as follows (the first table summarizes services we
provide to related persons and the second table summarizes services our related persons provide to us):
Parties(1(1))
Equitable Financial
EQAT and Equitable Premier
VIP Trust
Equitable Holdings
Parties(1)
Equitable Holdings
General Description of Relationship(2(2))
We provide investment management services and ancillary
accounting, valuation, reporting, treasury and other services to the
general and separate accounts of Equitable Financial and its
insurance company subsidiaries.
We serve as sub-adviser to these open-end mutual funds, each of
which is sponsored by a subsidiary of Equitable Holdings.
General Description of Relationship
Distributes certain of our Retail Products; provides Private Wealth
Management referrals; sells shares of our mutual funds under
Distribution Service and Educational Support agreements; includes
us as insured under various insurance policies.
Amounts Received or
Accrued for in 2023
(in thousands)
$
134,205
21,466
10,694
Amounts Paid or
Accrued for in 2023
(in thousands)
$
46,654
(1) AB or one of its subsidiaries is a party to each transaction.
(2) We provide investment management services unless otherwise indicated.
Arrangements with Immediate Family Members of Related Persons
During 2023, we did not have arrangements with immediate family members of our directors and executive officers.
Director Independence
See “Independence of Certain Directors” in Item 10.
Item 14. Principal Accounting Fees and Services
Fees for professional audit services rendered by PricewaterhouseCoopers LLP ("PwC") for the audit of AB’s and AB Holding’s
annual financial statements for 2023 and 2022, respectively, and fees for other services rendered by PwC are as follows:
Audit fees(1)
Audit-related fees(2)
Tax fees(3)
All other fees(4)
Total
2023
2022
(in thousands)
$
$
7,894
3,666
2,869
6
14,435
$
$
7,373
3,355
1,556
2,512
14,796
(1)
Includes $69,702 and $66,383 paid for audit services to AB Holding in 2023 and 2022, respectively.
(2) Audit-related fees consist principally of fees for audits of financial statements of certain employee benefit plans, internal control reviews
and accounting consultation.
(3) Tax fees consist of fees for tax consultation and tax compliance services.
(4) All other fees consist primarily of miscellaneous non-audit services in 2023 and due diligence tax and audit services in 2022.
The Audit Committee has a policy to pre-approve audit and non-audit service engagements with the independent registered
public accounting firm. The independent registered public accounting firm must provide annually a comprehensive and detailed
schedule of each proposed audit and non-audit service to be performed. The Audit Committee then affirmatively indicates its
approval of the listed engagements. Engagements that are not listed but that are of similar scope and size to those listed and
approved may be deemed to be approved, if the fee for such service is less than $100,000. In addition, the Audit Committee has
delegated to its chairman the ability to approve any permissible non-audit engagement where the fees are expected to be less
than $100,000.
180
AllianceBernstein
Part IV
Item 15. Exhibits, Financial Statement Schedules
(a) There is no document filed as part of this Form 10-K.
Financial Statement Schedule.
Attached to this Form 10-K is a schedule describing Valuation and Qualifying Account-Allowance for Doubtful Accounts for
the three years ended December 31, 2023, 2022 and 2021.
(b) Exhibits.
The following exhibits required to be filed by Item 601 of Regulation S-K are filed herewith or incorporated by reference herein,
as indicated:
Exhibit
3.01
3.02
3.03
3.04
3.05
3.06
3.07
3.08
4.01
10.01
10.02
10.03
10.04
10.05
10.06
Description
AllianceBernstein Corporation By-Laws with amendments through September 21, 2022 (incorporated by reference
to Ex. 3.01 to Form 10-K for the fiscal year ended December 31, 2022, as filed February 10, 2023).
Amended and Restated Certificate of Limited Partnership dated February 24, 2006 of AB Holding (incorporated by
reference to Ex. 99.06 to Form 8-K, as filed February 24, 2006).
Amendment No. 1 dated February 24, 2006 to Amended and Restated Agreement of Limited Partnership of AB
Holding (incorporated by reference to Ex. 3.1 to Form 10-Q for the fiscal quarter ended September 30, 2006, as
filed November 8, 2006).
Amended and Restated Agreement of Limited Partnership dated October 29, 1999 of AB Holding (incorporated by
reference to Ex. 3.2 to Form 10-K for the fiscal year ended December 31, 2003, as filed March 10, 2004).
Amended and Restated Certificate of Limited Partnership dated February 24, 2006 of AB (incorporated by
reference to Ex. 99.07 to Form 8-K, as filed February 24, 2006).
Amendment No. 1 dated February 24, 2006 to Amended and Restated Agreement of Limited Partnership of AB
(incorporated by reference to Ex. 3.2 to Form 10-Q for the fiscal quarter ended September 30, 2006, as filed
November 8, 2006).
Amended and Restated Agreement of Limited Partnership dated October 29, 1999 of AB (incorporated by
reference to Ex. 3.3 to Form 10-K for the fiscal year ended December 31, 2003, as filed March 10, 2004).
Certificate of Amendment to the Certificate of Incorporation of AllianceBernstein Corporation (incorporated by
reference to Ex. 99.08 to Form 8-K, as filed February 24, 2006).
Description of AB Holding Units and AB Units.
AllianceBernstein 2023 Incentive Compensation Award Program.*
AllianceBernstein 2023 Deferred Cash Compensation Program.*
Form of Award Agreement, dated as of December 31, 2023, under Incentive Compensation Award Program,
Deferred Cash Compensation Program and AB 2017 Long Term Incentive Plan.*
Form of Award Agreement under AB 2017 Long Term Incentive Plan relating to equity compensation awards to
Independent Directors.*
Summary of AB's Lease at 1345 Avenue of the Americas, New York, New York.
Summary of AB's Lease at 501 Commerce Street, Nashville, Tennessee.
2023 Annual Report
181
Part IV
Exhibit
10.07
10.08
10.09
10.10
10.11
10.12
10.13
10.14
10.15
10.16
10.17
10.18
10.19
10.20
10.21
10.22
10.23
10.24
10.25
Description
AB's Lease at 66 Hudson Boulevard, New York, New York.
First Amendment to AB's Lease at 66 Hudson Boulevard, New York, New York.
Guidelines for Transfer of AB Units.
Transaction Agreement, dated as of March 17, 2022, by and among CarVal Investors, AB Holding and AB
(incorporated by reference to Exhibit 10.1 to Form 10-Q for the quarter ended March 31, 2022, as filed
April 29, 2022).
Amendment to the Profit Sharing Plan for Employees of AllianceBernstein L.P., dated as of June 28, 2022
(incorporated by reference to Exhibit 10.09 to Form 10-K for the fiscal year ended December 31, 2022, as filed
February 10, 2023).*
Amendment No. 1 to the Restated Revolving Credit Agreement, originally dated October 13, 2021, amended
February 9, 2023.
AllianceBernstein Change in Control Plan for Executive Officers (incorporated by reference to Exhibit 99.01 to Form
8-K, as filed December 14, 2020).*
Amendment No. 2 to Seth Bernstein's Employment Agreement (incorporated by reference to Ex. 10.1 to Form 8-K,
as filed December 19, 2019).*
Credit Agreement dated as of November 4, 2019 between AllianceBernstein L.P., as borrower, and Equitable
Holdings, Inc., as lender (incorporated by reference to Ex. 10.01 to Form 8-K, as filed November 4, 2019).
Amendment to Seth Bernstein's Employment Agreement (incorporated by reference to Ex. 10.01 to Form 10-K for
the fiscal year ended December 31, 2018, as filed February 13, 2019).*
Jackie Marks' Letter Agreement dated December 20, 2023.
Bill Siemers Retirement Agreement dated January 9, 2024.
Amendment to the Retirement Plan for Employees of AllianceBernstein L.P., dated as of April 1, 2018 (incorporated
by reference to Ex. 10.11 to Form 10-K for the fiscal year ended December 31, 2018, as filed February 13, 2019).*
Amendment to the Profit Sharing Plan for Employees of AllianceBernstein L.P., dated as of April 1, 2018
(incorporated by reference to Ex. 10.12 to Form 10-K for the fiscal year ended December 31, 2018, as filed
February 13, 2019).*
AB 2017 Long Term Incentive Plan (incorporated by reference to Ex. 10.06 to Form 10-K for the fiscal year ended
December 31, 2017, as filed February 13, 2018).*
Employment Agreement among Seth Bernstein, AB, AB Holding and AllianceBernstein Corporation (incorporated
by reference to Ex. 10.3 to Form 8-K, as filed May 1, 2017).*
Amendment to the Profit Sharing Plan for Employees of AllianceBernstein L.P., dated as of October 20, 2016 and
effective as of January 1, 2017 (incorporated by reference to Ex. 10.06 to Form 10-K for the fiscal year ended
December 31, 2017, as filed February 13, 2018).*
Profit Sharing Plan for Employees of AB, as amended and restated as of January 1, 2015 and as further amended
as of January 1, 2017 (incorporated by reference to Ex. 10.05 to Form 10-K for the fiscal year ended December 31,
2015, as filed February 11, 2016).*
Amendment and Restatement of the Retirement Plan for Employees of AB, as of January 1, 2015 (incorporated by
reference to Ex. 10.06 to Form 10-K for the fiscal year ended December 31, 2015, as filed February 11, 2016).*
182
AllianceBernstein
Part IV
Exhibit
10.26
10.27
10.28
10.29
10.30
21.01
23.01
31.01
31.02
32.01
32.02
Description
Commercial Paper Dealer Agreement 4(a)(2) Program, dated as of June 1, 2015, between AllianceBernstein L.P.,
as Issuer, and Citigroup Global Markets Inc., as Dealer (incorporated by reference to Ex. 10.08 to Form 10-K for the
fiscal year ended December 31, 2015, as filed February 11, 2016).
Commercial Paper Dealer Agreement 4(a)(2) Program, dated as of November 1, 2023, between AllianceBernstein
L.P., as Issuer, and Barclays Capital Inc., as Dealer.
Commercial Paper Dealer Agreement 4(a)(2) Program, dated as of June 1, 2015, between AllianceBernstein L.P.,
as Issuer, and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as Dealer (incorporated by reference to Ex. 10.10
to Form 10-K for the fiscal year ended December 31, 2015, as filed February 11, 2016).
Investment Advisory and Management Agreement for the General Account of Equitable Financial Life Insurance
Company (incorporated by reference to Ex. 10.5 to Form 10-K for the fiscal year ended December 31, 2004, as filed
March 15, 2005).
Amended and Restated Investment Advisory and Management Agreement dated January 1, 1999 among AB
Holding, Alliance Corporate Finance Group Incorporated, and Equitable Financial Life Insurance Company
(incorporated by reference to Ex. (a)(6) to Form 10-Q/A for the fiscal quarter ended September 30, 1999, as filed
September 28, 2000).
Subsidiaries of AB.
Consents of PricewaterhouseCoopers LLP.
Certification of Seth Bernstein furnished pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Certification of Bill Siemers furnished pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Certification of Seth Bernstein furnished for the purpose of complying with Rule 13a-14(b) or Rule 15d-14(b) of the
Securities Exchange Act of 1934 and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-
Oxley Act of 2002.
Certification of Bill Siemers furnished for the purpose of complying with Rule 13a-14(b) or Rule 15d-14(b) of the
Securities Exchange Act of 1934 and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-
Oxley Act of 2002.
97.01
Policy Relating to Recovery of Erroneously Awarded Incentive-based Compensation.
101.INS
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL
tags are embedded within the Inline XBRL document.
101.SCH XBRL Taxonomy Extension Schema.
101.CAL XBRL Taxonomy Extension Calculation Linkbase.
101.LAB XBRL Taxonomy Extension Label Linkbase.
101.PRE XBRL Taxonomy Extension Presentation Linkbase.
101.DEF
XBRL Taxonomy Extension Definition Linkbase.
104
*
The cover page from the Company's Annual Report on Form 10-K for the year ended December 31, 2023, formatted
in Inline XBRL (included in Exhibit 101).
Denotes a compensatory plan or arrangement
Item 16. Form 10-K Summary
None.
2023 Annual Report
183
Signatures
Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
Date: February 9, 2024
AllianceBernstein Holding L.P.
By:
/s/ Seth Bernstein
Seth Bernstein
President & Chief Executive Offiff cer
Pursuant to the requirements of the Exchange Act, this report has been signed by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Date: February 9, 2024
Date: February 9, 2024
/s/ Bill Siemers
Bill Siemers
Interim Chief Financial Offiff cer
/s/ Thomas Simeone
Thomas Simeone
Controller & Chief Accounting Offiff cer
184
AllianceBernstein
Directors
/s/ Seth Bernstein
Seth Bernstein
President & Chief Executive Offiff cer
/s/ Jeffrey Hurd
Jeffrey Hurd
Director
/s/ Nick Lane
Nick Lane
Director
/s/ Mark Pearson
Mark Pearson
Director
/s/ Todd Walthall
Todd Walthall
Director
/s/ Joan Lamm-Tennant
Joan Lamm-Tennant
Chair of the Board
/s/ Daniel Kaye
Daniel Kaye
Director
/s/ Das Narayandas
Das Narayandas
Director
/s/ Charles Stonehill
Charles Stonehill
Director
2023 Annual Report
185
SCHEDULE II
AllianceBernstein L.P.
Valuation and Qualifying Account - Allowance for Doubtful Accounts
For the Three Years Ending December 31, 2023, 2022 and 2021
Description
For the year ended December 31, 2023
For the year ended December 31, 2022
For the year ended December 31, 2021
Balance at
Beginning
of Period
Credited to
Costs and
Expenses
Deductions
Balance at
End
of Period
(in thousands)
$
$
$
232
328
311
$
$
$
72
—
—
$
$
$
5 (a)
96 (b)
(17) (c)
$
$
$
299
232
328
(a)
(b)
(c)
Includes accounts written-off as uncollectible of $5.
Includes accounts written-off as uncollectible of $96.
Includes a net addition to the allowance balance of $28 and accounts written-off as uncollectible of $11.
186
AllianceBernstein
(cid:62)T(cid:43)(cid:44)(cid:54)(cid:3)(cid:51)(cid:36)(cid:42)(cid:40)(cid:3)(cid:44)(cid:49)(cid:55)(cid:40)(cid:49)(cid:55)(cid:44)(cid:50)(cid:49)(cid:36)(cid:47)(cid:47)(cid:60)(cid:3)(cid:47)(cid:40)(cid:41)(cid:55)(cid:3)(cid:37)(cid:47)(cid:36)(cid:49)(cid:46)(cid:64)
2023 Company Information
AllianceBernstein Holding L.P.
Unitholder Tax Assistance
New York Stock Exchange
Symbol: AB
Headquarters
501 Commerce Street
Nashville, TN 37203
(615) 622-0000
AllianceBernstein.com
Unitholder Account Assistance
Unitholders who own units in certificate
form should contact the transfer agent and
registrar listed below with any questions:
(regular mail)
Computershare
P.O. Box 505000
Louisville, KY 40233
(overnight)
Computershare
462 South 4th Street, Suite 1600
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and Exchange Commission, as well as this
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Carly Symington
629-213-5568
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Bernstein Private Wealth Management
Mutual Fund Shareholder Information
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Cautions Regarding Forward-Looking Statements
Certain statements provided by management in this report 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, integration of acquired companies,
competitive conditions and government regulations, including changes in tax regulations and rates and the manner in which the earnings of publicly-traded partnerships are taxed.
We caution readers to carefully consider such factors. Further, these forward-looking statements speak only as of the date on which such statements are made; we undertake 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” in Item 1A of the enclosed Form 10-K. Any or all of the forward-looking statements that we
make in Form 10-K, other documents we file with or furnish to the SEC, and any other public statements we issue, may turn out to be wrong. It is important to remember that other
factors besides those listed in “Risk Factors” and those listed below could also adversely impact our revenues, financial condition, results of operations and business prospects.
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