What changed in this filing

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Item 1. Business

2021-02-11 compared with 2020-02-12 · 242 added, 79 removed, 289 unchanged (53% of the section changed)

7 unchanged sentences

We use “ emerging markets ” in this Form 10-K to refer to countries included in the Morgan Stanley Capital International (“ MSCI ”) emerging markets index, which are, as of December 31, 2020:

Argentina, Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Korea, Malaysia, Mexico, Pakistan, Peru, Philippines, Poland, Qatar, Russia, Saudi Arabia, South Africa, Taiwan, Thailand, Turkey and the United Arab Emirates.

We provide research, diversified investment management and related services globally to a broad range of clients through our three buy-side distribution channels:

Argentina, Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Korea, Kuwait, Malaysia, Mexico, Pakistan, Peru, Philippines, Poland, Qatar, Russia, Saudi Arabia, South Africa, Taiwan, Thailand, Turkey and United Arab Emirates.

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, 2019 , 2018 and 2017 , our AUM were approximately $623 billion, $516 billion and $554 billion, respectively, and our net revenues as of December 31, 2019 , 2018 and 2017 were approximately $3.5 billion, $3.4 billion and $3.3 billion, respectively.

EQH (our parent company), AXA and their respective subsidiaries, whose AUM consist primarily of fixed income investments, constitute our largest clients.

As of December 31, 2020, 2019 and 2018, our AUM were approximately $686 billion, $623 billion and $516 billion, respectively, and our net revenues were approximately $3.7 billion, $3.5 billion and $3.4 billion, as of December 31, 2020, 2019 and 2018, respectively.

EQH (our parent company) and its subsidiaries, whose AUM consist primarily of fixed income investments, is our largest client.

Our EQH affiliates represented approximately 19%, 18% and 18% of our AUM as of December 31, 2020, 2019 and 2018, and we earned approximately 3% of our net revenues from services we provided to them in each of those years.

AXA and its subsidiaries represented approximately 5%, 6% and 6% of our AUM as of December 31, 2019 , 2018 and 2017 , and we earned approximately 2% of our net revenues from services we provided to them in each of those years.

Also, AXA and its subsidiaries represented approximately 3%, 5% and 6% of our AUM as of December 31, 2020, 2019 and 2018, and we earned approximately 2% of our net revenues from services we provided to them in each of those years.

See “Distribution Channels” below and “Assets Under Management” and “Net Revenues” in Item 7 for additional information regarding our AUM and net revenues.

3 unchanged sentences

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 and alternative investments.

We also have experts focused on multi-asset strategies, wealth management, environmental, social and governance (“ ESG ”) and alternative investments.

Corporate Responsibility

As a fiduciary, responsible investor and research firm, we believe that being a responsible company and investing responsibly are linked.

The views of governments, communities, consumers and other stakeholders continue to evolve on responsible behavior, and firms are rethinking their purpose beyond maximizing shareholder value.

Increasingly, investors are more closely scrutinizing companies, including investment managers (like us), to determine how committed they are to corporate responsibility.

At AB, we are working to become a better firm.

At AB, we constantly are working to become a better firm.

To us, this means giving back to the communities in which we work through our firm-wide philanthropic initiative, AB Gives Back, and reducing our environmental footprint by increasing our use of “green buildings,” such as our new headquarters in Nashville, Tennessee.

Additionally, by promoting diversity and inclusion, we are afforded different perspectives and ways of thinking, which can lead to better outcomes for our clients.

Also, striving to be more responsible gives us a richer perspective for evaluating other firms.

As longtime fundamental investors with a strong research heritage, we have integrated environmental, social and governance (“ ESG ”) considerations into various processes.

Additionally, by promoting diversity and inclusion, we are afforded different perspectives and ways of thinking, which can lead to better outcomes for our clients ( See Diversity and Inclusion below ).

Also, striving to be more responsible gives us a richer perspective for evaluating other companies.

As longtime fundamental investors with a strong research heritage, we have integrated ESG considerations into various processes.

This helps us make fully informed risk/return assessments and draw insightful investment conclusions.

have invested in technology and innovation to enable our investment teams to formalize their ESG evaluations and share insights from our engagements with other companies.

We provide additional information in this regard in our corporate responsibility report, which can be found under “Corporate Responsibility - Overview” on our Internet site.

Our investors — research analysts and portfolio managers — understand the companies and industries they cover in-depth.

This positions them well to determine which ESG issues are material to particular companies, to determine the financial impact of an ESG issue and to incorporate that insight into their cash-flow, earnings and credit models.

And, we continue to invest in technology and innovation to further enable our investment teams to formalize their ESG evaluations and share insights from our engagements with other companies.

COVID-19 has caused vast suffering and disruption to the global economy, while also causing significant volatility in the financial markets through much of 2020.

As a firm, AB has adapted rapidly to protect our employees' health and welfare, support our communities and ensure we can continue managing clients' investments safely and securely.

Furthermore, COVID-19 has become a prominent theme in engagement:

it not only impacts business models but also highlights corporate ESG practices.

We are advocating that issuers be responsible corporate citizens, and we are working to better understand opportunities and threats created by the pandemic.

We provide additional information in this regard in our corporate responsibility report, which is entitled "Advancing Responsible Investing" and can be found under “Corporate Responsibility - Overview” on www.alliancebernstein.com.

Investment Services

Our broad range of investment services includes:

We provide a broad range of investment services with expertise in:

• Actively-managed equity strategies, with global and regional portfolios across 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;

Passive management, including index and enhanced index strategies;

Alternative investments, including hedge funds, fund of funds, direct lending and private equity;

• Alternative investments, including hedge funds, fund of funds, direct lending, real estate and private equity;

• Multi-asset solutions and services, including dynamic asset allocation, customized target-date funds and target-risk funds;

Our services span various investment disciplines, including market capitalization ( e.g ., large-, mid- and small-cap equities), term ( e.g ., long-, intermediate- and short-duration debt securities), and geographic location ( e.g ., U.S., international, global, emerging markets, regional and local), in major markets around the world.

• Some passive management, including index and enhanced index strategies.

Our AUM by client domicile and investment service as of December 31, 2020, 2019 and 2018 were as follows:

14 unchanged sentences

(by Investment Service)

December 31, % Change

2020 2019 2018 2020-19 2019-18

(in millions)

Equity Actively Managed:

$ 17,435 $ 13,861 $ 9,629 25.8 % 44.0 %

Global & Non-US 42,632 30,767 23,335 38.6 31.8

Total 60,067 44,628 32,964 34.6 35.4

Equity Passively Managed (1) :

23,806 21,349 17,481 11.5 22.1

Global & Non-US 4,067 3,951 3,174 2.9 24.5

Total 27,873 25,300 20,655 10.2 22.5

Total Equity 87,940 69,928 53,619 25.8 30.4

Fixed Income Taxable:

115,488 107,436 96,913 7.5 10.9

Global & Non-US 48,560 50,281 51,156 (3.4) (1.7)

Total 164,048 157,717 148,069 4.0 6.5

Fixed Income Tax-Exempt:

1,271 1,209 1,046 5.1 15.6

Global & Non-US — — — — —

Total 1,271 1,209 1,046 5.1 15.6

Fixed Income Passively Managed (1) :

74 69 73 7.2 (5.5)

Global & Non-US 10 20 15 (50.0) 33.3

Total 84 89 88 (5.6) 1.1

Total Fixed Income 165,403 159,015 149,203 4.0 6.6

Alternatives/Multi-Asset Solutions (2) :

6,104 5,568 5,024 9.6 10.8

Global & Non-US 56,151 48,179 38,433 16.5 25.4

Total Alternatives/Multi-Asset Solutions 62,255 53,747 43,457 15.8 23.7

164,178 149,492 130,166 9.8 14.8

Global & Non-US 151,420 133,198 116,113 13.7 14.7

Total $ 315,598 $ 282,690 $ 246,279 11.6 14.8

Affiliated - EQH $ 91,396 $ 78,506 $ 64,447 16.4 21.8

AXA 16,448 27,136 25,948 (39.4) 4.6

Non-affiliated 207,754 177,048 155,884 17.3 13.6

Total $ 315,598 $ 282,690 $ 246,279 11.6 14.8

________________________________________________________________________________________________________________________

(1) Includes index and enhanced index services.

Includes certain multi-asset solutions and services and certain alternative investments.

(2) Includes certain multi-asset solutions and services not included in equity or fixed income services.

Revenues from Institutional Services

(by Investment Service)

Years Ended December 31,

Years Ended December 31, % Change

2020 2019 2018 2020-19 2019-18

(in thousands)

Equity Actively Managed:

$ 66,118 $ 62,252 $ 60,465 6.2 % 3.0 %

Global & Non-US 104,684 98,169 103,763 6.6 (5.4)

Total 170,802 160,421 164,228 6.5 (2.3)

Equity Passively Managed (1) :

3,677 3,846 3,713 (4.4) 3.6

Global & Non-US 2,174 1,992 1,880 9.1 6.0

Total 5,851 5,838 5,593 0.2 4.4

Total Equity 176,653 166,259 169,821 6.3 (2.1)

Fixed Income Taxable:

103,414 103,735 102,356 (0.3) 1.3

Global & Non-US 90,612 100,352 106,314 (9.7) (5.6)

Total 194,026 204,087 208,670 (4.9) (2.2)

Fixed Income Tax-Exempt:

1,355 1,309 1,217 3.5 7.6

Global & Non-US — — — — —

Total 1,355 1,309 1,217 3.5 7.6

Fixed Income Passively Managed (1) :

47 86 49 (45.3) 75.5

Global & Non-US 35 21 28 66.7 (25.0)

Total 82 107 77 (23.4) 39.0

Fixed Income Servicing (2) :

14,108 13,215 12,708 6.8 4.0

Global & Non-US — — — — —

Total 14,108 13,215 12,708 6.8 4.0

Total Fixed Income 209,571 218,718 222,672 (4.2) (1.8)

Alternatives/Multi-Asset Solutions (3) :

52,222 54,582 52,131 (4.3) 4.7

Global & Non-US 73,354 39,405 33,530 86.2 17.5

Total Alternatives/Multi-Asset Solutions 125,576 93,987 85,661 33.6 9.7

Total Investment Advisory and Services Fees:

240,941 239,025 232,639 0.8 2.7

Global & Non-US 270,859 239,939 245,515 12.9 (2.3)

Consolidated company-sponsored investment funds — — (372) — 100.0

Total 511,800 478,964 477,782 6.9 0.2

Distribution Revenues 588 704 757 (16.5) (7.0)

Shareholder Servicing Fees 526 476 529 10.5 (10.0)

Total $ 512,914 $ 480,144 $ 479,068 6.8 0.2

Affiliated - EQH (4)

$ 90,101 $ 82,413 $ 78,011 9.3 5.6

AXA 62,999 55,135 53,745 14.3 2.6

Non-affiliated (4)

359,814 342,596 347,312 5.0 (1.4)

Total $ 512,914 $ 480,144 $ 479,068 6.8 0.2

________________________________________________________________________________________________________________________

(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.

Includes certain multi-asset solutions and services and certain alternative services.

(3) Includes certain multi-asset solutions and services not included in equity or fixed income services.

(4) Amounts in 2019 and 2018 have been reclassified to conform to the current period's presentation.

We provide investment management and related services to a wide variety of individual retail investors, both in the U.S.

20 unchanged sentences

Fund shareholders must be given advance notice of any fee increases.

The mutual funds we sub-advise for EQH, AXA and their respective subsidiaries constitute our largest retail clients.

EQH and its subsidiaries accounted for approximately 14%, 16% and 16% of our retail AUM as of December 31, 2019 , 2018 and 2017 , respectively, and approximately 2% of our retail net revenues in each of those years.

AXA and its subsidiaries accounted for approximately 2%, 3% and 3% of our retail AUM as of December 31, 2019 , 2018 and 2017 , respectively, and approximately 1%, 2% and 2% of our retail net revenues for the years ended December 31, 2019 , 2018 and 2017 , respectively.

The mutual funds we sub-advise for EQH and its subsidiaries constitute our largest retail client.

EQH and its subsidiaries accounted for approximately 14%, 14% and 16% of our retail AUM as of December 31, 2020, 2019 and 2018, respectively, and approximately 1%, 2% and 2% of our retail net revenues for the years ended December 31, 2020, 2019 and 2018, respectively.

Also, AXA and its subsidiaries accounted for approximately 2%, 2% and 3% of our retail AUM as of December 31, 2020, 2019 and 2018, respectively, and approximately 1%, 1% and 2% of our retail net revenues for the years ended December 31, 2020, 2019 and 2018, respectively.

HSBC was responsible for approximately 6%, 14% and 7% of our open-end mutual fund sales in 2020, 2019 and 2018, respectively.

12 unchanged sentences

(by Investment Service)

December 31, % Change

2020 2019 2018 2020-19 2019-18

(in millions)

Equity Actively Managed:

$ 79,569 $ 57,125 $ 41,450 39.3 % 37.8 %

Global & Non-US 27,297 24,497 19,475 11.4 25.8

Total 106,866 81,622 60,925 30.9 34.0

Equity Passively Managed (1) :

28,937 27,153 22,658 6.6 19.8

Global & Non-US 7,058 7,530 6,697 (6.3) 12.4

Total 35,995 34,683 29,355 3.8 18.2

Total Equity 142,861 116,305 90,280 22.8 28.8

Fixed Income Taxable:

8,510 9,093 7,029 (6.4) 29.4

Global & Non-US 76,144 79,315 53,413 (4.0) 48.5

Total 84,654 88,408 60,442 (4.2) 46.3

Fixed Income Tax-Exempt:

23,167 20,706 16,403 11.9 26.2

Global & Non-US 35 44 42 (20.5) 4.8

Total 23,202 20,750 16,445 11.8 26.2

Fixed Income Passively Managed (1) :

4,460 5,031 4,965 (11.3) 1.3

Global & Non-US 3,771 3,794 3,964 (0.6) (4.3)

Total 8,231 8,825 8,929 (6.7) (1.2)

Total Fixed Income 116,087 117,983 85,816 (1.6) 37.5

Alternatives/Multi-Asset Solutions (2) :

3,071 2,470 2,476 24.3 (0.2)

Global & Non-US 3,321 2,408 2,197 37.9 9.6

Total Alternatives/Multi-Asset Solutions 6,392 4,878 4,673 31.0 4.4

147,714 121,578 94,981 21.5 28.0

Global & Non-US 117,626 117,588 85,788 — 37.1

Total $ 265,340 $ 239,166 $ 180,769 10.9 32.3

Affiliated - EQH $ 36,765 $ 34,448 $ 29,206 6.7 17.9

AXA 6,150 5,680 5,471 8.3 3.8

Non-affiliated 222,425 199,038 146,092 11.8 36.2

Total $ 265,340 $ 239,166 $ 180,769 10.9 32.3

________________________________________________________________________________________________________________________

(1) Includes index and enhanced index services.

Includes certain multi-asset solutions and services and certain alternative investments.

(2) Includes certain multi-asset solutions and services not included in equity or fixed income services.

Revenues from Retail Services

(by Investment Service)

Years Ended December 31,

Years Ended December 31, % Change

2020 2019 2018 2020-19 2019-18

(in thousands)

Equity Actively Managed:

$ 346,538 $ 283,461 $ 235,611 22.3 % 20.3 %

Global & Non-US 162,435 153,156 149,995 6.1 2.1

Total 508,973 436,617 385,606 16.6 13.2

Equity Passively Managed (1) :

9,004 9,179 8,901 (1.9) 3.1

Global & Non-US 5,343 6,994 7,861 (23.6) (11.0)

Total 14,347 16,173 16,762 (11.3) (3.5)

Total Equity 523,320 452,790 402,368 15.6 12.5

Fixed Income Taxable:

25,127 26,963 25,194 (6.8) 7.0

Global & Non-US 509,037 479,886 438,048 6.1 9.6

Total 534,164 506,849 463,242 5.4 9.4

Fixed Income Tax-Exempt:

70,661 65,375 58,824 8.1 11.1

Global & Non-US 73 99 132 (26.3) (25.0)

Total 70,734 65,474 58,956 8.0 11.1

Fixed Income Passively Managed (1) :

6,037 5,972 6,086 1.1 (1.9)

Global & Non-US 6,192 6,133 6,809 1.0 (9.9)

Total 12,229 12,105 12,895 1.0 (6.1)

Total Fixed Income 617,127 584,428 535,093 5.6 9.2

Alternatives/Multi-Asset Solutions (2) :

57,069 51,958 63,232 9.8 (17.8)

Global & Non-US 12,723 8,946 8,575 42.2 4.3

Total Alternatives/Multi-Asset Solutions 69,792 60,904 71,807 14.6 (15.2)

Total Investment Advisory and Services Fees:

514,436 442,908 397,848 16.1 11.3

Global & Non-US 695,803 655,214 611,420 6.2 7.2

Consolidated company-sponsored investment funds 733 883 1,047 (17.0) (15.7)

Total 1,210,972 1,099,005 1,010,315 10.2 8.8

Distribution Revenues 522,056 447,050 411,996 16.8 8.5

Shareholder Servicing Fees 78,920 73,777 72,134 7.0 2.3

Total $ 1,811,948 $ 1,619,832 $ 1,494,445 11.9 8.4

Affiliated - EQH $ 27,130 $ 27,737 $ 27,814 (2.2) (0.3)

AXA 23,762 23,293 24,946 2.0 (6.6)

Non-affiliated 1,761,056 1,568,802 1,441,685 12.3 8.8

Total $ 1,811,948 $ 1,619,832 $ 1,494,445 11.9 8.4

________________________________________________________________________________________________________________________

(1) Includes index and enhanced index services.

Includes certain multi-asset solutions and services and certain alternative investments.

(2) Includes certain multi-asset solutions and services not included in equity or fixed income services.

Private Wealth Management

7 unchanged sentences

(by Investment Service)

December 31, % Change

2020 2019 2018 2020-19 2019-18

(in millions)

Equity Actively Managed:

$ 28,135 $ 26,840 $ 22,504 4.8 % 19.3 %

Global & Non-US 22,719 24,094 19,809 (5.7) 21.6

Total 50,854 50,934 42,313 (0.2) 20.4

Equity Passively Managed (1) :

641 142 113 n/m 25.7

Global & Non-US 25 32 42 (21.9) (23.8)

Total 666 174 155 n/m 12.3

Total Equity 51,520 51,108 42,468 0.8 20.3

Fixed Income Taxable:

9,293 7,583 7,022 22.6 8.0

Global & Non-US 5,222 4,587 4,154 13.8 10.4

Total 14,515 12,170 11,176 19.3 8.9

Fixed Income Tax-Exempt:

25,749 25,102 24,129 2.6 4.0

Global & Non-US 15 15 15 — —

Total 25,764 25,117 24,144 2.6 4.0

Fixed Income Passively Managed (1) :

— — 11 — (100.0)

Global & Non-US 195 372 404 (47.6) (7.9)

Total 195 372 415 (47.6) (10.4)

Total Fixed Income 40,474 37,659 35,735 7.5 5.4

Alternatives/Multi-Asset Solutions (2) :

5,927 6,808 5,762 (12.9) 18.2

Global & Non-US 7,064 5,484 5,340 28.8 2.7

Total Alternatives/Multi-Asset Solutions 12,991 12,292 11,102 5.7 10.7

69,745 66,475 59,541 4.9 11.6

Global & Non-US 35,240 34,584 29,764 1.9 16.2

Total $ 104,985 $ 101,059 $ 89,305 3.9 13.2

________________________________________________________________________________________________________________________

(1) Includes index and enhanced index services.

Includes certain multi-asset solutions and services and certain alternative investments.

(2) Includes certain multi-asset solutions and services not included in equity or fixed income services.

Revenues from Private Wealth Services

(by Investment Service)

Years Ended December 31,

Years Ended December 31, % Change

2020 2019 2018 2020-19 2019-18

(in thousands)

Equity Actively Managed:

$ 262,885 $ 267,671 $ 274,320 (1.8) % (2.4) %

Global & Non-US (3)

225,014 243,240 240,332 (7.5) 1.2

Total 487,899 510,911 514,652 (4.5) (0.7)

Equity Passively Managed (1) :

1,053 144 117 n/m 23.1

Global & Non-US 60 190 254 (68.4) (25.2)

Total 1,113 334 371 n/m (10.0)

Total Equity 489,012 511,245 515,023 (4.3) (0.7)

Fixed Income Taxable:

36,789 34,546 33,034 6.5 4.6

Global & Non-US 34,786 29,418 28,358 18.2 3.7

Total 71,575 63,964 61,392 11.9 4.2

Fixed Income Tax-Exempt:

123,871 122,350 118,811 1.2 3.0

Global & Non-US 81 97 109 (16.5) (11.0)

Total 123,952 122,447 118,920 1.2 3.0

Fixed Income Passively Managed (1) :

6 13 156 (53.8) (91.7)

Global & Non-US (3)

2,885 4,462 5,312 (35.3) (16.0)

Total 2,891 4,475 5,468 (35.4) (18.2)

Total Fixed Income 198,418 190,886 185,780 3.9 2.7

Alternatives/Multi-Asset Solutions (2) :

109,169 123,216 122,686 (11.4) 0.4

Global & Non-US (3)

76,065 68,728 51,839 10.7 32.6

Total Alternatives/Multi-Asset Solutions 185,234 191,944 174,525 (3.5) 10.0

Total Investment Advisory and Services Fees:

533,773 547,940 549,124 (2.6) (0.2)

Global & Non-US 338,891 346,135 326,204 (2.1) 6.1

Consolidated company-sponsored investment funds — — (1,214) — 100.0

Total 872,664 894,075 874,114 (2.4) 2.3

Distribution Revenues 7,137 7,289 5,809 (2.1) 25.5

Shareholder Servicing Fees 2,871 3,141 3,311 (8.6) (5.1)

Total $ 882,672 $ 904,505 $ 883,234 (2.4) 2.4

________________________________________________________________________________________________________________________

(1) Includes index and enhanced index services.

(2) Includes certain multi-asset solutions and services and certain alternative investments.

(2) Includes certain multi-asset solutions and services not included in equity or fixed income services.

(3) Amounts in 2019 have been reclassified to conform to the current period's presentation.

Bernstein Research Services

7 unchanged sentences

Revenues from Bernstein Research Services

Years Ended December 31,

Years Ended December 31, % Change

2020 2019 2018 2020-19 2019-18

(in thousands)

1 unchanged sentence

based broker-dealer subsidiary acts as custodian for the majority of our Private Wealth Management AUM and some of our Institutional AUM.

Other custodial arrangements are maintained by client-designated banks, trust companies, brokerage firms or custodians.

Other custodian arrangements, directed by clients, include banks, trust companies, brokerage firms and other financial institutions.

Human Capital 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 of our employees is collectively the most important asset of our firm, so the long-term sustainability of our firm is heavily dependent on our people.

We are constantly focused on:

• fostering an inclusive culture by incorporating diversity and inclusion in all levels of our business;

• encouraging innovation;

• developing, retaining and recruiting high quality talent;

• 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 help our clients reach their financial goals.

Also, our Board of Directors and committees of the Board, particularly our Compensation and Workplace Practices Committee, provide oversight into various human capital matters, including emerging human capital management risks and strategies to mitigate our exposure to those risks.

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.

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.

Talent Acquisition

AB seeks to achieve excellence in business and investment performance by recruiting and hiring a workforce with diversity of thought, backgrounds and experiences.

We believe that diverse and inclusive teams generate better ideas and reach more

balanced decisions.

We seek to leverage the unique backgrounds of our employees to meet the needs of a broad range of clients and engage with the communities in which we operate.

We engage several external organizations to assist in attracting and recruiting top talent at all levels, with a particular focus on attracting diverse talent.

We have a sizable group of internal human capital associates focused on recruiting, and we have implemented various human capital initiatives to develop and provide for a balanced workforce.

Additionally, we offer internship programs for students to work in positions across functional areas of the firm;

an important part of our college recruitment strategy is to convert a high percentage of our interns into full-time employees.

Employee Engagement

We believe a workforce is most productive, effective and highly engaged when they feel connected to our business and culture.

We seek to provide diverse work experiences, professional development opportunities, competitive compensation and benefits, an inclusive and diverse culture and social engagement projects to keep our employees motivated, connected to our firm and engaged throughout their careers.

We strive to create a culture of intellectual curiosity and collaboration, creating an environment where our employees can thrive and do their best work.

We foster growth and advancement through different training avenues to develop skill sets, create opportunities for networking, both internally and externally, and we encourage internal mobility as a part of our employees' career trajectory.

It is important that our employees are not only connected to our business but also to the communities in which we operate.

As such, AB offers many opportunities for our employees to volunteer in the communities in which we serve including our firm-wide philanthropic initiative, AB Gives Back.

Other initiatives in support of these objectives include a five-year refresh award for employees that mark a five-year anniversary are eligible to receive two additional weeks off.

In addition, we utilize AB Voice, a periodic survey designed to measure employee satisfaction and engagement, allowing us to identify and address performance gaps.

Diversity and Inclusion

As noted previously, we believe that diverse and inclusive teams generate better ideas and best serve the needs of our clients.

As such, we strive to cultivate a dynamic, diverse and inclusive workplace where employees feel challenged and valued for their contributions.

We offer leadership development programs that cater to the needs of various groups, including an African American Leadership program, an Asian Leadership program, a Women's leadership program and a variety of Employee Resource Groups (" ERGs ").

These ERG programs, which are central to our diversity and inclusion efforts, share a common purpose, interest and backgrounds and accelerate the advancement of our employees from traditionally underrepresented groups.

Our ERG groups are spread across seven categories, including AB Asians, Black ERG, Family Matters, AB Veterans, AB Out (LGBTQ), Synergy (Women) and Adelante (Latinx).

These groups serve as a source of inclusion, and they help to support our acquisition of diverse talent.

Our senior leadership is committed to our diversity and inclusion efforts and is active in a variety of coalitions pledging to advance diversity and inclusion.

Additionally, the Firm has implemented several measures to help ensure accountability for contributing to our diversity and inclusion initiatives.

For i nstance, our senior business leaders have diversity and inclusion objectives embedded in their annual performance goals.

Compensation and Benefits

We have demonstrated a history of investing in our workforce by offering competitive compensation.

We utilize a variety of compensation elements, including base salaries, annual short-term compensation awards (i.e., cash bonuses) and, for those of our employees who earn more than $200,000 annually, a long-term compensation award program.

Long-term incentive compensation awards generally are denominated in restricted AB Holding Units.

We utilize this structure to foster a stronger sense of ownership and align the interests of our employees 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 assets under management and improved financial performance for the firm.

Furthermore, we offer health and welfare, 401(k) profit-sharing and other benefits programs to all eligible employees.

(and elsewhere, although benefits may differ by jurisdiction):

• We provide employee wages that are competitive and consistent with employee positions, skill levels, experience, knowledge and geographic location;

• We engage nationally recognized outside compensation and benefits consulting firms to independently evaluate the effectiveness of our executive compensation and benefit programs, as well as consulting services relating to the amount and form of compensation paid to employees other than executives, and to provide benchmarking against our peers;

• We provide merit-based and performance-based annual increases and incentive compensation, which are communicated to employees at the time of hiring and documented through our talent management process as part of our annual review procedures and upon internal transfer and/or promotion;

• 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 that allow

employees to select the options that meet their needs, including flexible time-off, telemedicine, paid parental leave, adoption assistance, prescription savings solutions, Veterans' Health Administration coverage in U.S.

medical plans, a personalized wellness program and a financial wellness program.

Health and Safety

The health and safety of our employees is our highest priority and is evident in our response to the COVID-19 pandemic around the globe.

At the initial onset of COVID-19 during the first quarter of 2020, we quickly responded in the various jurisdictions where we operate, including the U.S., EMEA (including the U.K., Luxembourg, France and other jurisdictions), Hong Kong, Shanghai, Singapore and Taiwan.

We implemented business continuity measures, including travel restrictions and a work-from-home requirement for almost all personnel (other than a relatively small number of employees whose physical presence in our offices was considered critical), which has remained in place (except in our Asia offices, most of which have reopened), to ensure operating continuity for all critical functions.

We also instituted a confidential notification process for any employee who tests positive for COVID-19 or has been exposed to someone else who has tested positive.

As the COVID-19 crisis has continued to evolve since the lockdown in the first quarter, certain key functions of the business, such as Risk Management, Business Continuity, Finance and Human Capital, have maintained constant communication and monitored the evolution of the pandemic to keep our employees safe and advised of key developments.

Additionally, we continue to monitor communications from the World Health Organization and the U.S.

Centers for Disease Control and Prevention to ensure we have current information.

We have also instituted various other protocols in response to the COVID-19 pandemic, such as increased cleaning protocols, modifying workspaces to allow for social distancing and requiring masks to be worn in all office locations when social distancing cannot be maintained.

As of December 31, 2020, our firm had 3,929 full-time employees, representing a 3.1% increase compared to the end of 2019.

New York state law requires that private sector businesses with 50 or more full-time employees in the state give early warning of plant closings, layoffs, relocations and other covered reductions in work hours.

This notification, known as the Worker Adjustment and Retraining Notification ( “WARN” ) notice, must be provided to affected employees and their representatives, the New York State Department of Labor and the Local Workforce Investment Board, for relocations that affect 25 or more employees.

In connection with our establishing 1,250 roles in Nashville, Tennessee (most of which are being relocated from our White Plains and New York City locations), we are required to file a series of WARN notices throughout the process, which began in the second half of 2018.

We will continue to file these notices as qualifying events occur.

As of December 31, 2020, our employees reflected the following by gender and region:

Female % Female Male % Male Grand Total % of Total

Americas 1,084 37 % 1,871 63 % 2,955 75 %

Asia ex Japan 210 52 % 197 48 % 407 10 %

EMEA 175 36 % 307 64 % 482 12 %

Japan 41 48 % 44 52 % 85 2 %

Grand Total 1,510 38 % 2,419 62 % 3,929 100 %

In connection with our establishing 1,250 roles in Nashville, Tennessee, we have relocated many of our employees from our New York City and White Plains, New York, locations.

Employees whose roles are in-scope for the move, but who are not relocating, will receive a separation package.

We expect layoffs to continue on a rolling basis until all in-scope roles are filled in Nashville.

Information about our Executive Officers

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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 and “Ahead of Tomorrow” are service marks of AB:

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 and “Ahead of Tomorrow” service marks 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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service marks, including the logo “WPSTEWART.”

Service marks are generally valid and may be renewed indefinitely, as long as they are in use and/or their registrations are properly maintained.

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.

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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 four of our subsidiaries (Sanford C.

Bernstein & Co., LLC (“ SCB LLC ”), AB Custom Alternative Solutions LLC, AB Private Credit Investors LLC and W.P.

AB, AB Holding, the General Partner and five 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 and W.P.

Stewart Asset Management LLC) are registered with the SEC as investment advisers under the Investment Advisers Act.

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For additional information relating to the regulations that impact our business, please refer to "Risk Factors" in Item 1A .

Iran Threat Reduction and Syria Human Rights Act

AB, AB Holding and their global subsidiaries had no transactions or activities requiring disclosure under the Iran Threat Reduction and Syria Human Rights Act, nor were they involved in the AXA Group matters described immediately below.

We have provided the information below as AXA and its subsidiaries remained our affiliates through early December 2019.

based subsidiaries of AXA operate in compliance with applicable laws and regulations of the various jurisdictions in which they operate, including applicable international (United Nations and European Union) laws and regulations.

While AXA Group companies based and operating outside the United States generally are not subject to U.S.

law, as an international group, AXA has in place policies and standards (including the AXA Group International Sanctions Policy) that apply to all AXA Group companies worldwide and often impose requirements that go well beyond local law.

AXA has informed us that AXA Konzern AG, an AXA insurance subsidiary organized under the laws of Germany, provides accident and health insurance to diplomats based at the Iranian Embassy in Berlin, Germany.

The total annual premium of these policies is approximately $109,150 and the annual net profit arising from these policies, which is difficult to calculate with precision, is estimated to be $18,385.

AXA also has informed us that AXA Belgium, an AXA insurance subsidiary organized under the laws of Belgium, has two policies providing for car insurance for Global Trading NV, which was designated on May 17, 2018 under (E.O.) 13224 and subsequently changed its name to Energy Engineers & Construction on August 20, 2018.

The total annual premium of these policies is approximately $6,559 before tax and the annual net profit arising from these policies, which is difficult to calculate with precision, is estimated to be $983.

These policies were cancelled during 2019.

In addition, AXA has informed us that AXA Insurance Ireland, an AXA insurance subsidiary, provides statutorily required car insurance under four separate policies to the Iranian Embassy in Dublin, Ireland.

AXA has informed us that compliance with the Declined Cases Agreement of the Irish Government prohibits the cancellation of these policies unless another insurer is willing to assume the coverage.

The total annual premium for these policies is approximately $7,115 and the annual net profit arising from these policies, which is difficult to calculate with precision, is estimated to be $853.

Also, AXA has informed us that AXA Sigorta, a subsidiary of AXA organized under the laws of the Republic of Turkey, provides car insurance coverage for vehicle pools and compulsory earthquake coverage of the Iranian General Consulate and the Iranian Embassy in Istanbul, Turkey.

Motor liability insurance coverage is compulsory in Turkey and cannot be canceled unilaterally.

The total annual premium in respect of these policies is approximately $3,150 and the annual net profit, which is difficult to calculate with precision, is estimated to be $473.

Additionally, AXA has informed us that AXA Winterthur, an AXA insurance subsidiary organized under the laws of Switzerland, provides Naftiran Intertrade, a wholly-owned subsidiary of the Iranian state-owned National Iranian Oil Company, with life, disability and accident coverage for its employees.

In addition, AXA Winterthur also provides car and property insurance coverage for the Iranian Embassy in Bern.

The provision of these forms of coverage is mandatory in Switzerland.

The total annual premium of these policies is approximately $396,597 and the annual net profit arising from these policies, which is difficult to calculate with precision, is estimated to be $59,489.

Also, AXA has informed us that AXA Egypt, an AXA insurance subsidiary organized under the laws of Egypt, provides the Iranian state-owned Iran Development Bank, two life insurance contracts, covering individuals who have loans with the bank.

The total annual premium of these policies is approximately $20,650 and annual net profit arising from these policies, which is difficult to calculate with precision, is estimated to be $2,000.

In addition, AXA has informed us that AXA Hong Kong, an AXA insurance subsidiary organized under the laws of Hong Kong, provided the Iranian state-owned Hong Kong Branch of Melli Bank PLC, which was re-designated on November 5, 2018 pursuant to E.O.

13224, with group health insurance for its employees.

This business has now been canceled.

The total annual premium of these policies is approximately $27,122 and the annual net profit arising from these policies, which is difficult to calculate with precision, is estimated to be $4,339.

Lastly, AXA has informed us that AXA XL, which AXA acquired during the third quarter of 2018, through various non-U.S.

subsidiaries, provides insurance to marine policyholders located outside of the U.S.

or reinsurance coverage to non-U.S.

insurers of marine risks as well as mutual associations of ship owners that provide their members with protection and liability coverage.

The provision of these coverages may involve entities or activities related to Iran, including transporting crude oil, petrochemicals and refined petroleum products.

AXA XL’s non-U.S.

subsidiaries insure or reinsure multiple voyages and fleets containing multiple ships, so they are unable to attribute gross revenues and net profits from such marine policies to activities with Iran.

As the activities of these insureds and re-insureds are permitted under applicable laws and regulations, AXA XL intends for its non-U.S.

subsidiaries to continue providing such coverage to its insureds and re-insureds to the extent permitted by applicable law.

The aggregate annual premium for the above-referenced insurance policies is approximately $570,343, representing approximately 0.0006% of AXA’s 2019 consolidated revenues, which are expected to exceed $100 billion.

The related net profit, which is difficult to calculate with precision, is estimated to be $86,522, representing approximately 0.002% of AXA’s estimated 2019 aggregate net profit.

History and Structure

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business