
AB			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.

AB Holding			AllianceBernstein Holding L.P. (Delaware limited partnership).

AB Holding Partnership Agreement			the Amended and Restated Agreement of Limited Partnership of AB Holding, dated as of October 29, 1999 and as amended February 24, 2006.

AB Holding Units			units representing assignments of beneficial ownership of limited partnership interest in AB Holding.

AB Partnership Agreement			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.

AXA			AXA S.A. (société anonyme organized under the laws of France) is the holding company for the AXA Group, a worldwide leader in financial protection.

Bernstein Transaction			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 America			Equitable Financial Insurance Company of America (f/k/a MONY Life Insurance Company of America, an Arizona corporation), a subsidiary of Equitable Holdings.

“AB~~” – 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.~~


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			the Employee Retirement Income Security Act of 1974, as amended.

GAAP			U.S. Generally Accepted Accounting Principles.

General Partner			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” – AllianceBernstein Holding L.P. (Delaware limited partnership).~~

“~~AB Holding Partnership Agreement” – the Amended and Restated Agreement of Limited Partnership of AB Holding, dated as of October 29, 1999 and as amended February 24, 2006.~~

“~~AB Holding Units” – units representing assignments of beneficial ownership of limited partnership interests in AB Holding.~~

“~~AB Partnership Agreement” – 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.~~

“~~AXA” – AXA (société anonyme~~ ~~organized under the laws of France) is the holding company for the AXA Group, a worldwide leader in financial protection.~~

“~~Bernstein Transaction~~” – 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 America” – Equitable Financial Insurance Company of America (f/k/a MONY Life Insurance Company of America, an Arizona corporation) and a subsidiary of Equitable Holdings.~~

“~~Equitable Financial” – Equitable Financial Life Insurance Company (New York stock life insurance company), a subsidiary of Equitable Holdings, and its subsidiaries other than AB and its subsidiaries.~~

“~~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” – the Employee Retirement Income Security Act of 1974, as amended.~~

"~~GAAP" – U.S. Generally Accepted Accounting Principles.~~

“~~General Partner” – 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.~~


ii			AllianceBernstein

Table of Contents

~~PART~~


Part I

Item 1.Business

The words “we” and “our” in this Form 10-K refer collectively to AB Holding and AB and its subsidiaries, or to their officers and employees. Similarly, the words “company” and “firm” refer to both AB Holding and AB. Where the context requires distinguishing between AB Holding and AB, we identify which company is being discussed. Cross-references are in italics.

We use “global” in this Form 10-K to refer to all nations, including the United States; we use “international” or “non-U.S.” to refer to nations other than the United States.

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,~~2021: 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.

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, 2021, 2020 ~~2019~~ and ~~2018,~~2019, our AUM were approximately $779 billion, $686 billion ~~$623 billion~~ and ~~$516~~$623 billion, respectively, and our net revenues were approximately $4.4 billion, $3.7 billion and $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%~~17%, ~~18%~~19% and 18% of our AUM as of December 31, 2021, 2020 ~~2019~~ and ~~2018,~~2019, and we earned approximately 3% 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.


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.


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~~Research~~Part I

Research

Our high-quality, in-depth research is the foundation of our business. 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.

Corporate Responsibility

At AB, we ~~constantly~~pursue insight that unlocks opportunity. This is our firm's purpose. Together with our firm's mission and values, which we have described below, our purpose forms the foundation of responsibility at AB.

AB's mission is to help our clients define and achieve their investment goals, explicitly stating what we do each day to unlock opportunity for our clients. As an active manager, our differentiated insights drive our ability to deliver alpha and design innovative investment solutions. ESG and climate issues are ~~working~~key elements in forming insights and in presenting potential risks and opportunities that can impact the performance of the companies and issuers in which we invest and the portfolios we build.

Our values provide a framework for the behaviors and actions that deliver on our purpose and mission. Values align our actions. Each value emerges from our firm's character, yet also is aspirational, and each value challenges us to become a better, ~~firm. To~~more responsible version of AB:

•We invest in each other, meaning that we have a strong organizational culture in which diversity is celebrated and mentorship is critical to our success.

•We strive for distinctive insight, meaning that we collaboratively identify creative solutions to clients' economic, ESG and climate-related 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 and issuers.

•We act with integrity, which is the bedrock of our relationships and drives us ~~this~~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 consistently challenge ourselves to become a better version of AB. This means, in part, 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 corporate 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 (See Diversity and Inclusion below in this Item 1).

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~~consider ESG ~~considerations into~~factors in various processes. This helps us make fully informed risk/return assessments and draw insightful investment conclusions. 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.

~~Table of Contents~~

~~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,~~Additionally, AB has ~~adapted rapidly to protect~~prioritized our employees' health and welfare ~~support~~throughout the COVID-19 pandemic while ensuring that our ~~communities~~firm has continued to meet our fiduciary obligations and ~~ensure we can continue managing clients' investments safely~~provide exceptional client service and ~~securely.~~thoughtful investment advice. Furthermore, COVID-19 ~~has become~~is 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~~including supply chain disruptions and inflationary pressures, fueled 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~~“Responsibility - Overview” on www.alliancebernstein.com.


2			AllianceBernstein

Table of Contents

Part I

Investment Services

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

Our AUM by client domicile and investment service as of December 31, 2021, 2020 ~~2019~~ and ~~2018~~2019 were as follows:

~~By Client Domicile ($ in billions):~~


AUM by Client Domicile ($ in billions)			AUM by Investment Service ($ in billions)


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Part I

~~By Investment Service ($ in billions):~~

~~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 affiliates such as 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 29%, 28% and 26% of our institutional AUM as of December 31, 2020, 2019 and 2018, respectively, and approximately 18%, 17% and 16% of our institutional revenues for 2020, 2019 and 2018, respectively. Also, AXA and its subsidiaries combined AUM accounted for approximately 5%, 10% and 11% of our institutional AUM as of December 31, 2020, 2019 and 2018, respectively, and approximately 12%, 11% and 11% of our institutional revenues for 2020, 2019 and 2018, respectively. No single institutional client other than EQH, AXA and their respective subsidiaries accounted for more than approximately 1% of our net revenues for the year ended December 31, 2020.

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%, 29% and 28% of our institutional AUM as of December 31, 2021, 2020 and 2019, respectively, and approximately 18%, 18% and 17% of our institutional revenues for 2021, 2020 and 2019, respectively. No single institutional client other than EQH and its respective subsidiaries accounted for more than approximately 2% of our net revenues for the year ended December 31, 2021.

As of December 31, 2021, EQH and its subsidiaries combined AUM accounted for:

Approximately

25%

of our institutional AUM.

Approximately

18%

of our institutional revenues.


EQH and Subsidiaries as a % of our Institutional AUM			EQH and Subsidiaries as a % of our Institutional Revenues


4			AllianceBernstein

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Part I

As of December 31, 2021, 2020 ~~2019~~ and ~~2018,~~2019, Institutional Services represented approximately ~~46%~~43%, ~~45%~~46% and ~~48%~~45%, respectively, of our AUM, and the fees we earned from providing these services represented approximately 13%, 14% and 14%, 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)

~~Institutional Services Assets Under Management~~


		Years Ended December 31								% Change
	2021			2020			2019			2021-20		2020-19
		(in millions)
Equity:
Equity Actively Managed		$	73,726		$	60,067		$	44,628	22.7	%	34.6	%
Equity Passively Managed(1)		28,995			27,873			25,300		4.0		10.2
Total Equity		102,721			87,940			69,928		16.8		25.8
U.S.		47,409			41,241			35,210		15.0		17.1
Global & Non-US		55,312			46,699			34,718		18.4		34.5
Total Equity		102,721			87,940			69,928		16.8		25.8
Fixed Income:
Fixed Income Taxable		155,940			164,048			157,717		(4.9)		4.0
Fixed Income Tax-Exempt		1,108			1,271			1,209		(12.8)		5.1
Fixed Income Passively Managed(1)		224			84			89		166.7		(5.6)
Total Fixed Income		157,272			165,403			159,015		(4.9)		4.0
U.S.		110,312			116,833			108,714		(5.6)		7.5
Global & Non-US		46,960			48,570			50,301		26.1		9.6
Total Fixed Income		157,272			165,403			159,015		(4.9)		4.0
Alternatives/Multi-Asset Solutions(2):
U.S.		7,697			6,104			5,568		26.1		9.6
Global & Non-US		69,390			56,151			48,179		23.6		16.5
Total Alternatives/Multi-Asset Solutions		77,087			62,255			53,747		23.8		15.8
Total:
U.S.		165,418			164,178			149,492		0.8		9.8
Global & Non-US		171,662			151,420			133,198		13.4		13.7
Total		$	337,080		$	315,598		$	282,690	6.8		11.6
Affiliated - EQH		84,096			91,396			78,506		(8.0)		16.4

Non-affiliated(3)		252,984			224,202			204,184		12.8		9.8
Total		$	337,080		$	315,598		$	282,690	6.8		11.6

~~(by Investment Service)~~

December 31, % Change
2020 2019 2018 2020-19 2019-18
(in millions)
Equity Actively Managed:
U.S. $ 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):
U.S. 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:
U.S. 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:
U.S. 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):
U.S. 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):
U.S. 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
Total:
U.S. 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.

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

(3)As of 12/31/2021, AXA is no longer considered an affiliated party, as such, AXA-related AUM has been reclassified to non-affiliated in 2020 and 2019.


2021 Annual Report			5

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Part I

Revenues from Institutional Services

(by Investment Service)

Years Ended December 31, % Change
2020 2019 2018 2020-19 2019-18
(in thousands)
Equity Actively Managed:
U.S. $ 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):
U.S. 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:
U.S. 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:
U.S. 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):
U.S. 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):
U.S. 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):
U.S. 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:
U.S. 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.

~~(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.~~

~~Table of Contents~~

~~Retail~~


		Years Ended December 31								% Change
	2021			2020			2019			2021-20		2020-19
		(in thousands)
Equity:
Equity Actively Managed		$	240,049		$	170,802		$	160,421	40.5	%	6.5	%
Equity Passively Managed(1)		6,119			5,851			5,838		4.6		0.2
Total Equity		246,168			176,653			166,259		39.4		6.3
U.S.		97,522			69,795			66,098		39.7		5.6
Global & Non-US		148,646			106,858			100,161		39.1		6.7
Total Equity		246,168			176,653			166,259		39.4		6.3
Fixed Income:
Fixed Income Taxable		199,866			194,026			204,087		3.0		(4.9)
Fixed Income Tax-Exempt		1,356			1,355			1,309		0.1		3.5
Fixed Income Passively Managed(1)		105			82			107		28.0		(23.4)
Fixed Income Servicing(2)		14,738			14,108			13,215		4.5		6.8
Total Fixed Income		216,065			209,571			218,718		3.1		(4.2)
U.S.		124,004			118,924			118,345		4.3		0.5
Global & Non-US		92,061			90,647			100,373		1.6		(9.7)
Total Fixed Income		216,065			209,571			218,718		3.1		(4.2)
Alternatives/Multi-Asset Solutions(3):
U.S.		64,646			52,222			54,582		23.8		(4.3)
Global & Non-US		59,179			73,354			39,405		(19.3)		86.2
Total Alternatives/Multi-Asset Solutions		123,825			125,576			93,987		(1.4)		33.6
Total Investment Advisory and Services Fees:
U.S.		286,172			240,941			239,025		18.8		0.8
Global & Non-US		299,886			270,859			239,939		10.7		12.9

Total		586,058			511,800			478,964		14.5		6.9
Distribution Revenues		474			588			704		(19.4)		(16.5)
Shareholder Servicing Fees		485			526			476		(7.8)		10.5
Total		$	587,017		$	512,914		$	480,144	14.4		6.8
Affiliated - EQH		105,415			90,101			82,413		17.0		9.3

Non-affiliated(4)		481,602			422,813			397,731		13.9		6.3
Total		$	587,017		$	512,914		$	480,144	14.4		6.8

(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.

(4)As of 12/31/2021, AXA is no longer considered an affiliated party, as such, AXA-related AUM has been reclassified to non-affiliated in 2020 and 2019.

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

We distribute our Retail Products and Services through financial intermediaries, including broker-dealers, 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%, 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. HSBC is not under any obligation to sell a specific amount of AB Fund shares and is not our affiliate.

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 (“~~Rule 12b-1 Fees~~”). 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, 2020, retail U.S. Fund AUM were approximately $62 billion, or 23% of retail AUM, as compared to $55 billion, or 23%, as of December 31, 2019, and $43 billion, or 24%, as of December 31, 2018. Non-U.S. Fund AUM, as of December 31, 2020, totaled $110 billion, or 41% of retail AUM, as compared to $103 billion, or 43%, as of December 31, 2019, and $71 billion, or 39%, as of December 31, 2018.

~~Table of Contents~~

~~Our Retail Services represented approximately 39%~~


6			AllianceBernstein

Table of Contents

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”).

We distribute our Retail Products and Services through financial intermediaries, including broker-dealers, 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.

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, 2021, 2020 and 2019 and approximately 1%, 1% and 2% of our retail net revenues for the years ended December 31, 2021, 2020 and 2019, respectively.

HSBC was responsible for approximately 4%, 6% and 14% of our open-end mutual fund sales in 2021, 2020 and 2019, respectively. HSBC is not under any obligation to sell a specific amount of AB Fund shares and is not our affiliate.

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, 2021, retail U.S. Fund AUM were approximately $73 billion, or 23% of retail AUM, as compared to $62 billion, or 23%, ~~39% and 35% of our AUM~~ as of December 31, 2020, and $55 billion, or 23%, as of December 31, 2019. Non-U.S. Fund AUM, as of December 31, 2021, totaled $130 billion, or 41% of retail AUM, as compared to $110 billion, or 41%, as of December 31, 2020, and $103 billion, or 43%, as of December 31, 2019.


2021 Annual Report			7

Table of Contents

Part I

Our Retail Services represented approximately 41%, 39% and 39% of our AUM as of December 31, 2021, 2020 and 2019, respectively, and the fees we earned from providing these services represented approximately 50%, 49% and 46% of our net revenues for the years ended December 31, 2021, 2020 and 2019, ~~and 2018, respectively, and the fees we earned from providing these services represented approximately 49%, 46% and 44% of our net revenues for the years ended December 31, 2020, 2019 and 2018,~~ respectively. Our AUM and revenues are as follows:

Retail Services Assets Under Management

(by Investment Service)

December 31, % Change
2020 2019 2018 2020-19 2019-18
(in millions)
Equity Actively Managed:
U.S. $ 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):
U.S. 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:
U.S. 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:
U.S. 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):
U.S. 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):
U.S. 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
Total:
U.S. 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


		Years Ended December 31								% Change
	2021			2020			2019			2021-20		2020-19
		(in millions)
Equity:
Equity Actively Managed		$	154,200		$	106,866		$	81,622	44.3	%	30.9	%
Equity Passively Managed(1)		40,821			35,995			34,683		13.4		3.8
Total Equity		195,021			142,861			116,305		36.5		22.8
U.S.		152,106			108,506			84,278		40.2		28.7
Global & Non-US		42,915			34,355			32,027		24.9		7.3
Total Equity		195,021			142,861			116,305		36.5		22.8
Fixed Income:
Fixed Income Taxable		75,813			84,654			88,408		(10.4)		(4.2)
Fixed Income Tax-Exempt		29,009			23,202			20,750		25.0		11.8
Fixed Income Passively Managed(1)		12,762			8,231			8,825		55.0		(6.7)
Total Fixed Income		117,584			116,087			117,983		1.3		(1.6)
U.S.		46,361			36,137			34,830		28.3		3.8
Global & Non-US		71,223			79,950			83,153		(10.9)		(3.9)
Total Fixed Income		117,584			116,087			117,983		1.3		(1.6)
Alternatives/Multi-Asset Solutions(2):
U.S.		3,595			3,071			2,470		17.1		24.3
Global & Non-US		3,718			3,321			2,408		12.0		37.9
Total Alternatives/Multi-Asset Solutions		7,313			6,392			4,878		14.4		31.0
Total:
U.S.		202,062			147,714			121,578		36.8		21.5
Global & Non-US		117,856			117,626			117,588		0.2		—
Total		$	319,918		$	265,340		$	239,166	20.6		10.9
Affiliated - EQH		44,417			36,765			34,448		20.8		6.7

Non-affiliated(3)		275,501			228,575			204,718		20.5		11.7
Total		$	319,918		$	265,340		$	239,166	20.6		10.9

(1)Includes index and enhanced index services.

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

(3)As of 12/31/2021, AXA is no longer considered an affiliated party, as such, AXA-related AUM has been reclassified to non-affiliated in 2020 and 2019.


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

Table of Contents

Part I

~~Table of Contents~~

Revenues from Retail Services

(by Investment Service)

Years Ended December 31, % Change
2020 2019 2018 2020-19 2019-18
(in thousands)
Equity Actively Managed:
U.S. $ 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):
U.S. 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:
U.S. 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:
U.S. 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):
U.S. 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):
U.S. 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:
U.S. 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


		Years Ended December 31								% Change
	2021			2020			2019			2021-20		2020-19
		(in thousands)
Equity:
Equity Actively Managed		$	766,578		$	508,973		$	436,617	50.6	%	16.6	%
Equity Passively Managed(1)		14,773			14,347			16,173		3.0		(11.3)
Total Equity		781,351			523,320			452,790		49.3		15.6
U.S.		556,398			355,542			292,640		56.5		21.5
Global & Non-US		224,953			167,778			160,150		34.1		4.8
Total Equity		781,351			523,320			452,790		49.3		15.6
Fixed Income:
Fixed Income Taxable		517,327			534,164			506,849		(3.2)		5.4
Fixed Income Tax-Exempt		84,945			70,734			65,474		20.1		8.0
Fixed Income Passively Managed(1)		12,994			12,229			12,105		6.3		1.0
Total Fixed Income		615,266			617,127			584,428		(0.3)		5.6
U.S.		115,248			101,825			98,310		13.2		3.6
Global & Non-US		500,018			515,302			486,118		(3.0)		6.0
Total Fixed Income		615,266			617,127			584,428		(0.3)		5.6
Alternatives/Multi-Asset Solutions(2):
U.S.		81,872			57,069			51,958		43.5		9.8
Global & Non-US		13,117			12,723			8,946		3.1		42.2
Total Alternatives/Multi-Asset Solutions		94,989			69,792			60,904		36.1		14.6
Total Investment Advisory and Services Fees:
U.S.		753,518			514,436			442,908		46.5		16.1
Global & Non-US		738,086			695,803			655,214		6.1		6.2
Consolidated company-sponsored investment funds		1,243			733			883		69.6		(17.0)
Total		1,492,847			1,210,972			1,099,005		23.3		10.2
Distribution Revenues		644,125			522,056			447,050		23.4		16.8
Shareholder Servicing Fees		86,857			78,920			73,777		10.1		7.0
Total		$	2,223,829		$	1,811,948		$	1,619,832	22.7		11.9
Affiliated - EQH		28,334			27,130			27,737		4.4		(2.2)

Non-affiliated(3)		2,195,495			1,784,818			1,592,095		23.0		12.1
Total		$	2,223,829		$	1,811,948		$	1,619,832	22.7		11.9

(1)Includes index and enhanced index services.

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

(3)As of 12/31/2021, AXA is no longer considered an affiliated party, as such, AXA-related AUM has been reclassified to non-affiliated in 2020 and 2019.


~~(2)~~2021 Annual Report~~Includes certain multi-asset solutions and services not included in equity or fixed income services.~~ 8			9

Table of Contents

Part I

~~Table of Contents~~

Private Wealth Management

We ~~offer~~partner with our clients, embracing innovation and independent research to ~~our private wealth~~address increasingly complex challenges. Our clients ~~which~~ include high-net-worth individuals and families ~~trusts~~who have created generational wealth as successful business owners, athletes, entertainers, corporate executives and ~~estates, charitable~~private practice owners. We also provide investment and wealth advice to foundations ~~partnerships, private~~ and endowments, family ~~corporations,~~offices and other ~~entities,~~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 ~~these~~ 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 ~~15%~~16%, ~~16%~~15% and ~~17%~~16% of our AUM as of December 31, 2021, 2020 ~~2019~~ and ~~2018,~~2019, respectively. The fees we earned from providing these services represented approximately ~~24%~~25%, ~~26%~~24% and 26% of our net revenues for 2021, 2020 ~~2019~~ and ~~2018,~~2019, respectively. Our AUM and revenues are as follows:



Private Wealth Services Assets Under Management (by Investment Service)

~~Private Wealth Services Assets Under Management~~


		Years Ended December 31								% Change
	2021			2020			2019			2021-20		2020-19
		(in millions)
Equity:
Equity Actively Managed		$	59,709		$	50,854		$	50,934	17.4	%	(0.2)	%
Equity Passively Managed(1)		1,764			666			174		164.9	%	n/m
Total Equity		61,473			51,520			51,108		19.3		0.8
U.S.		35,014			28,776			26,982		21.7		6.6
Global & Non-US		26,459			22,744			24,126		16.3		(5.7)
Total Equity		61,473			51,520			51,108		19.3		0.8
Fixed Income:
Fixed Income Taxable		14,567			14,515			12,170		0.4		19.3
Fixed Income Tax-Exempt		26,929			25,764			25,117		4.5		2.6
Fixed Income Passively Managed(1)		230			195			372		17.9		(47.6)
Total Fixed Income		41,726			40,474			37,659		3.1		7.5
U.S.		36,166			35,042			32,685		3.2		7.2
Global & Non-US		5,561			5,432			4,974		2.4		9.2
Total Fixed Income		41,727			40,474			37,659		3.1		7.5
Alternatives/Multi-Asset Solutions(2):
U.S.		6,926			5,927			6,808		16.9		(12.9)
Global & Non-US		11,446			7,064			5,484		62.0		28.8
Total Alternatives/Multi-Asset Solutions		18,372			12,991			12,292		41.4		5.7
Total:
U.S.		78,106			69,745			66,475		12.0		4.9
Global & Non-US		43,466			35,240			34,584		23.3		1.9
Total		$	121,572		$	104,985		$	101,059	15.8		3.9

~~(by Investment Service)~~

December 31, % Change
2020 2019 2018 2020-19 2019-18
(in millions)
Equity Actively Managed:
U.S. $ 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):
U.S. 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:
U.S. 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:
U.S. 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):
U.S. — — 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):
U.S. 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
Total:
U.S. 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.

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


10			AllianceBernstein

Table of Contents

Part I

Revenues from Private Wealth Services

(by Investment Service)

Years Ended December 31, % Change
2020 2019 2018 2020-19 2019-18
(in thousands)
Equity Actively Managed:
U.S. $ 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):
U.S. 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:
U.S. 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:
U.S. 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):
U.S. 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):
U.S. 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:
U.S. 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


		Years Ended December 31								% Change
	2021			2020			2019			2021-20		2020-19
		(in thousands)
Equity:
Equity Actively Managed		$	584,455		$	487,899		$	510,911	19.8	%	(4.5)	%
Equity Passively Managed(1)		4,780			1,113			334		n/m		n/m
Total Equity		589,235			489,012			511,245		20.5		(4.3)
U.S.		325,154			263,938			267,815		23.2		(1.4)
Global & Non-US		264,081			225,074			243,430		17.3		(7.5)
Total Equity		589,235			489,012			511,245		20.5		(4.3)
Fixed Income:
Fixed Income Taxable		72,404			71,575			63,964		1.2		11.9
Fixed Income Tax-Exempt		130,391			123,952			122,447		5.2		1.2
Fixed Income Passively Managed(1)		2,634			2,891			4,475		(8.9)		(35.4)
Total Fixed Income		205,429			198,418			190,886		3.5		3.9
U.S.		167,402			160,666			156,909		4.2		2.4
Global & Non-US		38,027			37,752			33,977		0.7		11.1
Total Fixed Income		205,429			198,418			190,886		3.5		3.9
Alternatives/Multi-Asset Solutions(2):
U.S.		249,432			109,169			123,216		128.5		(11.4)
Global & Non-US		71,524			76,065			68,728		(6.0)		10.7
Total Alternatives/Multi-Asset Solutions		320,956			185,234			191,944		73.3		(3.5)
Total Investment Advisory and Services Fees:
U.S.		741,987			533,773			547,940		39.0		(2.6)
Global & Non-US		373,632			338,891			346,135		10.3		(2.1)

Total		1,115,619			872,664			894,075		27.8		(2.4)
Distribution Revenues		7,641			7,137			7,289		7.1		(2.1)
Shareholder Servicing Fees		2,882			2,871			3,141		0.4		(8.6)
Total		$	1,126,142		$	882,672		$	904,505	27.6		(2.4)

(1)Includes index and enhanced index services.

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


~~(2)~~2021 Annual Report~~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.~~ 10			11

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~~Table~~•our commitment to place the interests of ~~Contents~~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 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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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://www.alliancebernstein.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 SEC. In addition, the SEC maintains an Internet site (http://www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.

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Item 1A.Risk Factors

Please consider this section along with the description of our business in Item 1, the competition section immediately above and AB’s financial information contained in Items 6, 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, including risks relating to COVID-19

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. ~~The~~Our AUM remain sensitive to the volatility associated with global financial market conditions. For example, the dramatic securities market declines experienced during March 2020, which resulted from the global effects of COVID-19, caused a significant reduction in our AUM. Markets and AUM levels have since recovered to new highs following unprecedented, coordinated monetary and fiscal policy support and ~~more recently,~~ the approval of vaccines to help remedy the global pandemic. However, we recognize that, due to continued uncertainty associated with these circumstances, markets may remain volatile and, accordingly, there remains risk of a significant reduction in our revenues and net income in future periods, particularly if the negative effects on the global economy from COVID accelerate.

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, such as the U.S. civil unrest centered around racial inequity experienced ~~across the U.S. during the second, third and fourth quarters of~~in 2020 ~~and~~or the riot experienced in Washington D.C. in January 2021 surrounding the transition to a new Presidential administration, may also affect the market value of our AUM. Health crises, such as the COVID-19 pandemic, as well as other incidents that interrupt the expected course of events, such as natural disasters, war or civil disturbance, acts of terrorism (whether foreign or domestic), 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. Furthermore, the preventative and protective health-related actions, such as business activity suspensions and population lock-downs, that governments have taken, and may continue to take, in response to COVID-19 have resulted, and may continue to result, in periods of business interruption, inability to obtain raw materials, supplies and component parts, and reduced or disrupted operations. These circumstances have caused, and may continue to cause, significant economic disruption and high levels of unemployment, as well as inflationary pressures, which ~~will~~could adversely affect the financial condition and results of operations of many of the companies in which we invest, and likely reduce the market value of their securities and thus our AUM and revenues. Furthermore, ~~the~~ significant market volatility and uncertainty, and reductions in the availability of margin financing, ~~we experienced during the first quarter of 2020 severely limited~~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 have improved considerably since the first quarter of 2020 following the stimulus programs announced by the U.S. Federal Reserve and U.S. Treasury, 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.


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•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

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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.

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 over the past decade, as active managers, which invest based on individual security selection, have, on average, consistently underperformed passive services, which invest based on market indices. Active performance relative to benchmarks ~~in the first half~~as of ~~2020~~mid-2021 remained mixed, with ~~51%~~47% of active managers outperforming their passive benchmarks for the ~~six~~12 months ended June 30, ~~2020~~2021 (latest data available). Non-U.S. stock active funds fared better with ~~60%~~59% outperforming benchmarks, while ~~48%~~40% of U.S. large-cap stock active funds ~~outperformed and just 40% of active~~outperformed. Actively-managed bond funds ~~outperformed their~~generally performed well in 2021, with intermediate core, corporate and high yield funds each generally outperforming benchmarks. ~~Also, results varied among growth, value and core managers.~~

~~Demand for passive strategies persisted, and while active equity managers continued to struggle to attract new assets, flows to active fixed income managers remained positive. In the~~Flows into actively-managed funds improved industry-wide in 2021, with U.S.~~, total~~ industry-wide active mutual fund ~~outflows~~flows rebounding to inflows of $217 billion in 2021, contrasted with $196 billion of outflows in ~~2020 increased from net outflows of $12~~2020. Active fixed income U.S. mutual fund inflows accelerated to $366 billion in ~~2019. Active~~2021, compared to $246 billion in 2020. Furthermore, active equity U.S. mutual fund outflows decelerated to $198 billion in 2021, compared to outflows of $338 billion in ~~2020~~2020. However, the improvement in active fund flows was surpassed by increased ~~by 23% year-over-year. Active fixed income~~demand for passive strategies in the U.S., as industry-wide total passive mutual ~~funds showed continued strength with~~net inflows ~~of $246~~increased to $918 billion in ~~2020, though they decreased 9%~~2021 from ~~$271~~$361 billion in ~~2019. Fixed income active flows were positive in each quarter in 2020 following the sell-off in March~~ 2020. ~~Total industry-wide passive mutual fund inflows of $361 billion declined by 20% from last year's inflows of $450 billion.~~ In this environment, organic growth through ~~positive~~ net inflows is 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. ~~While~~Institutional global market trading volumes ~~increased in 2020 due~~continue to ~~higher~~be pressured (notwithstanding the heightened market volatility and trading volume predominantly relating to ~~COVID,~~COVID-19 in the ~~broader trend in recent years has been declines, which we would expect to continue, fueled~~first half of 2020) 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, and to a lesser extent AXA~~ 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 ~~whether as a result of EQH's public offerings since 2018 or another factor,~~ it could have a material adverse effect on our business, results of operations and/or financial condition.

EQH (our parent company) and its subsidiaries isconstitute our largest client. Our EQH affiliates represented approximately ~~19%,~~17% of our AUM as of December 31, ~~2020,~~2021, and we earned approximately 3% of our net revenues from services we provided to them in ~~2020. Also, AXA and its subsidiaries represented approximately 3% of our AUM as of December 31, 2020, and we earned approximately 2% of our net revenues from services we provided to them in 2020.~~2021. Our related investment management agreements are terminable at any time or on short notice by either party, and ~~neither~~ EQH ~~nor AXA~~ 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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During the second quarter of 2018, AXA completed the sale of a minority stake in EQH through an initial public offering ("IPO"). Since then, AXA has completed additional offerings and taken other steps, most recently during the fourth quarter of 2019. As a result, AXA owned less than 10% of the outstanding common stock of EQH as of December 31, 2020.

While we cannot at this time predict the full impact on AB of this transaction, such impact has included a reduction in the support AXA provided to AB in the past with respect to AB's investment management business, resulting in a modest decrease in our revenues and ability to initiate new investment services. Also, AB relies on AXA, including its subsidiary, AXA Business Services, for several significant services, and AB has benefited from its affiliation with AXA in certain common vendor relationships. Some of these arrangements have changed, and others are expected to change, with immaterial financial implications for AB.

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 institutional investors, mutual funds and private wealth clients, and selling and distribution agreements with financial 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


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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 ~~6.0%~~6.7%, ~~8.5%~~8.7% and ~~0.8%~~0.6% of the assets we manage for institutional clients, private wealth clients and retail clients, respectively (in total, ~~4.4%~~4.5% 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 $245.1 million, $132.6 million and $99.6 million in 2021, 2020 and ~~$118.1 million in 2020,~~ 2019, ~~and 2018,~~ 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 and the effects of MiFID ~~II.~~

II and Brexit.

Electronic, or “low-touch,” trading represents a significant percentage of buy-side trading activity and typically produces transaction fees that are significantly lower than the price of 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

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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.

We discuss the risks associated with the second installment of the Markets in Financial Instruments Directive II (“MiFID II”) and Brexit below in "Legal and Regulatory-related Risks" in this Item 1A.

Fluctuations in the exchange rates between the U.S. dollar and various other currencies can adversely affect our AUM, revenues and results of ~~operations~~.

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.


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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, swap 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 risk that the underlying positions do not move identically to the related derivative instruments).

We may engage in strategic transactions that could pose risks.

As part of our business strategy, we consider potential strategic transactions, including acquisitions, dispositions, mergers, consolidations, joint venture partnerships 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.

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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.

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, consisting of senior officers and employees, which oversees pricing controls and valuation processes. 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.

We may not have sufficient information to confirm or review the accuracy of valuations provided to us by underlying external managers for the funds in which certain of our alternative investment products invest.

Certain of our alternative investment services invest in funds managed by external managers (“External Managers”) rather than investing directly in securities and other instruments. As a result, our abilities will be limited with regard to (i) monitoring such investments, (ii) regularly obtaining complete, accurate and current information with respect to such investments and (iii) exercising control over such investments. Accordingly, we may not have sufficient information to confirm or review the accuracy of valuations provided to us by External Managers. In addition, we will be required to rely on External Managers’ compliance with any applicable investment guidelines and restrictions. Any failure of an External Manager to operate within such guidelines or to provide accurate information with respect to the investment could subject our alternative investment products to losses and cause damage to our reputation.


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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, generally 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 effect on our financial condition, results of operations and business prospects. For additional information regarding competitive factors, see “Competition” in Item 1.

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Human Capital-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 do so.

The market for these professionals is extremely competitive. ~~They~~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 ~~adjusted~~ operating margin. As a result, we remain vigilant about aligning our cost structure (including headcount) with our revenue base. For additional information regarding our compensation practices, see "Compensation Discussion and Analysis" in Item 11.

Our process of relocating our headquarters may not be executed as we envision.

We have ~~announced that we will establish~~established our corporate headquarters in and expect to relocate a total of approximately 1,250 jobs previously located in the New York metropolitan area to Nashville, Tennessee (for additional information, see “Relocation Strategy” in Item 7). Although the eventual impact on AB from this process is not yet known, the uncertainty created by these circumstances could have a significant adverse effect on AB’s ability to motivate and retain current employees. Further significant managerial and operational challenges could arise, such as ineffective transfer of institutional knowledge from current employees to newly-hired employees, if AB experiences significantly greater attrition among current employees than the firm anticipates in connection with the relocation and/or if the firm encounters more difficulty than expected in hiring qualified employees to help staff our Nashville headquarters.

Additionally, our estimates for both the transition costs and the corresponding expense savings relating to our headquarters relocation, which we discuss in more detail in “Relocation Strategy” in Item 7, are based on our current assumptions of employee relocation costs, severance, and overlapping compensation and occupancy costs. If our assumptions turn out to be inaccurate, our ~~adjusted net revenues~~expenses and ~~adjusted~~ operating income could be adversely affected.


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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

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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 attack by one or more cyber criminals (including phishing attacks attempting to obtain confidential information and 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 periodically, 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.

Unpredictable events, including climate change, outbreak of infectious disease, natural disaster, dangerous weather conditions, technology failure, 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 ongoing COVID-19 pandemic) could interrupt our operations by:

•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.


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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 New York City, London, England, and Nashville, Tennessee, 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.

~~Table of Contents~~

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, third-party vendors or issuers 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.

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.


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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 ~~2020.~~2021. 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.

~~Table of Contents~~

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 maintain may not fully cover all potential exposures.

We maintain professional liability, 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.

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, 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.

In Europe, MiFID II, which became effective in January 2018, makes significant modifications to the manner in which European broker-dealers can be compensated for research. These modifications have reduced, and are believed to have significantly reduced, the overall research spend by European buy-side firms, which has decreased the revenues we derive from our European clients. Our European clients may continue to reduce their research budgets, which could result in a significant decline in our sell-side revenues.


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Also, while MiFID II is not applicable to firms operating outside of Europe, competitive and client pressures increasingly may force buy-side firms operating outside of Europe to pay for research from their own resources instead of through bundled trading commissions. To the extent that occurs, we expect that research budgets from those clients will decrease further, which could result in an additional significant decline in our sell-side revenues. Additionally, these competitive and client pressures may result in our buy-side operation paying for research out of our own resources instead of through bundled trading commissions, which could increase our firm's expenses and decrease our operating income.

Additionally, in July 2017 the Chief Executive of the U.K. Financial Conduct Authority (the “FCA”), which regulates the London Interbank Offered Rate, or “LIBOR,” as a “benchmark” or “reference rate” for various interest rate calculations, announced that the FCA will no longer persuade or compel banks to submit rates for the calculation of the LIBOR benchmark after 2021. In November 2020, the ICE Benchmark Administration Limited announced a plan to extend the date as of which most U.S. LIBOR values would cease being computed from December 31, 2021 to June 30, 2023. Although financial regulators and industry working groups have suggested alternative reference rates, global consensus on alternative rates is lacking and the process for amending existing contracts or instruments to transition away from LIBOR remains unclear. The elimination of LIBOR or changes to other reference rates or any other changes or reforms to the determination or supervision of reference rates may adversely affect the amount of interest payable or interest receivable on certain of our firm's portfolio investments. These changes may also impact the market liquidity and market value of these portfolio investments. We are finalizing our global assessment of exposure in relation to funds utilizing LIBOR based instruments and benchmarks. Further, we are prioritizing the mitigation of risks associated with the forecast changes to financial instruments and performance benchmarks referencing existing LIBOR rates, and concurrently any impact on AB portfolios and investment strategies.

Lastly, it also is uncertain how regulatory trends will further evolve, both in the U.S. and abroad. For example, following the Brexit referendum in June 2016, the U.K.'s departure from the European Union (the "EU") resulted in the U.K. leaving the EU Single Market on December 31, 2020. While the U.K. and the EU have agreed to a trade deal, which took effect on January 1, 2021, this deal does not include specific arrangements for financial services. Accordingly, since the start of 2021, our U.K.-based buy-side and sell-side subsidiaries have implemented alternative arrangements in EU jurisdictions (utilizing AB's EU-based subsidiaries) to ensure continued operations in the EU Single Market. These arrangements are subject to potential change due to ongoing negotiations between the U.K. and the EU on future regulatory cooperation, and it is difficult to ascertain how any such changes may impact the ability of our U.K.-based subsidiaries to provide services to EU-based clients in the future.

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 may be 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.


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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

~~Table of Contents~~

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 request a copy of the transfer program from our Corporate Secretary (~~corporate_secretary@alliancebernstein.com~~(corporate_secretary@alliancebernstein.com)). Also, we have filed the transfer program as Exhibit 10.07 to this Form 10-K.

Changes in the partnership structure of AB Holding and AB and/or changes in the tax law governing partnerships would have significant tax ramifications.

AB Holding, 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, is a ~~“grandfathered”~~ PTP for federal income tax purposes. AB Holding is also subject to the 4.0% New York City unincorporated business tax (“UBT”), net of credits for UBT paid by AB. In order to preserve AB Holding’s status as a ~~“grandfathered”~~ PTP for federal income tax purposes, management seeks to ensure that AB Holding does not directly or indirectly (through AB) enter into a substantial new line of business. A “new line of business” includes any business 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% of its total assets in, the new line of business.

AB is a private partnership for federal income tax purposes and, accordingly, is not subject to federal and state corporate income taxes. However, AB is subject to the 4.0% UBT. Domestic corporate subsidiaries of AB, which are subject to federal, state and local income taxes, generally are included in the filing of a consolidated federal income tax return with separate state and local income tax returns being filed. 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., AB’s effective tax rate will increase as our international subsidiaries are subject to corporate 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. If such units were to be considered readily tradable, AB would be subject to federal and state corporate income tax on its net income. Furthermore, as noted above, 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 ~~grandfathered~~ PTP and would become subject to corporate income tax as set forth above. If AB and AB Holding were to become subject to corporate income tax as set forth above, their net income and quarterly distributions to Unitholders would be materially reduced. For information about the significant restrictions on transfer of AB Units, see the risk factor immediately above.

Additionally, past or future 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.

If, pursuant to the Bipartisan Budget Act of 2015 ("2015 Act"), 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.

Although the IRS, under current law, generally determines tax adjustments at the partnership level when it audits the income tax return of a partnership, the IRS, with respect to taxable years beginning on or before December 31, 2017, is required to collect any additional taxes, interest and penalties from the partnership's individual partners. The 2015 Act modifies this procedure for audits of a partnership’s taxable years beginning after December 31, 2017 and, if a partnership meets certain requirements and makes a proper election, for audits of a partnership’s taxable years beginning before January 1, 2018. We may choose to make such an election if we receive a written notice of selection for examination for an eligible taxable year or if we file, on or after January 1, 2018, an administrative adjustment request for an eligible taxable year and otherwise qualify to make such an election.

Generally, we will have the ability to collect tax liability 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, as a publicly traded partnership, our Partnership Representative (as defined below) may, in certain instances, request that any “imputed underpayment” 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.


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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, U.S. federal income tax audits and judicial review of administrative adjustments by the IRS. If we do not make such a designation, the IRS can select any person as the Partnership Representative. Any actions taken by us or by the Partnership Representative on our behalf with respect to, among other things, U.S. federal income tax audits and judicial review of administrative adjustments by the IRS, will be binding on us and our Unitholders.

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. Also, a partnership that is a partner of another partnership 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). The upper-tier partnership must timely complete the “push-out” of the adjustment in order for it to be effective. Such election must be made by the extended due date for the return for the adjustment year of the audited partnership, regardless of whether the audited partnership is required to file a return for the adjustment year or timely files a request for an extension for its return. There are a number of 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 a 10% withholding tax on the sale of their AB Units or AB Holding Units, which could reduce the value of such Units.

Gain or loss from the sale or exchange of partnership units after November 27, 2017 by a non-U.S. unitholder are treated as effectively connected with a U.S. trade or business 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. The Tax Cuts and Jobs Act also imposed certain withholding requirements for the sale of partnership units by a non-U.S. unitholder and authorized the IRS to issue regulations to carry out the withholding rules in the case of publicly traded partnerships. The requirement to withhold on amounts realized in connection with the sale, exchange or disposition of certain interests in a publicly traded partnership (including by brokers) is suspended under Notice 2018-08 for transfers that occur before January 1, 2022, and therefore no withholding will apply. On November 30, 2020, the IRS published final regulations (the "1446 Final Regulations") that address withholding tax and information reporting with respect to interests in publicly traded partnerships engaged in a U.S. trade or business. The 1446 Final Regulations end the suspension of withholding on the sale, exchange or disposition of certain interests in a publicly traded partnership, effective January 1, 2022, but place the primary responsibility for such withholding obligations for transfers effected through brokers on the broker, and not the publicly ~~trade~~traded partnership. However, the requirement to withhold on amounts realized in connection with the sale, exchange or disposition of certain interests in a publicly traded partnership (including by brokers) is suspended under Notice 2021-51 for transfers that occur before January 1, 2023, and no withholding will apply until that date. Under the 1446 Final Regulations, a publicly traded partnership may be liable for any under-withholding by a broker that relies on a qualified notice for which the publicly traded partnership failed to make a reasonable estimate of the amounts required for determining the applicability of the "ten percent exception." The "ten percent exception" applies if, either (1) the publicly traded partnership was not engaged in a U.S. trade or business during a specified period of time, or (2) upon a hypothetical sale of the publicly traded partnership'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 United States would be less than 10 percent of the total net gain, or (ii) no gain would have been effectively connected with the conduct of a trade or business in the United States.

We may be liable for any under-withholding by nominees on our Unitholder distributions after January 1, ~~2022.~~

2023.

Under the 1446 Final Regulations, for distributions made after January 1, 2022, a publicly traded partnership must post on its primary public website (and keep accessible for 10 years), and deliver to any registered holder that is a nominee, a qualified notice that states the amount of a distribution that is attributable to each type of income group specified in the 1446 Final Regulations. If the qualified notice is incorrect such that it causes a broker to under-withhold with respect to an amount in excess of cumulative net income, the publicly traded partnership is liable for any under-withholding on such amount. Notice 2021-51 suspends these requirements for distributions made before January 1, 2023.


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Item 1B.Unresolved Staff Comments

~~We have no~~Neither AB nor AB Holding has unresolved comments from the staff of the SEC to report.

~~Table of Contents~~

Item 2.Properties

Our ~~principal executive offices~~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 are occupied~~York. We occupy this space 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 (or are seeking to sub-let) approximately 487,679 square feet of space.

~~In addition,~~Also, we lease approximately 229,147 square feet of space at One North Lexington, White Plains, New York under a lease expiring in 2021. At this location, we currently do not occupy any space and have sub-let (or are seeking to sub-let) the full 229,147 square feet of space.

We entered into a 20-year lease agreement in New York, New York, at 66 Hudson Boulevard, for ~~190,000~~165,608 square feet that is expected to commence in 2024. During the fourth quarter of 2020, we exercised an option whereby we were able to reduce our committed footprint by half a floor, reducing our square feet commitment from 190,000 square feet to approximately 166,000 square feet.

We entered into short-term leases for office space in Nashville, Tennessee during the construction of our new corporate headquarters at 501 Commerce Street, which we will vacate upon completion of 501 Commerce Street.

~~We entered into a 15-year lease agreement in Nashville, Tennessee, at 501 Commerce Street, for 218,976 square feet that commenced in the fourth quarter of 2020.~~

We also lease 50,792 square feet of space in San Antonio, Texas under a lease expiring ~~April 30, 2029 with options to extend through 2039.~~

in 2029.

In addition, we lease ~~less significant~~more modest amounts of space in 23 other cities in the United States.

Our subsidiaries lease space in 30 cities outside the United States, the most significant of which are two leases in London, England, ~~under a~~one lease expiring in 2022 and a second lease expiring in 2031, and in Hong Kong, China, under a lease expiring in 2027. In London, we currently lease 65,488 square feet of space, within which we currently occupy approximately 54,746 square feet of space and have sub-let approximately 10,742 square feet of ~~space.~~space, which will expire in 2022. In 2021, we signed a 10-year lease for 52,814 square feet for an additional London location that we expect to occupy by the fourth quarter of 2022. 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. If the likelihood of a negative outcome is reasonably possible and we are able to determine an estimate of the possible loss or range of loss in excess of amounts already accrued, if any, we disclose that fact together with the estimate of the possible loss or range of loss. 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 also 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.

AB may be involved in various 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.


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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 31, ~~2020,~~2021, the closing price of an AB Holding Unit on the NYSE was ~~$33.77~~$48.84 per Unit. On December 31, ~~2020,~~2021, there were (i) ~~974~~928 AB Holding Unitholders of record for approximately ~~81,000~~82,000 beneficial owners, and (ii) ~~378~~317 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, 2021, 2020 ~~2019~~ and ~~2018.~~

2019.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

Each quarter, ~~since the third quarter of 2011,~~ AB ~~has implemented plans~~considers whether to implement a plan to repurchase AB Holding Units pursuant to Rules 10b5-1 and 10b-18 under the Exchange Act. ~~The~~We did not, however, adopt a plan ~~adopted~~ during the fourth quarter of ~~2020 expired at the close of business on February 10,~~ 2021. 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.


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AB Holding Units bought by us or one of our affiliates during the fourth quarter of ~~2020~~2021 are as follows:



Issuer Purchases of Equity Securities

~~Issuer Purchases of Equity Securities~~


Period	Total Number of AB Holding Units Purchased	Average Price Paid Per AB Holding Unit, net of Commissions			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
10/1/21-10/31/21(1)(2)	281,579		$	50.46	—	—
11/1/21-11/30/21	—		—		—	—
12/1/21-12/31/21(1)	2,449,657		49.95		—	—
Total	2,731,236		$	50.00	—	—

Period Total
Number of
AB Holding
Units
Purchased Average
Price Paid
Per AB
Holding Unit,
net of
Commissions 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
10/1/20-10/31/20(1)(2)
109,738 $ 27.95 — —
11/1/20-11/30/20(1)(2)
490,480 30.97 — —
12/1/20-12/31/20(1)(2)
2,343,310 32.58 — —
Total 2,943,528 32.14 — —

(1)During the fourth quarter of ~~2020,~~2021, we purchased ~~2,221,913~~2,449,716 AB Holding Units from employees 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 ~~2020,~~2021, we purchased ~~721,615~~281,520 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.

~~Table of Contents~~

Neither we nor our affiliates bought any AB Units ~~bought by us or one of our affiliates~~ during the fourth quarter of ~~2020 are as follows:~~

~~Issuer Purchases of Equity Securities~~

Period Total Number
of
AB
Units
Purchased Average
Price Paid
Per
AB
Unit, net of
Commissions Total
Number of
AB
Units Purchased as
Part of
Publicly
Announced
Plans or
Programs Maximum
Number (or
Approximate
Dollar Value)
of AB
Units that
May Yet Be
Purchased
Under the
Plans or
Programs
10/1/20-10/31/20 — — — —
11/1/20-11/30/20 — — — —
12/1/20-12/31/20(1)
800 32.57 — —
Total 800 $ 32.57 — —

~~(1)During December 2020, we purchased 800 AB Units in a private transaction.~~

2021.


2021 Annual Report			31

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Part II

Item 6.[~~Selected Financial Data~~Reserved]

~~Selected Consolidated Financial Data~~

Years Ended December 31,
2020 2019 2018 2017 2016
(in thousands, except per unit amounts and unless otherwise indicated)
INCOME STATEMENT DATA:
Revenues:
Investment advisory and services fees $ 2,595,436 $ 2,472,044 $ 2,362,211 $ 2,201,305 $ 1,933,471
Bernstein research services 459,744 407,911 439,432 449,919 479,875
Distribution revenues 529,781 455,043 418,562 412,063 384,405
Dividend and interest income 50,923 104,421 98,226 71,162 46,939
Investment (losses) gains (16,401) 38,659 2,653 92,102 93,353
Other revenues 104,703 97,559 98,676 97,135 99,859
Total revenues 3,724,186 3,575,637 3,419,760 3,323,686 3,037,902
Less: interest expense 15,650 57,205 52,399 25,165 9,123
Net revenues 3,708,536 3,518,432 3,367,361 3,298,521 3,028,779
Expenses:
Employee compensation and benefits:
Employee compensation and benefits 1,494,198 1,442,783 1,378,811 1,313,469 1,229,721
Promotion and servicing:
Distribution-related payments 569,283 487,965 427,186 411,467 363,603
Amortization of deferred sales commissions 27,355 15,029 21,343 31,886 41,066
Trade execution, marketing, T&E and other 189,787 219,860 222,630 213,275 216,542
General and administrative:
General and administrative 485,544 484,750 448,996 481,488 426,147
Real estate charges 5,526 3,324 7,160 36,669 17,704
Contingent payment arrangements 1,855 (510) (2,219) 267 (20,245)
Interest on borrowings 6,180 13,035 10,359 8,194 4,765
Amortization of intangible assets 21,372 28,759 27,781 27,896 26,311
Total expenses 2,801,100 2,694,995 2,542,047 2,524,611 2,305,614
Operating income 907,436 823,437 825,314 773,910 723,165
Income taxes 45,653 41,754 45,816 53,110 28,319
Net income 861,783 781,683 779,498 720,800 694,846
Net (loss) income of consolidated entities attributable to non-controlling interests (4,169) 29,641 21,910 58,397 21,488
Net income attributable to AB Unitholders $ 865,952 $ 752,042 $ 757,588 $ 662,403 $ 673,358
Basic net income per AB Unit $ 3.19 $ 2.78 $ 2.79 $ 2.46 $ 2.48
Diluted net income per AB Unit $ 3.19 $ 2.78 $ 2.78 $ 2.45 $ 2.47
Operating margin(1)
24.6 % 22.6 % 23.9 % 21.7 % 23.2 %
CASH DISTRIBUTIONS PER AB UNIT(2)
$ 3.20 $ 2.82 $ 2.96 $ 2.57 $ 2.15
BALANCE SHEET DATA AT PERIOD END:
Total assets $ 9,697,840 $ 8,706,092 $ 8,789,098 $ 9,282,734 $ 8,741,158
Debt $ 675,000 $ 560,000 $ 546,267 $ 565,745 $ 512,970
Total capital $ 4,111,523 $ 4,017,101 $ 3,916,209 $ 4,063,304 $ 4,068,189
ASSETS UNDER MANAGEMENT AT PERIOD END (in millions) $ 685,923 $ 622,915 $ 516,353 $ 554,491 $ 480,201


32			AllianceBernstein

~~(1)Operating income excluding net (loss) income attributable to non-controlling interests as a percentage of net revenues.~~

~~(2)~~ ~~Cash distributions per AB Unit reflect the impact of AB's non-GAAP adjustments. Refer to~~ ~~Item 7~~ ~~for additional information concerning our non-GAAP adjustments.~~

Table of Contents

Part II

Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations

Impact of COVID-19

General Economic Conditions

~~During~~COVID-19 has significantly impacted the global economy since the first quarter of 2020, ~~COVID-19 significantly impacted the global economy. The~~and its impact ~~has been profound, has continued through the fourth quarter of 2020 and is likely to~~may persist for months to come. While ~~many~~most businesses have re-opened, vaccinations ~~have begun~~are progressing in most portions of the world and leading economic indicators, ~~are showing signs of improvement,~~other than heightened inflation, have improved significantly, the overall extent and duration of COVID-19's impact on businesses and economic activity generally remains unclear. ~~A recession in the near term remains possible. Economic effects from COVID-19, which have impacted virtually all countries and industries, include:~~

•~~Many small and large businesses being forced to interrupt their operations and as a result, lay off employees or even close;~~

•~~The re-opening and subsequent shuttering again of certain businesses in various countries around the world;~~

•Temporary large-scale population lock-downs, domestic and international travel restrictions and social-distancing measures were implemented, driving sharp declines in consumer and business spending. Further, while many businesses have re-opened, some are only allowing limited capacity, imposing social distancing restrictions and providing limited hours of operation, and while consumer spending has improved during the second half of 2020, uncertainty remains;

•Schools, many of which were shuttered during the first quarter, have allowed students to return to in-person instruction, but the constant concern and uncertainty of whether an outbreak may occur, have forced many schools to re-implement remote instruction, creating significant strain and uncertainty for working parents, which may slow or reverse the economic~~recovery;~~

•Significant declines and increased volatility impacted global financial markets during the first quarter, including 23.2% and 20.0% declines in the Dow Jones Industrial Average (“Dow”) and S&P 500 Index (“S&P”), respectively. Although the financial markets recovered their first quarter losses to new highs in the months since, the prospect of continued volatility remains, especially given the uncertainty surrounding the continued economic effects of the virus (please see ~~"Market Environment"~~ ~~below for additional details).~~

•The initial distribution of multiple COVID-19 vaccinations was initiated in the later part of the fourth quarter, but the speed, selective nature and logistical challenges of distribution, and the concerns in some communities around the safety and efficacy of the vaccine, have caused turmoil for many, further heightening the anxiety around the virus.

Governments around the world have responded to COVID-19 with economic stimulus measures, including a $2 trillion emergency relief bill passed in the U.S during the first quarter of 2020 and an additional $900 billion in aid passed during the fourth quarter of 2020. Similar fiscal stimulus was passed by many governments around the world. These measures and possible additional stimulus and aid measures are intended to steady businesses and consumers until economic activity meaningfully recovers. The timing and magnitude of any such recovery, however, remains uncertain.

Various countries around the world, and most areas in the U.S., have continued to experience surges in the rates of COVID-19 infections and hospitalizations, which ~~are likely~~have resulted from the ~~result~~emergence and spread of virus variants (particularly the "delta variant" during the second half of 2021 and the "omicron variant" more recently), greatly increased social interactions, including at colleges and universities and social venues, after re-opening of economies, and decreased usage of mitigation techniques, such as ~~well as more contagious strains~~mask-wearing and social distancing, in combination with large portions of the ~~virus. As a result, several countries have paused~~population remaining unvaccinated. These ongoing circumstances surrounding the ~~continued progression of their re-openings or re-imposed closing mandates on certain businesses, such as bars, restaurants and entertainment venues. These circumstances~~virus may adversely affect consumer sentiment and the ~~pace~~durability of business re-openings, and they also may ~~delay any~~slow economic ~~recovery.~~recovery and possibly cause market volatility and even a new downturn.

AB Impact

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., the U.K., 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~~generally remained in place ~~(except in our Asia offices, most of which have reopened)~~ throughout ~~the second, third~~2020 and ~~fourth quarters,~~2021 to ensure operating continuity for all critical functions. We also instituted a 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 of 2020, 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 advise of key developments. Additionally, we continue to monitor communications from the World Health Organization and the U.S. Centers for Disease Control and Prevention, and in the third quarter of 2021 engaged an epidemiologist on a consulting basis, to ensure we have current and accurate information.

~~Table of Contents~~

WeFurthermore, we have ~~continued to enhance our technology, which has increased the effectiveness of our remote work force. We have also~~ continued to enhance our virtual programs to support business functions, such as training on cybersecurity and enhancements to our existing technology ~~platforms.~~platforms, which has increased the effectiveness of our remote work force. There has been a heightened focus on the emotional well-being of our employees, and we have provided regular touch points with employees through virtual town halls and management communications. Additionally, we have maintained regular communications and updates on the virus and the Company's response, which are posted on the Company's internal website, to ensure transparent communication with our employees. ~~If any of our employees test positive for COVID-19 or interact with someone who has the virus, they are required to contact AB immediately for support and contact-tracing.~~

We continue to consider, and in some cases methodically implement, return to office programs for our U.S., European and Asia offices. However, we continue to monitor the daily evolution of the crisis in order to ensure the health and safety of our employees remains our top priority. We will modify our return to office plans, as needed, to ensure the safety of our employees and to ensure that the highest safety and cleanliness protocols are followed. We believe that our business continuity plan and technology platform will continue to support the effectiveness of our employees working remotely.

~~Asset managers, such as AB, rely heavily on the performance of the financial markets largely to determine assets under management (“AUM~~”) and revenues. Our results during the first quarter of 2020 were strong, which was primarily a reflection of financial market conditions during January and February, which were not adversely affected by COVID-19. Market conditions deteriorated dramatically during March, which negatively impacted our performance in that month. Financial markets, and hence our performance, rebounded during the ensuing months, primarily due to a U.S. Federal Government stimulus package and U.S. Treasury programs, which were instituted during March 2020 and throughout the second quarter. These programs renewed confidence in the financial markets by introducing liquidity through government purchasing of financial instruments. As various states and countries around the world eased restrictions on business and lockdown protocols during the second quarter and increasingly throughout the third and fourth quarters, increases in consumer spending, decreases in the unemployment rate and improvement in other leading economic indicators have stimulated domestic and global financial market performance. As a result of these developments, our AUM has increased in the second, third and fourth quarters. However, as U.S. states and countries globally have continued to ease restrictions, there has been a resurgence in the spread of the virus, causing certain states and countries to, among other things, shutter some businesses again or impose new social distancing restrictions. As a result, market volatility continues.

The economic impact of COVID-19 and any additional declines in the financial markets could have a significant adverse effect on our AUM and revenues, particularly if economic activity does not continue to ~~recover.~~recover and inflation continues unabated. Further, we have benefited from certain of our adjusted operating expenses declining significantly as a result of the COVID-19 pandemic, such as costs for travel and entertainment and client meetings, particularly during 2020. Although these costs increased in 2021, they have not yet returned to a normalized level. These cost savings have benefited our margins. If financial markets continue to normalize and economic activity increases, we do not anticipate continued cost savings related to COVID-19, and these savings are not indicative of our future performance. Although countries throughout the world continue to grapple with re-opening their economies, ~~this will continue to be a gradual process, and~~ there is a significant risk that the opening process may be ~~further~~ interrupted or reversed if infection and hospitalization rates increase. Also, ~~although unemployment rates have declined, they are still considered high and~~ any reluctance of consumers to resume spending ~~will~~could do long-term damage to the global economy, which would have an adverse effect on our business. Additionally, as most of our workforce iscontinues working remotely, at least part of the time, we are mindful of increased risk related to cybersecurity, which could significantly disrupt our business functions.

Ultimately, the return to normal business and economic activity will likely require the broad application of effective vaccines. ~~Although the~~The distribution of multiple safe, effective vaccines was initiated towards the end of the fourth quarter ~~the speed, selective nature~~ of ~~those who are eligible to receive~~2020, and the ~~vaccination, as well as logistical challenges regarding availability and~~ distribution of such vaccines generally increased globally throughout 2021. However, the ~~vaccines,~~rate of new vaccinations in the U.S. plateaued, and in some areas began to decline, by the end of the second quarter of 2021, and the rate at which vaccination "boosters" have been administered has lagged. If global vaccination rates do not improve further, a significant risk will remain


2021 Annual Report			33

Table of Contents

Part II

that COVID-19 and/or a variant thereof, could ~~mean many months until~~accelerate global health concerns and, in so doing, cause heightened market and economic turmoil in the ~~general population has been vaccinated.~~future.

Executive Overview

~~Percentage change figures are calculated using assets under management rounded to the nearest million and financial statement amounts rounded to the nearest thousand.~~(1)

Our total assets under management ("AUM") as of December 31, ~~2020~~2021 were ~~$685.9~~$778.6 billion, up ~~$63.0~~$92.7 billion, or ~~10.1%~~13.5%, during ~~2020.~~2021. The increase was driven primarily by market appreciation of ~~$65.4~~$66.6 billion ~~partially offset by~~and net ~~outflows~~inflows of ~~$2.6~~$26.1 billion ~~(due to~~(reflecting Retail net inflows of $20.8 billion, Private Wealth Management net ~~outflows~~inflows of ~~$2.0~~$3.0 billion and ~~Retail net outflows of $1.6 billion, offset by~~ Institutional net inflows of ~~$1.0~~$2.3 billion). ~~Excluding AXA's redemption~~As previously disclosed, we expect additional redemptions by AXA of low-fee ~~fixed income mandates~~retail AUM in the first half of ~~$11.8 billion, the firm generated net inflows~~2022 of ~~$9.2 billion in 2020.~~approximately $5 billion.

Institutional AUM increased ~~$32.9~~$21.5 billion, or ~~11.6%~~6.8%, to ~~$315.6~~$337.1 billion during ~~2020,~~2021, primarily due to market appreciation of ~~$30.5~~$19.4 billion and net inflows of ~~$1.0 billion.~~$2.3 billion, primarily driven by growth in active equities. Gross sales increased ~~$13.8~~$0.8 billion, from ~~$17.1 billion in 2019 to~~ $30.9 billion in ~~2020.~~2020 to $31.7 billion in 2021. Redemptions and terminations increased ~~$11.3~~$0.1 billion, from ~~$12.0 billion in 2019 to~~ $23.3 billion in ~~2020. Excluding AXA's redemption of low-fee fixed income mandates of $11.8 billion, institutional net inflows were $12.8~~2020 to $23.4 billion in ~~2020.~~2021. Institutional sales and redemptions in 2021 include $8.7 billion in sales and $10.0 billion in redemptions associated with the reinsurance agreement entered into by Equitable Financial Life Insurance Company ("Equitable Financial") and a subsidiary of Venerable Holdings, Inc., pursuant to which Equitable Financial ceded to Venerable a portion of its legacy variable annuity business; AB remained the preferred investment manager for the General Account assets transferred

Retail AUM increased ~~$26.1~~$54.6 billion, or ~~10.9%~~20.6%, to ~~$265.3~~$319.9 billion during ~~2020,~~2021, primarily due to market appreciation of ~~$28.1~~$33.6 billion ~~partially offset~~and net inflows of $20.8 billion, primarily driven by ~~net outflows of $1.6 billion.~~growth in active equities. Gross sales increased ~~$3.6~~$21.1 billion, from ~~$75.3~~$78.9 billion in ~~2019~~2020 to ~~$78.9~~

~~Table of Contents~~

$100.0 billion in ~~2020.~~2021. Redemptions and terminations ~~increased $25.5~~decreased $4.4 billion, from ~~$44.0 billion in 2019 to~~ $69.5 billion in 2020 ~~due~~ to ~~record first quarter 2020 redemptions, reflecting the financial market sell-off~~$65.1 billion in ~~March amidst the onset of COVID-19.~~

2021.

Private Wealth Management AUM increased ~~$4.0~~$16.6 billion, or ~~3.9%~~15.8%, to ~~$105.0~~$121.6 billion during ~~2020, primarily~~2021, due to market appreciation of ~~$6.8~~$13.6 billion ~~partially offset~~and net inflows of $3.0 billion, primarily driven by ~~net outflows of $2.0 billion.~~growth in alternatives and multi-asset solutions. Gross sales increased ~~$3.0~~$4.0 billion, from ~~$11.3 billion in 2019 to~~ $14.3 billion in ~~2020.~~2020 to $18.3 billion in 2021. Redemptions and terminations ~~increased $4.1~~decreased $1.2 billion, from ~~$12.4 billion in 2019 to~~ $16.5 billion in ~~2020.~~2020 to $15.3 billion in 2021.

Bernstein Research Services ("Bernstein") revenue ~~increased $51.8~~decreased $7.7 million, or ~~12.7%~~1.7%, in ~~2020.~~2021. The ~~increase~~decrease was due to ~~higher~~lower trading activity driven by lower global market volatility ~~particularly between March~~as compared to the COVID-related volatility in 2020. This was partially offset by higher research payments across Bernstein and June 2020, primarily as a result of COVID-19, which led to higher customer activity and greater global trading volumes. We expect customer activity and trading volumes to gradually decrease in 2021 and to normalize in 2022, as the volatility surrounding COVID-19 begins to decline. Any decreases in customer activity and trading volumes will have a corresponding effect on Bernstein Research services revenue. Furthermore, all of 2020 reflects the inclusion of revenues from our acquisition of Autonomous Research (("Autonomous"~~Autonomous"~~)~~, which closed on April 1, 2019.~~ products.

Our ~~2020~~2021 net revenues of $4.4 billion increased $733.1 million, or 19.8%, compared to net revenues of $3.7 billion ~~increased $190.1 million, or 5.4%, compared to~~in the prior ~~year's net revenues.~~year. The ~~most significant contributors to the~~ increase ~~were~~was primarily driven by higher base advisory fees of ~~$90.4~~$486.6 million, higher distribution revenues of ~~$74.7 million, higher Bernstein Research Services revenue of $51.8~~$122.5 million and higher performance-based fees of ~~$33.0 million, partially offset by higher investment losses of $55.1 million and lower net dividend and interest income of $11.9~~$112.5 million. Our operating expenses of ~~$2.8~~$3.2 billion increased ~~$106.1~~$424.0 million, or ~~3.9%~~15.1%, compared to operating expenses of $2.8 billion in the prior ~~year's expenses.~~year. The increase was primarily ~~was~~ due to higher employee compensation and benefits expenses of $221.8 million, higher promotion and servicing expenses of ~~$63.6 million, higher employee compensation and benefits of $51.4~~$153.5 million and higher general and administrative expenses ~~(including real estate charges)~~ of ~~$3.0 million, partially offset by lower amortization of intangible assets of $7.4 million and lower interest on borrowings of $6.9~~$64.5 million. Our operating income increased ~~$84.0~~$309.0 million, or ~~10.2%~~34.1%, to $1.2 billion from $907.4 million ~~from $823.4 million~~ in ~~2019~~2020 and our operating margin increased ~~from 22.6%~~to 27.3% in ~~2019 to~~2021 from 24.6% in 2020.

Market Environment

Despite ~~2020 being~~ a ~~year marked by a global pandemic, record-breaking recession~~selloff in November resulting from fears surrounding inflation and ~~unemployment levels, and a contentious~~the rising cases of the omicron variant, U.S. ~~presidential election,~~ equity markets ~~closed the year with solid gains.~~finished higher in 2021. The S&P 500, Dow Jones Industrial Average and Nasdaq each rallied ~~for most of the fourth quarter, finishing~~to finish the year with solid gains. With rising inflation remaining a key concern, the Federal Reserve signaled it would begin tapering its quantitative easing at a faster pace and will begin raising their target interest rate in ~~positive territory. In~~ the first half of 2022. Meanwhile, U.S., government negotiations surrounding the ~~presidential election passed with a market-friendly outcome, the distribution of multiple COVID-19 vaccines was initiated~~Build Back Better package and the ~~unemployment rate~~Infrastructure and Investments Jobs Act continued, ~~to decline. Meanwhile, after months of deadlock, a COVID-19 relief package was passed~~with concerns the fiscal stimulus could drive inflation even higher in the fourth quarter, consisting of direct payments, unemployment benefits and small business aid. However, even with the increasing likelihood of COVID-19 vaccines potentially boosting activity in 2021, significant slack in the economy and labor market by the end of this year are likely. As a result, the U.S. Federal Reserve will likely keep interest rates near zero as the economy improves.

2022.

In the U.K., ~~COVID-19~~equities lagged the global gains in 2021 but rose in fourth quarter. Brexit, however, has placed constraints on labor supply and, ~~Brexit uncertainty resulted~~ in ~~the worst performing year for its equity market since the 2008 financial crisis. However, with a Brexit deal reached in the final days of 2020 between the U.K.~~turn, upward pressure on wages and inflation. In response, the ~~E.U. and the distribution of a COVID-19 vaccine, the U.K. economy may rebound in 2021. The~~ Bank of England ~~is likely to keep~~raised interest rates, ~~on hold during~~despite the ~~recovery phase.~~spread of the omicron variant. In China, equities significantly underperformed global equities. The People’s Bank of China reduced the ~~economy has returned~~reserve requirement ratio, releasing inexpensive funds for banks to ~~almost pre-pandemic output levels. Chinese efforts to re-center~~lend, and announced that this cut is not the ~~economy on~~beginning of an easing cycle, but rather a ~~consumer-led model are expected to continue and fiscal~~regular monetary policy action. The risks in China, however, around the property market will likely remain ~~supportive through 2021. More stimulus may be announced in~~a key watchpoint over the first quarter of 2021 as the government continues to support consumption. While the economic outlook for China in 2021 appears positive, one big unknown is the future of the relationship between China and the new U.S. administration.coming months.

1Percentage change figures are calculated using assets under management rounded to the nearest million, while financial statement amounts are rounded to the nearest thousand.


34			AllianceBernstein

Table of Contents

Part II

MiFID II

In Europe, MiFID II, which became effective on January 3, 2018, has made significant modifications to the manner in which European broker-dealers can be compensated for research. These modifications are believed to have significantly reduced the overall research spend by European buy-side firms, which has decreased the revenues we derive from our European clients. Our European clients may continue to reduce their research budgets, which could result in a significant decline in our sell-side revenues.

Also, while MiFID II is not applicable to firms operating outside of Europe, competitive and client pressures may force buy-side firms operating outside of Europe to pay for research from their own resources instead of through bundled trading commissions. If that occurs, we would expect that research budgets from those clients will decrease further, which could result in an additional significant decline in our sell-side revenues. Additionally, these competitive and client pressures may result in our buy-side operation paying for research out of our own resources instead of through bundled trading commissions, which could increase our firm's expenses and decrease our operating income.

~~Table of Contents~~

The ultimate impact of MiFID II on payments for research globally remains uncertain.

~~Equitable Holdings IPO~~Relationship with EQH and its Subsidiaries

~~During the second quarter of 2018, AXA S.A. ("AXA")~~ ~~completed the sale of a minority stake in Equitable Holdings, Inc. (“~~EQH~~”) through an initial public offering ("IPO"). Since then, AXA has completed additional offerings~~ (our parent company) and ~~taken other steps, most recently during the fourth quarter of 2019. As a result, AXA owned less than 10% of the outstanding common stock of~~its subsidiaries are our largest client. EQH ~~as of December 31, 2020.~~

~~While we cannot at this time predict the full impact on AB of this transaction, such impact has included a reduction in the support AXA provided to~~is collaborating with AB in order to improve the ~~past with respect~~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. Equitable Financial has agreed to ~~AB's investment management business, resulting~~provide $10 billion in ~~a modest decrease~~permanent capital2 over the next three years to build out AB’s private illiquid offerings, including private alternatives and private placements. We expect this anticipated capital from Equitable Financial will accelerate both organic and inorganic growth in our ~~revenues~~private alternatives business, allowing us to continue to deliver for our clients, employees, unitholders and ability to initiate new investment services. Also, AB relies on AXA, including its subsidiary, AXA Business Services, for several significant services and AB has benefited from its affiliation with AXA in certain common vendor relationships. Some of these arrangements have changed, and others are expected to change, with immaterial financial implications for AB.

other stakeholders.

Our ending AUM at December 31, 2020 reflects $11.8 billion in 2020 outflows resulting from AXA's redemption of certain low-fee fixed income mandates. We expect these redemptions to total approximately $14 billion, with the remaining redemptions expected to be completed during the first half of 2021. The revenue we earn from the management of these assets is not significant.

Relocation Strategy

~~On May 2, 2018,~~As previously announced, we ~~announced that we would establish~~have established our corporate headquarters in ~~and relocate approximately 1,050 jobs located in the New York metro area to,~~ Nashville, TN. Subsequently, on January 14, 2020, we announced our plans to relocate an additional 200 jobs to Nashville thereby increasing the total relocated jobs to 1,250. The decision to add the additional jobs was the result of the growth in our business, select investments we are making, and the in-sourcing of roles typically performed by consultants.TN, at 501 Commerce Street. Our Nashville headquarters ~~will house~~houses Finance, IT, Operations, Legal, Compliance, Internal Audit, Human Capital, and Sales and ~~Marketing.~~Marketing, and at year-end we had 974 employees in Nashville. We expect to reach a total of 1,250 employees in Nashville by the end of 2024. We have been actively relocating jobs and expect this transition to take several more years. We will continue to maintain a principal location in New York City, which ~~will house~~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 ~~will afford~~affords us the opportunity to provide an improved quality of life alternative for our employees and ~~enable~~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 ~~approximately~~between $145 million to $155 ~~million, which is less than our previous estimate of $155 million to $165~~ 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 ~~approximately~~between $205 million to $215 ~~million, which is greater than our previous estimate of $185 million to $195 million, and is an amount greater than the total transition costs.~~million. However, we did incur some transition costs before we began to realize expense savings. For the period beginning in 2018 and ending in ~~2020,~~the fourth quarter of 2021, we incurred ~~$70~~$97 million of cumulative transition costs compared to ~~$46~~$89 million of cumulative savings. In ~~2020,~~addition, we incurred $27 million of transition costs for the twelve months ended December 31, 2021, compared to $43 million of expense savings, ~~of $30 million were greater than transition costs of $26 million,~~ resulting in aan overall net ~~increase~~savings of ~~$0.01 in~~$16 million for the period. In 2021, our net income per unit (("~~“EPU”~~EPU")~~. We currently anticipate an~~ increased $0.06 as a result of our relocation strategy, which compares to the $0.04 EPU increase that occurred in ~~2021 of approximately $0.02 and~~2020. We also expect to achieve ~~increasing~~ EPU accretion in each year thereafter. Beginning in 2025, once the transition period has been completed, we estimate ongoing annual expense savings ~~towards the upper end~~ of ~~the range of~~approximately $75 million to $80 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 ~~upon~~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.

2 Permanent capital means investment capital of indefinite duration, which may be withdrawn under certain conditions. Although Equitable Financial has indicated its intention over time to provide this investment capital to AB, which is mutually beneficial to both firms, it has no binding commitment to do so.


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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.


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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~~“Risk Factors” and ~~“Cautions~~“Cautions Regarding Forward-Looking Statements” in this 2021 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.

~~Adjusted Operating Margin Target~~

~~We previously adopted a goal of increasing our adjusted operating margin to a target of 30% by 2020 (the~~ ~~“2020 Margin Target”~~), subject to the assumptions, factors and contingencies described as part of our initial disclosure of this target. Our adjusted operating margin, which was 27.5% for 2019, increased to 30.1% for 2020, achieving our target. We do not currently expect to set a new adjusted operating margin target going forward.

Our AUM and, therefore, our investment advisory revenues, including performance-based fee revenues, are heavily dependent on the level and volatility of the financial markets, which ended 2020 favorably. Despite the challenges faced from the COVID-19 pandemic (please refer to ~~“Impact of COVID-19”~~ ~~above and~~ ~~“Risk Factors”~~ in ~~Item 1A~~), we benefited from certain of our adjusted operating expenses declining significantly, such as costs associated with travel and entertainment and client meetings during 2020. We do not anticipate the COVID-19-related cost-savings or market tailwinds to be indicative of future performance. We also expect continued investments in growth initiatives for our firm. Considering these factors, our adjusted operating margin may be less favorable in future periods, although we will continue to strive for improvement over the long-term.

~~Table of Contents~~

Assets Under Management

Assets under management by distribution channel are as follows:


		As of December 31,						% Change						As of December 31					% Change
		2020		2019		2018		2020-19		2019-18			2021		2020		2019		2021-20		2020-19
		(in billions)												(in billions)
Institutions	Institutions	$	315.6	$	282.7	$	246.3	11.6	%	14.8	%	Institutions		$337.1		$315.6		$282.7	6.8	%	11.6	%
Retail	Retail	265.3		239.2		180.8		10.9		32.3		Retail		319.9		265.3		239.2	20.6		10.9
Private Wealth Management	Private Wealth Management	105.0		101.0		89.3		3.9		13.2		Private Wealth Management		121.6		105.0		101.0	15.8		3.9
Total	Total	$	685.9	$	622.9	$	516.4	10.1		20.6		Total		$778.6		$685.9		$622.9	13.5		10.1

Table of and fosters adherence to, the Partnerships’ policies, procedures and practices at all levels. With respect to these matters, the Audit Committee provides an open avenue of communication among the independent registered public accounting firm, senior management, the Internal Audit Department, the Chief Compliance Officer, the Chief Risk Officer and the Board. The Audit Committee held eight regular meetings in 2020.

Contents

~~The Compensation and Workplace Practices Committee ("Compensation Committee~~") consists of Ms. Matus (Chair) and Messrs. Audet, de Oliveira, Kaye, Scott and Pearson. The Compensation Committee held four regular meetings in 2020. For additional information about the Compensation Committee, ~~see “Compensation Discussion and Analysis—Compensation Committee; Process for Determining Executive Compensation” in Item 11.~~Part III

Also, the Compensation Committee has established the Section 16 Subcommittee 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 Section 16 Subcommittee consists of Ms. Matus (Chair) and Messrs. Audet, de Oliveira, Kaye and Scott.

~~The Governance Committee consists of Ms. Matus (Chair) and Messrs. Bernstein, Narayandas and Pearson. The Governance Committee:~~

Responsibilities:

•

~~assists~~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, and~~committees.

•

~~assists~~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 relate to matters of corporate responsibility of the General Partner and the Partnerships.

Governance Committee

Committee Members:

Kristi Matus (Chair)

Seth P. Bernstein

Das Narayandas

Mark Pearson

Meetings in 2021: 1 regular mtg. and 1 special mtg.

~~The Governance Committee held one meeting in 2020.~~



						For a discussion of the Compensation Committee's responsibilities, please see “Compensation Discussion and Analysis - Compensation Committee; Process for Determining Executive Compensation” in Item 11.
			Compensation and Workplace Practices Committee Committee Members: Kristi Matus (Chair) Daniel G. Kaye Mark Pearson Bertram L. Scott Meetings in 2021: 5 regular mtgs. and 1 special mtg.

The functions of each of the Board committees discussed above are more fully described in each committee’s charter. The charters are available onin the "Responsibility - Corporate Governance" section of our Internet Site.

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Audit Committee Financial Experts; Financial Literacy

Audit Committee Financial Expertise

In ~~February 2020,~~May 2021, the Governance Committee, after reviewing materials prepared by management, recommended that the Board determine that each of Ms. Domenici and Messrs. Audet 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 2020.~~May 2021.

In September 2021, the Governance Committee, after reviewing materials prepared by management, recommended that the Board determine that Mr. Walthall 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 September 2021.

Financial Literacy

In ~~February 2020,~~May 2021, the Governance Committee, after reviewing materials prepared by management, recommended that the Board determine that Ms. Domenici, Mr. Audet and Mr. Stonehill each 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 2020.~~

May 2021.

In September ~~2020,~~2021, the Governance Committee, after reviewing materials prepared by management, recommended that the Board determine that Mr. ~~Scott~~Walthall is Financially Literate. The Board so determined at its regular meeting held in September ~~2020.~~2021.

In October 2021, the Governance Committee, after reviewing materials prepared by management, recommended that the Board determine that Ms. Lamm-Tennant is Financially Literate. The Board so determined in October 2021.


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Independence of Certain Directors

In ~~February 2020,~~May 2021, the Governance Committee, after reviewing ~~material~~materials prepared by management, recommended that the Board determine that each of Mses. Domenici and Matus and Messrs. Audet, de Oliveira, Kaye, Narayandas, Scott and Stonehill is independent. The Board determined, at its ~~February 2020~~May 2021 regular meeting, that each of these directors is independent within the meaning of the relevant rules.

In September ~~2020,~~2021, the Governance Committee, after reviewing ~~material~~materials prepared by management, recommended that the Board determine that Mr. ~~Scott~~Walthall is independent. The Board determined, at its September ~~2020~~2021 regular meeting, that Mr. ~~Scott~~Walthall is independent within the meaning of the relevant rules.

In October 2021, the Governance Committee, after reviewing materials prepared by management, recommended that the Board determine that Ms. Lamm-Tennant is independent. The Board determined, in October 2021, that Ms. Lamm-Tennant is independent within the meaning of the relevant rules.

Board Leadership Structure and Role in Risk Oversight

Leadership

The Board, together with the Governance Committee, is responsible for reviewing the Board’s leadership structure. In determining the appropriate individuals to serve as our ~~Chairman~~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.

Contacting our Board

Interested parties wishing to communicate directly with our ~~Chairman~~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 ~~Mr. de Oliveira~~Ms. Lamm-Tennant in care of our Corporate Secretary. Our Corporate Secretary will promptly forward such e-mail or mail to ~~Mr. de Oliveira.~~Ms. Lamm-Tennant. We have posted this information in the ~~“Corporate Responsibility~~“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.

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. 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. Members of the company's risk management team (including our Chief Information 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.


			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

Chief Risk Officer

Members of the company's risk management team (including our Chief Information 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.

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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 suited to serve as our President and CEO, while ~~Mr. de Oliveira’s~~Ms. Lamm-Tennant’s in-depth ~~knowledge of investment management, investment banking~~industry and ~~insurance have proved~~academic experience are invaluable at enhancing the overall functioning of the Board. The Board believes that the combination of a separate Chairman 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.

Code of Ethics and Related Policies

Our directors, officers and employees are subject to our Code of Business Conduct and Ethics. The code 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 Business Conduct and 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, 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 Business Conduct and Ethics may be found in the ~~“Corporate Responsibility~~“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 (“Item 406 Code”). The Item 406 Code ~~which~~ may be found in the ~~“Corporate Responsibility~~“Responsibility - Corporate Governance” section of our Internet ~~Site, was adopted in October 2004 by the Executive Committee.~~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 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 (“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 ~~“Corporate Responsibility~~“Responsibility - Corporate Governance” section of our Internet Site.

The Governance Committee is responsible for considering any request for a waiver under the Code of Business Conduct and 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 ~~“Corporate Responsibility~~“Responsibility - Corporate Governance” section of our Internet Site.

We include in the ~~“Corporate Responsibility~~“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.

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AB Holding Unitholders and AB Unitholders may request a copy of any committee charter, the Guidelines, the Code of Business Conduct and 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 ~~“Corporate Responsibility~~“Responsibility - Corporate Governance” section of our Internet Site.


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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 (“Ethics Committee”) and the Internal Compliance Controls Committee (“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 •			~~the Code of Ethics Oversight Committee (“Ethics Committee”) and the Internal Compliance Controls Committee (“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 Business Conduct and 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.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires directors of the General Partner and executive officers of the Partnerships, and persons who own more than 10% of the AB Holding Units or AB Units, to file with the SEC initial reports of ownership and reports of changes in ownership of AB Holding Units or AB Units. To the best of our knowledge, during ~~2020,~~2021, we complied with all Section 16(a) filing requirements. Our Section 16 filings can be found under “Investor & Media Relations - Reports & SEC Filings” on our Internet Site.

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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 ~~2020~~2021 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 ~~2020~~2021 are:

Seth P. Bernstein

President and Chief Executive Officer ("(“CEO"“)

~~John C. Weisenseel Chief Financial Officer ("CFO~~")

Kate C. Burke

Chief Operating

Officer ("(“COO"“) and Head of Private Wealth

~~Ali DibadjHead of Finance and Strategy~~

Laurence E. Cranch

Chief Legal Officer

Karl Sprules

Head of Global Technology & Operations

Ali Dibadj

CFO and Head of Strategy

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(“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~~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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Progress in Advancing our Growth Strategy in ~~2020~~

2021

In ~~2020,~~2021, the firm’s results demonstrated meaningful progress in executing on our Growth Strategy. Below are key metrics related to the three pillars of the Growth Strategy:


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Deliver superior investment solutions to our clients:

Investment Performance

The firm’s investment teams continue to focus 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 ~~2020,~~2021, performance strengthened in ~~our Fixed Income suite of products was mixed, as a strong recovery in risk assets followed a dramatic sell-off in March, with 43%~~both active fixed income and active equities. In fixed income, 89% of assets were in outperforming services for the one-year period ended December 31, ~~2020, while our long-term performance remains strong given 62%~~2021, 72% for the three-year period and ~~79%~~70% for the five-year period.~~Our U.S. retail fixed income mutual funds with AUM greater than $1 billion that placed~~ In active equities, 73% of assets were in outperforming services for the ~~top quartile of performance~~one-year period, 48% for the three-year period and 75% for the five-year period ended December 31, 2020 are: AB Intermediate Diversified Muni, AB High Income Municipal, AB Intermediate New York Municipal, AB Intermediate California Municipal and AB Municipal Bond Inflation Strategies. Our Non-U.S. fixed income funds with AUM greater than $1 billion that placed in the top quartile over the same three-year period are: AB American Income, AB European Income and AB Short Duration High Yield (this2021. (This performance data reflects the percentage of active fixed income and equity assets in institutional services that outperformed their benchmark, gross of fees, and ~~percentage~~ 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).

~~In active equity, 41%~~ Additionally, at year-end 2021, 76% of U.S. Fund assets and 59% of Non-U.S. Fund assets were ~~in outperforming services for the one-year period, 61% for the three-year period~~rated 4- or 5-stars by Morningstar.

Several of our retail fixed income and ~~53% for the five-year period ended December 31, 2020. Our U.S. retail~~ equity mutual funds with AUM greater than $1 billion ~~that~~ placed in the top quartile of performance for the three-year period ended December 31, 2020 are: AB Large Cap Growth, AB Discovery Growth, AB Small Cap Growth and AB Sustainable Global Thematic. Our Non-U.S. equity funds with AUM greater than $1 billion that placed in the top quartile over the same period are: AB Global Core Equity, AB International Technology and AB Sustainable Global Thematic (information sourced from Morningstar).2021:



AB U.S. retail fixed income mutual funds that placed in the top quartile (3-yrs): •AB Intermediate Diversified Muni •AB High Income Municipal •AB Intermediate New York Municipal •AB Intermediate California Municipal •AB Municipal Bond Inflation Strategies •AB Municipal Income National •AB Municipal Income California Strategies	AB Non‑U.S. fixed income funds that placed in the top quartile (3-yrs): •AB European Income	AB U.S. retail equity mutual funds that placed in the top quartile (3-yrs): •AB Large Cap Growth •AB Discovery Growth •AB Small Cap Growth •AB Sustainable Global Thematic	AB Non‑U.S. equity funds that placed in the top quartile (3-yrs): •AB International Healthcare •AB International Technology •AB Sustainable Global Thematic

~~Additionally, at year-end 2020, 68%~~


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Table of ~~U.S. Fund assets and 56% of Non-U.S. Fund assets were rated either 4 or 5-stars by Morningstar.~~Contents

Part III

Net Flows

Scaling our proven investment services remains a key focus of our firm. In ~~2020,~~2021, we ~~generated~~accelerated our organic growth, generating an active organic growth rate of ~~1.0%~~4.3%, ~~or 3.0% excluding low-fee AXA redemptions we had been expecting and previously disclosed.~~primarily driven by 10.1% organic growth in active equities. In our Retail channel, record gross sales ~~of $79~~reached $100 billion, ~~increased 5%~~increasing by 27% year-over-year, reflecting strong growth in the U.S. and Japan. This growth primarily resulted from ~~Active Equities,~~active equities, which experienced gross sales of ~~$36~~$59 billion, an increase of $23 billion, or ~~64% greater than the prior year.~~63%, compared to 2020. The retail redemption rate declined to 30% in 2021 from 34% in 2020. As a result, our Retail ~~redemptions increased from 2019 due to the industry-wide sell-off related to the global onset of COVID-19 during the first quarter. Our Retail Active Equity~~active equity products grew organically for a ~~fourth~~fifth consecutive year, generating ~~$5.5~~$21.6 billion in net inflows, or a 7%20% organic growth rate. Retail municipal net inflows increased $5.3 billion in 2021, representing a 23% organic growth rate, helping to offset $8.9 billion of taxable fixed income outflows primarily associated with our offshore global high-income funds. In our Institutional channel, gross sales were ~~$30.8~~$31.7 billion, increasing ~~81%~~3% compared to ~~2019 and representing the firm's highest level of institutional gross sales in 12 years.~~2020. The firm generated institutional active equity flows of ~~$7.2~~$2.4 billion in ~~2020,~~2021, or a ~~16%~~4% organic growth ~~rate.~~rate, for a fourth consecutive year of active equity organic growth. Our pipeline of ~~$12.2~~$21.5 billion in AUM increased by 76% as compared with ~~$15.1~~$12.2 billion a year ~~ago, reflecting strong funding during the fourth quarter of 2020.~~ago. Active Equities and Alternatives represented over ~~80%~~85% of the pipeline fee base at year-end. In Private Wealth, gross sales in ~~2020~~2021 of ~~$14.3~~$18.3 billion increased ~~26% year-over-year, representing our best production since 2007.~~28% year-over-year. And, we continued to expand our use of innovative product offerings, including a diverse set of Alternatives, ESG-related offerings and tax-sensitive vehicles, such as our proprietary SMA Tax Loss Harvesting Portfolio.

Develop 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 ~~2020,~~2021, our Sustainable Investing platform experienced strong growth, with ~~$16.5~~$31.5 billion of AUM at year-end, up ~~60%~~91% year-over-year. InNew fund launches across our global platform included: Sustainable Climate Solutions, Global Disruptors, Global Low Carbon, Concentrated Asia Growth, Global Equity Income, Short Duration Income, Sustainable Income, Sustainable U.S. Thematic, Asia High Yield, Sustainable Emerging Markets Debt and Multi-Asset ~~group, we launched six new funds, including Global Macro, Event and Merger Arbitrage, ESG, China and low-volatility focused products.~~

Income.

Additionally, we continued to successfully develop and raise capital for new Alternatives offerings, which we are offering across our buy-side distribution channels. Launches in ~~2020 included:~~2021 included a ~~new European~~U.S. Commercial Real Estate Private Debt platform, which we are launching with the key support of EQH; our first Collateralized Loan Obligation fund; a Term Asset-Backed Securities Loan Facility offering; and a fund of funds joint venture with Abbott Capital Management, LLC.fund. We also completed

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~~two acquisitions~~ a distribution agreement with LSV Advisors to offer expanded, special situations, secondary investing to our private wealth clients, and we on-boarded 1.5 Degrees, an investment team specializing in ~~2020: Asturias, a~~climate-focused long/short ~~equity manager focused on the technology, telecom and media sector; and AnchorPath, a risk-managed solutions provider.~~

equity.

We remain focused on expanding opportunistically, both inside and outside the U.S., to support long-term growth. We have efforts underway to expand our range of services and capabilities in China, other Asian nations and select European markets.

Lastly, in Bernstein Research ~~we continue to invest~~our investments in Hong Kong and India ~~where investments to date have come to fruition.~~

yielded significant revenue growth in Asia in 2021 as compared with the prior year.

Maintain strong incremental margins:

We remain focused on managing costs to help ensure that we generate ~~strong~~targeted incremental operating ~~margins.~~margins in the range of 45-50%, over time. In ~~2020,~~2021, we ~~continued to make~~made substantial progress on a key pillar of this strategy, which we initially announced in 2018: the relocation of our corporate headquarters from New York, NY, to Nashville, TN. ~~We expect to occupy in~~In 2021, we occupied our newly constructed Nashville headquarters building, which will house approximately 1,250 employees, over time. We continue to seek efficiencies and manage various operating expenses to help ensure that we drive operating leverage on incremental revenues.

~~In 2020, total~~Our incremental adjusted ~~compensation and benefits~~operating margin in 2021 was ~~47.9% of adjusted revenues, flat compared to 2019. Excluding the impact of higher performance-based fees in 2020, compensation costs as a percentage of revenues declined by 0.6% to 47.3%.~~53%, above our targeted range. Our adjusted operating margin increased ~~by 260~~to 33.6% in 2021, up 350 basis points as compared to 30.1% in ~~2020 compared to 27.5% in 2019.~~2020. The increase resulted from ~~a 5%~~an 18% increase in adjusted revenues, driven by higher base fees and higher performance-based fees, and ~~higher Bernstein Research~~a reduction in our adjusted compensation ratio. In 2021, total adjusted compensation and benefits expense was 46.5% of adjusted revenues, ~~partially offset by a 1% increase~~down from 47.9% in ~~adjusted operating expenses compared to 2019.~~2020. We provide additional information regarding our adjusted compensation ratio below in this ~~Compensation Discussion & Analysi~~s,CD&A, and we provide additional information about our adjusted operating margin in Management's Discussion and Analysis of Financial Condition and Results of Operations above in Item 7.


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Our compensation practices are structured to help the firm realize its Growth Strategy

Deliver superior investment solutions to clients

Develop, commercialize

and scale our suite

of services

Launched

9 Products in Private Wealth Channel, including: US Commercial Real Estate Private Debt Fund, Real Estate Equity Plus, Global Disruptors, Relative Value, Sustainable Intermediate Duration and Sustainable US Thematic Strategies

$21.5 billion

Institutional pipeline, with >$60M in annualized fee base

$31.5 billion

ESG Portfolios with Purpose +91% year-over-year

$10 billion

Committed by Equitable Financial to expand AB’s Private Alternative and Private Placement Platforms

Fixed Income and Equity Performance

Maintain strong incremental margins(1)

AB Adjusted Operating Margin

Total Unitholder Return

(2017-2021; includes dividend reinvestment)

Portfolios with Purpose:

New Sustainable launches:

Sustainable Income, Sustainable US Thematic Credit, Sustainable Climate Solutions, Global Low Carbon, Sustainable EM Debt

Overview


Gross Sales	Active Equity	Organic Growth	Beneficial Pipeline Mix
AB’s Retail channel achieved a record of	Active Equity organic growth	Net Flows scaled, generated an active organic growth rate of	Active Equities and Alternatives represented over
$100B	10.1%	4.3%	85%
in gross sales in 2021, +27% year-over-year	in 2021	in 2021	of institutional pipeline fee base at year-end

(1)AB generated incremental adjusted operating margin of 53% in 2021, above the long-term targeted range of 45-50%.


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Overview of ~~2020~~2021 Incentive Compensation Program

When reflecting on ~~2020~~2021 performance and pay, each of our NEOs received a portion of his or her 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 ~~the~~ 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 “~~see “Compensation~~Compensation Elements for ~~NEOs”~~ NEOs” below.) ~~For~~

In 2021, we instituted performance scorecards for senior leaders of the firm, including our NEOs, to shift our executives' priorities from a primarily revenue-based model to a broader leadership mindset. Priorities included in this broader mindset, such as accelerating ESG initiatives, are aligned with firm-wide goals of creating long-term value for all of our stakeholders. The scorecard for each NEO, including Mr. Bernstein, ~~his 2020 incentive compensation award was based generally on the terms set forth in the CEO Employment Agreement (as defined below~~) and review of his performance during 2020 by the Compensation Committee. As part of the Committee's evaluation of Mr. Bernstein's performance, the Committee reviewed AB's financial results and a performance scorecard (the "Scorecard"), which reflected our Growth Strategy and included actual results relative to target metrics across the following measures:

•~~financial goals,~~Financial, 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 US GAAP and our adjusted results);

•~~strategic focus areas,~~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 ~~investment performance, client retention~~organizational effectiveness and ~~demonstrable progress of strategic priorities;~~efficiency, leadership impact, succession planning, developing talent, innovating and automating, and real estate utilization; and

•~~organizational leadership,~~Cultural, including employee engagement, diversity, retention and ~~leadership transitions.~~purpose.

~~In 2021 and future years, we expect to utilize a similar Scorecard in assessing the performance of each of the firm's executives.~~ The recent adoption of this tool has initiated a broad and diverse approach to reward and recognition processes at the firm, beginning with Mr. Bernstein in 2020. The Scorecard serves to shift our executives' priorities from a primarily revenue-based model to a broad leadership mindset. Priorities, including progress compared to ESG measures in the Scorecard,scorecards support management and the ~~needs of clients are paralleled with the expectation of creating long-term value for all of our stakeholders and becoming a guiding example for employees while complementing revenue expectations.~~

~~We do not utilize quantitative formulas or targets when determining the incentive compensation of our NEOs. Instead, we rely on our assessment of~~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.

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(For additional information, ~~Table of Contents~~please see "Compensation Committee; Process for Determining Executive Compensation" below in this CD&A

Additionally, incentive compensation reflects an executive's achievements throughout the year. Amounts are awarded to help us achieve our goal of attracting, motivating and retaining top talent while also helping to ensure that our NEOs' goals are appropriately aligned with the goal of increasing our Unitholders’ return on their investment..)

Mr. Bernstein and Ms. Burke, with the approval of the Compensation Committee, confirmed that the appropriate metric to consider in determining the amount of incentive compensation paid to all employees, including our NEOs, in respect of ~~2020~~2021 performance is the ratio of adjusted employee compensation and benefits expense to adjusted net revenues, which terms are described immediately ~~below:~~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.
•			~~Adjusted net revenues~~ (~~see our discussion of “Management Operating Metrics” in Item 7~~ ~~for a reconciliation between our results pursuant to US 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•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. •Adjusted net revenues (see our discussion of “Management Operating Metrics” in Item 7 for a reconciliation between our results pursuant to US 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 in such funds, that were eliminated in consolidation.

In addition, Mr. Bernstein and Ms. Burke, with the approval of the Compensation Committee, determined that the firm’s adjusted employee compensation and benefits expense generally should not exceed 50.0% of our adjusted net revenues, except in unexpected or unusual circumstances. As the table below indicates, in ~~2020,~~2021, adjusted employee compensation and benefits expense amounted to approximately ~~47.9%~~46.5% of our adjusted net revenues (in thousands):


Net Revenues	$	~~3,708,536~~4,441,602
Adjustments (see above)	~~(659,210)~~(832,066)
Adjusted Net Revenues	$	~~3,049,326~~3,609,536

Employee Compensation & Benefits Expense	$	~~1,494,198~~1,716,013
Adjustments (see above)	~~(34,889)~~(39,011)
Adjusted Employee Compensation & Benefits Expense	$	~~1,459,309~~1,677,002
Adjusted Compensation Ratio	~~47.9~~46.5		%


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Our ~~2020~~2021 adjusted compensation ratio of approximately ~~47.9%~~46.5%% 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.

We have described below each NEO’s individual achievements in 2021 given each officer’s role, the contents of their respective performance scorecards and the firm's business and operational goals:



			Seth P. Bernstein President and Chief Executive Officer Summary of Achievements: As President and CEO, Mr. Bernstein led the firm to achieve strong financial results, highlighted by the firm's record 33.6% adjusted operating margin, which increased by 350 basis points. Investment performance improved under his leadership, and he focused the firm on making progress on strategic priorities, including the growth of our private alternatives business, the advancement of our responsibility goals, and strengthening the partnership with Equitable. Mr. Bernstein navigated the firm through another challenging environment in 2021 with a focus on our employees, bolstering culture, and prioritizing diversity and inclusion initiatives. The culmination of these efforts delivered value for unitholders.			Individual Achievements Financial and Investment Performance: •Led the firm’s efforts in achieving an approximate 18% year-over-year increase in adjusted net revenues, reflecting firm-wide client net inflows of $26.1 billion, or an active organic growth rate of 4.3%. Each of the firm’s three distribution channels grew organically in 2021. Higher revenues coupled with expense management led to an increase in adjusted operating margin of 350 basis points to a record 33.6%. This represented an incremental operating margin of 53%, above the firm’s targeted long-term range of 45-50%. •Earnings per unit (“EPU”) of $3.89 in 2021 grew 34% over 2020. •Led focus on improved investment results; one-year performance improved significantly for both the firm’s active equity and fixed income services in 2021, with long-term performance remaining strong. As of year-end, equity services, as a percentage of assets outperforming applicable benchmarks for the one-, three- and five-year periods achieved 73%, 48% and 75%, respectively, while fixed income services achieved 89%, 72% and 70%, respectively. Strategic Initiatives •Diversified future active product offerings across major asset classes through the launch of new strategies, including Growth Equity, Sustainability, Asia, Income and Emerging Markets. •Drove progress on key strategic growth initiatives to build out our private alternatives franchise, including deployment of capital in our new European Commercial Real Estate Debt strategy and agreement with Equitable Financial to provide up to $10 billion of capital into AB’s higher quality illiquid strategies. •Continued to strengthen overall partnership with Equitable, including working jointly to improve yield on their General Account while seeding new private alternatives strategies. •Advanced responsibility goals by enhancing our own corporate practices, such as establishing a Board oversight framework, integrating ESG metrics into scorecards and increasing the transparency of diversity data. Organizational Strength •Successfully managed through another challenging year, navigating the impacts of the global pandemic. Increased focus on employee well-being and the development of management skills necessary to thrive in a hybrid work environment. •Advanced our headquarters transition to Nashville, hiring and onboarding new staff and completed our state-of-the-art new corporate headquarters. Culture •Maintained strong engagement metrics in AB’s employee survey and supported the firm’s diversity and inclusion (D&I) initiatives, including launching an asset management industry D&I working group, implementing anti-racism training globally and adding two diverse Board members. •Completed a robust process to develop AB's Purpose and refreshed values, which will guide how we act, make decisions and measure ourselves in the eyes of all of our stakeholders.
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			Kate C. Burke Chief Operating Officer and Head of Private Wealth Summary of Achievements: As COO, Ms. Burke implemented performance scorecards, oversaw our return to office worldwide, and drove momentum with a critical set of tasks essential to completing the transition to Nashville and opening our new headquarters. As the Head of Private Wealth ("PW"), Ms. Burke established a leadership team, determined a client segmentation approach and product management structure, and developed a strategy for accelerating organic growth and the investments needed to accomplish this objective.			Individual Achievements Financial •Led the firm’s compensation process. The process resulted in the firm’s compensation ratio declining 140 basis points year-over-year to 46.5%, helping the firm reach its adjusted operating margin of 33.6%. •Accelerated PW's organic growth to 3%, generating net inflows in each quarter of 2021 and five of the last six quarters overall. Strategic •Advanced AB's operating model by increasing transparency and accountability around critical business and financial metrics through implementation of scorecards for business unit heads, quarterly business reviews and the strategic initiative process. These management tools and processes enabled our senior leadership to manage the overall business more holistically and effectively. Under Ms. Burke’s leadership, scorecards for business unit heads were utilized for the first time across AllianceBernstein, enhancing collaboration among senior leaders to support enterprise initiatives around expanding product, distribution, and infrastructure capabilities and advancing AB's talent and cultural initiatives. •Oversaw the evolution of PW’s investment platform with a focus on expanding the lineup of differentiated core strategies, alternatives offerings, and “purpose-driven” (ESG) strategies. Complemented our high-quality active management strategies by introducing a passive tax-loss-harvesting separately managed account and ran the most aggressive product roll-out in PW history: 10 product launches across core and alternative strategies. PW's alternatives AUM grew to $11 billion, up 18% Y/Y. PW's ESG AUM grew to $6.9 billion, up 55.5% Y/Y in 2021. Organizational •Continued to hire, onboard, and train 259 new employees in Nashville, despite ongoing challenges from the pandemic, which resulted in 974 employees in Nashville at year-end, and enabled the firm to maintain its pace to achieve 1,250 employees there by 2024. •Oversaw AB's response to the pandemic and our firm's return-to-office approach, which included marshaling resources across the firm to execute a coordinated global response, enabling the firm to seamlessly meet fiduciary obligations and provide exceptional client service and investment advice, while also prioritizing the health and well-being of AB's 4,085 employees. Culture •Led efforts to reimagine the workplace and ensure the firm’s culture remained intact while evolving into a hybrid work environment. •Fostered stronger AB employee engagement while also delivering concrete actions that resulted in a more diverse workforce, including enhancing AB's diverse talent development and retention efforts.
			2021 Compensation


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			Ali Dibadj CFO and Head of Strategy Summary of Achievements: As CFO, Mr. Dibadj oversaw the delivery of balanced financial targets, communicated our progress internally and externally, and ensured engagement and continuous improvement of a strong Finance function. As Head of Strategy, Mr. Dibadj identified and catalyzed important developments and improvements at AB, led our growth-focused M&A / partnership /seeding advancements, and helped drive our culture firm-wide.			Individual Achievements Financial •Balanced the firm's revenues, expenses and cash through a disciplined process to advance AB's adjusted margin to 33.6% for the year, beat its incremental margin target and increase unitholder distributions by +34% year-over-year. •Led the revamp of our investor and analyst relations with broader outreach, more effective communication, and improved messaging, which contributed to AB's strong total unitholder return. •Improved AB’s financial processes through enhanced accounting, tax, treasury, and financial planning & analysis procedures. Strategic •Executed on commercial synergies with Equitable, leading over a dozen teams across both organizations, including the delivery of an important $10B seed capital commitment from Equitable Financial to AB. •Supported the acceleration of our seed investment program, alongside our firm's Client Group. •Collaborated with business units to deliver on acquisition and partnership goals in responsible investing and alternatives. •Activated change throughout the organization, including catalyzing client segmentation, designing new product development processes and jumpstarting M&A/partnership procedures. Organizational •Revamped the firm's quarterly business review procedures, co-developed with Ms. Burke our performance scorecards, improved our compensation analysis systems and developed our strategic initiatives prioritization process. •Digitized financial information delivery, analysis and dashboards for AB and Strategic Business Units. •Deepened relationships with key external partners, including clients, consultants, investors, analysts and the media, among others. Culture •Sponsored AB’s important efforts on Purpose, Mission and Values (as discussed above in Item 1), alongside our responsibility team. •Engaged in firm-wide Town Halls, small group meetings, and mentorship within each of our business units to communicate our culture, articulate our strategy, champion diversity & inclusion, and support our employees during a challenging pandemic.
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			Karl Sprules Head of Global Technology & Operations Summary of Achievements: As Global Head of Technology & Operations (GTO), Mr. Sprules led the opening of our Nashville office and chaired our Pandemic Response Team. He rigorously managed Technology and Operations expenses and delivered on a broad portfolio of strategic firm initiatives.			Individual Achievements Financial •Managed the Technology & Operations expenses down to less than 11% of revenue. Strategic •Led AB’s Technology, Operations, Security, and Real Estate teams globally and managed the infrastructure expense ratio down to its lowest level in 10 years while supporting business development and growth. Mr. Sprules completed the reorganization and consolidation of the GTO leadership team and advised the Board, other NEOs, and the Operating Committee on the use of technology to gain competitive business advantage. •Continued to increase our operational efficiency by creating programs that drove down error rates, reduced onboarding risk, automated operational work and increased service levels. •Advised other NEOs and the Operating Committee on the technical and operational feasibility of our strategic growth initiatives, and provided staffing, infrastructure and oversight for new initiativesthroughout the year. •Pivoted the focus of our security infrastructure from defense to defense and response, providing thought leadership on security infrastructure architecture, developing maturity models for business unit assessment of response preparedness and reporting to the Board and other NEOs on our security posture. Organizational •Led the team responsible for opening our new corporate headquarters in Nashville. This brought together multidisciplinary teams of thought leaders in design, construction, redundance, security, technology and collaboration to create a state-of-the-art work environment. •Chaired the AB COVID-19 Pandemic Repose Team. This cross-functional leadership team focused on maintaining firm-wide operating efficiency while keeping our employees safe. Mr. Sprules led the response to virus variant surges and advised business unit heads on the impact of extended work from home. Culture •Produced the Nashville Beat, a recurring Town Hall program designed to engage new and tenured Nashville staff as we transitioned to a hybrid work environment. •Co-lead H-Labs, a joint venture between AB and Equitable focused on accelerating innovation and collaboration.
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			Laurence E. Cranch Chief Legal Officer Summary of Achievements: As CLO, Mr. Cranch was responsible for managing the legal and compliance department, overseeing all legal affairs for the firm. Mr. Cranch successfully planned and implemented the transition of the leadership of this department to the firm’s General Counsel, Mark Manley, as a result of his retirement at the end of 2021.			Individual Achievements Financial •Continued to successfully control outside counsel expenses with respect to ongoing and routine legal matters. Strategic •Successfully completed the transition of leadership of the Legal and Compliance Department. •Ensured no regulatory examination resulted in a material adverse finding or enforcement proceeding. •Received favorable feedback from AB business leaders relating to the quality of service of the Legal and Compliance department. •Ensured the firm remained free of material litigation, reflecting our pragmatic and aggressive program to avoid situations that are likely to produce disputes and, where disputes do arise, resolve them on favorable terms. Organizational •Completed the relocation of nearly all of the New York Legal and Compliance department to Nashville, including the retention of the employees who relocated, and the recruitment of qualified individuals to fill remaining senior positions in Nashville. •Implemented compliance solutions in response to new compliance requirements that became effective in 2021. Culture •Stressed the importance of our fiduciary culture through compliance and workplace practices training.
			2021 Compensation

The compensation of each of these NEOs 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.


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Compensation Committee; Process for Determining Executive Compensation

The Compensation Committee consists of Ms. Matus (Chair) and Messrs. ~~Audet, de Oliveira,~~ Kaye, Pearson and Scott. The Compensation Committee held ~~four~~five regular meetings and one special meeting in ~~2020.~~

2021.

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 ~~64.8%~~64.5% economic interest in AB (as of December 31, ~~2020)~~2021), 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., Ms. Matus and Messrs. ~~Audet, de Oliveira,~~ Kaye and Scott). This “Section 16 Sub-Committee” approves awards of restricted AB Holding Units to ~~NEOs.~~

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~~Table~~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 ~~Contents~~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 •			~~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, 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 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 Ms. Burke and other senior executives, provides recommendations for individual executive awards to the Compensation Committee for its consideration. As part of this process, Ms. Burke provides the Committee with compensation benchmarking data from one or more compensation consultants. For ~~2020,~~2021, we paid ~~$48,150~~$95,250 to McLagan Partners (“(~~McLagan~~“McLagan””) for executive compensation benchmarking data and trend forecasting.

Management periodically reviews with the Compensation Committee the firm’s expected adjusted financial and operating results, the firm’s actual 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 ~~2020.~~2021. The Committee also held a special meeting in November 2021. The Compensation Committee ~~then~~ approved the firm's final year-end compensation recommendations during its special meeting held in November 2021 and affirmed its approval in December ~~2020.~~

2021.

The Compensation Committee did not retain its own consultants in ~~2020.~~2021.

Additional information regarding the Compensation Committee’s functions can be found in the Committee's charter, which is available online in the ~~“Corporate Responsibility~~“Responsibility - Corporate Governance” section of our Internet ~~Site~~Site.


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~~Benchmarking Data~~Ali Dibadj

~~In 2020, we engaged McLagan to provide compensation benchmarking data for our NEOs (“2020 Benchmarking Data”). The 2020 Benchmarking Data summarized 2019 compensation levels~~CFO and ~~2020 salaries at selected asset management companies comparable to ours in terms~~Head of ~~size and business mix (“Comparable Companies”), to assist us in determining the appropriate level of compensation for our NEOs.~~Strategy

~~The 2020 Benchmarking Data provided ranges of compensation levels at the Comparable Companies for executive positions like those held by our NEOs, including base salary and total compensation.~~

Compensation Philosophy and Goals

Furthermore, our compensation practices are structured to help the firm realize its long-term growth strategy to Deliver, Diversify and Expand, Responsibly, with Equitable (“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.

•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.

Progress in Advancing our Growth Strategy in 2021

In 2021, the firm’s results demonstrated meaningful progress in executing on our Growth Strategy. Below are key metrics related to the three pillars of the Growth Strategy:

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~~The Comparable Companies, which management selected with input from McLagan, included:~~


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Deliver superior investment solutions to our clients:

Investment Performance

Several of our retail fixed income and equity mutual funds with AUM greater than $1 billion placed in the top quartile of performance for the three-year period ended December 31, 2021:



AB U.S. retail fixed income mutual funds that placed in the top quartile (3-yrs): •AB Intermediate Diversified Muni •AB High Income Municipal •AB Intermediate New York Municipal •AB Intermediate California Municipal •AB Municipal Bond Inflation Strategies •AB Municipal Income National •AB Municipal Income California Strategies	AB Non‑U.S. fixed income funds that placed in the top quartile (3-yrs): •AB European Income	AB U.S. retail equity mutual funds that placed in the top quartile (3-yrs): •AB Large Cap Growth •AB Discovery Growth •AB Small Cap Growth •AB Sustainable Global Thematic	AB Non‑U.S. equity funds that placed in the top quartile (3-yrs): •AB International Healthcare •AB International Technology •AB Sustainable Global Thematic

~~Eaton Vance Corp.~~	~~Franklin Templeton Investments~~	~~Goldman Sachs Asset Management~~
~~Invesco Ltd.~~	~~JP Morgan Asset Management~~	~~Legg Mason, Inc.~~
~~MFS Investment Management~~	~~Morgan Stanley Investment Management~~	~~Neuberger Berman LLC~~
~~Nuveen Investments / TIAA~~	~~PIMCO LLC~~	~~Prudential Investments~~
~~T. Rowe Price, Inc.~~	~~The Vanguard Group, Inc.~~

~~The 2020 Benchmarking Data indicated that the total compensation paid to each of our NEOs in 2020 fell within or below the ranges of total compensation paid to executives at the Comparable Companies.~~

~~The Compensation Committee considered this information in concluding that the compensation levels paid in 2020 to our NEOs were appropriate and reasonable.~~

~~Other Factors Considered When Determining NEO Compensation~~

For 2020, Mr. Bernstein and Ms. Burke, and the Compensation Committee, based decisions about the incentive compensation of our NEOs primarily on an assessment of each executive’s leadership, operational performance and potential to enhance investment returns and service for clients, all of which contribute to long-term Unitholder value. Quantitative formulas are not utilized when determining the incentive compensation of our NEOs. Instead, Mr. Bernstein and Ms. Burke, and the Compensation Committee, rely on judgment about each executive’s performance in light of business and operational goals established at the beginning of the year and reviewed in the context of the current-year financial performance of the firm and the firm's progress in advancing its Growth Strategy. Mr. Bernstein and Ms. Burke begin the award determination process, working with other members of senior management, by determining the total incentive compensation amounts available for a particular year (~~as more fully explained above in “Overview of 2020 Incentive Compensation Program”~~).

Mr. Bernstein and Ms. Burke, and the Compensation Committee, then consider many key factors for each of the NEOs. Specific factors will vary among business units, among individuals and during different business cycles, so we do not adopt any specific weighting or formula under which these metrics are applied. Key factors are:


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Net Flows

Scaling our proven investment services remains a key focus of our firm. In 2021, we accelerated our organic growth, generating an active organic growth rate of 4.3%, primarily driven by 10.1% organic growth in active equities. In our Retail channel, record gross sales reached $100 billion, increasing by 27% year-over-year, reflecting strong growth in the U.S. and Japan. This growth primarily resulted from active equities, which experienced gross sales of $59 billion, an increase of $23 billion, or 63%, compared to 2020. The retail redemption rate declined to 30% in 2021 from 34% in 2020. As a result, our Retail active equity products grew organically for a fifth consecutive year, generating $21.6 billion in net inflows, or a 20% organic growth rate. Retail municipal net inflows increased $5.3 billion in 2021, representing a 23% organic growth rate, helping to offset $8.9 billion of taxable fixed income outflows primarily associated with our offshore global high-income funds. In our Institutional channel, gross sales were $31.7 billion, increasing 3% compared to 2020. The firm generated institutional active equity flows of $2.4 billion in 2021, or a 4% organic growth rate, for a fourth consecutive year of active equity organic growth. Our pipeline of $21.5 billion in AUM increased by 76% as compared with $12.2 billion a year ago. Active Equities and Alternatives represented over 85% of the pipeline fee base at year-end. In Private Wealth, gross sales in 2021 of $18.3 billion increased 28% year-over-year. And, we continued to expand our use of innovative product offerings, including a diverse set of Alternatives, ESG-related offerings and tax-sensitive vehicles, such as our proprietary SMA Tax Loss Harvesting Portfolio.

Develop 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 2021, our Sustainable Investing platform experienced strong growth, with $31.5 billion of AUM at year-end, up 91% year-over-year. New fund launches across our global platform included: Sustainable Climate Solutions, Global Disruptors, Global Low Carbon, Concentrated Asia Growth, Global Equity Income, Short Duration Income, Sustainable Income, Sustainable U.S. Thematic, Asia High Yield, Sustainable Emerging Markets Debt and Multi-Asset Income.

Additionally, we continued to successfully develop and raise capital for new Alternatives offerings, which we are offering across our buy-side distribution channels. Launches in 2021 included a U.S. Commercial Real Estate Private Debt fund. We also completed a distribution agreement with LSV Advisors to offer expanded, special situations, secondary investing to our private wealth clients, and we on-boarded 1.5 Degrees, an investment team specializing in climate-focused long/short equity.

Lastly, in Bernstein Research our investments in Hong Kong and India yielded significant revenue growth in Asia in 2021 as compared with the prior year.

Maintain strong incremental margins:

We remain focused on managing costs to help ensure that we generate targeted incremental operating margins in the range of 45-50%, over time. In 2021, we made substantial progress on a key pillar of this strategy, which we initially announced in 2018: the relocation of our corporate headquarters from New York, NY, to Nashville, TN. In 2021, we occupied our newly constructed Nashville headquarters building, which will house approximately 1,250 employees, over time. We continue to seek efficiencies and manage various operating expenses to help ensure that we drive operating leverage on incremental revenues.

Our incremental adjusted operating margin in 2021 was 53%, above our targeted range. Our adjusted operating margin increased to 33.6% in 2021, up 350 basis points as compared to 30.1% in 2020. The increase resulted from an 18% increase in adjusted revenues, driven by higher base fees and higher performance-based fees, and a reduction in our adjusted compensation ratio. In 2021, total adjusted compensation and benefits expense was 46.5% of adjusted revenues, down from 47.9% in 2020. We provide additional information regarding our adjusted compensation ratio below in this CD&A, and we provide additional information about our adjusted operating margin in Management's Discussion and Analysis of Financial Condition and Results of Operations above in Item 7.


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Our compensation practices are structured to help the firm realize its Growth Strategy

Deliver superior investment solutions to clients

Develop, commercialize

and scale our suite

of services

Launched

$21.5 billion

Institutional pipeline, with >$60M in annualized fee base

$31.5 billion

ESG Portfolios with Purpose +91% year-over-year

$10 billion

Committed by Equitable Financial to expand AB’s Private Alternative and Private Placement Platforms

Fixed Income and Equity Performance

Maintain strong incremental margins(1)

AB Adjusted Operating Margin

Total Unitholder Return

(2017-2021; includes dividend reinvestment)

Portfolios with Purpose:

New Sustainable launches:

Sustainable Income, Sustainable US Thematic Credit, Sustainable Climate Solutions, Global Low Carbon, Sustainable EM Debt

•

~~the firm’s financial performance in the current year and the executive's contribution to such financial performance;~~

Overview


Gross Sales	Active Equity	Organic Growth	Beneficial Pipeline Mix
AB’s Retail channel achieved a record of	Active Equity organic growth	Net Flows scaled, generated an active organic growth rate of	Active Equities and Alternatives represented over
$100B	10.1%	4.3%	85%
in gross sales in 2021, +27% year-over-year	in 2021	in 2021	of institutional pipeline fee base at year-end

(1)AB generated incremental adjusted operating margin of 53% in 2021, above the long-term targeted range of 45-50%.


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•			~~the firm's progress in advancing its Growth Strategy;~~

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Overview of 2021 Incentive Compensation Program

When reflecting on 2021 performance and pay, each of our NEOs received a portion of his or her 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.)

•Financial, 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 US GAAP and our adjusted results);

•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 employee engagement, diversity, retention and purpose.

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 and Ms. Burke, with the approval of the Compensation Committee, confirmed that the appropriate metric to consider in determining the amount of incentive compensation paid to all employees, including our NEOs, in respect of 2021 performance is the ratio of adjusted employee compensation and benefits expense to adjusted net revenues, which terms are described immediately 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.

•Adjusted net revenues (see our discussion of “Management Operating Metrics” in Item 7 for a reconciliation between our results pursuant to US 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 in such funds, that were eliminated in consolidation.

In addition, Mr. Bernstein and Ms. Burke, with the approval of the Compensation Committee, determined that the firm’s adjusted employee compensation and benefits expense generally should not exceed 50.0% of our adjusted net revenues, except in unexpected or unusual circumstances. As the table below indicates, in 2021, adjusted employee compensation and benefits expense amounted to approximately 46.5% of our adjusted net revenues (in thousands):


Net Revenues	$	4,441,602
Adjustments (see above)	(832,066)
Adjusted Net Revenues	$	3,609,536
Employee Compensation & Benefits Expense	$	1,716,013
Adjustments (see above)	(39,011)
Adjusted Employee Compensation & Benefits Expense	$	1,677,002
Adjusted Compensation Ratio	46.5		%
•	~~the NEO's performance compared to individual business and operational goals established at the beginning of the year;~~
•	~~total compensation awarded to the NEO in the prior year;~~
•	~~the increase or decrease in the current year’s total incentive compensation amounts available;~~
•	~~the nature, scope and level of responsibilities of the NEO;~~
•	~~the NEO’s execution of our firm’s culture of Relentless Ingenuity; and~~
•	~~the NEO’s management effectiveness, talent development, focus on diversity and inclusion initiatives, and adherence to risk management and regulatory compliance.~~

~~Mr. Bernstein and Ms. Burke then provided specific incentive compensation recommendations to the Compensation Committee, which recommendations were supported by the factors~~ ~~listed above,~~ ~~each NEO's individual achievements,~~ ~~as listed below~~ and, for Mr. Bernstein, a summary of his performance compared with metrics included in the Scorecard. They also provided the Compensation Committee with the 2020 Benchmarking Data, which was not used in a formulaic or mechanical way to determine NEO compensation levels, but rather, ~~as noted above~~, provided the Compensation Committee with a reference point for the compensation levels paid to executives at the Comparable Companies. The Compensation Committee then made the final incentive compensation decisions for each NEO.

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~~We have~~ 2021 Annual Report~~described below~~ ~~each NEO’s individual achievements in 2020~~			129

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Our 2021 adjusted compensation ratio of approximately 46.5%% 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.



			Seth P. Bernstein ~~Role~~ •~~Leadership, responsibility and performance as~~ President and ~~CEO.~~Chief Executive Officer Summary of Achievements: As President and CEO, Mr. Bernstein led the firm to achieve strong financial results, highlighted by the firm's record 33.6% adjusted operating margin, which increased by 350 basis points. Investment performance improved under his leadership, and he focused the firm on making progress on strategic priorities, including the growth of our private alternatives business, the advancement of our responsibility goals, and strengthening the partnership with Equitable. Mr. Bernstein navigated the firm through another challenging environment in 2021 with a focus on our employees, bolstering culture, and prioritizing diversity and inclusion initiatives. The culmination of these efforts delivered value for unitholders.			Individual Achievements Financial and Investment Performance: •Led the firm’s efforts in achieving an approximate 5%18% year-over-year increase in adjusted net revenues, reflecting firm-wide client net inflows of ~~$9.2~~$26.1 billion, ~~excluding AXA's redemption of low-fee fixed income mandates, resulting in~~or an active organic growth rate of ~~3.0%; higher~~4.3%. Each of the firm’s three distribution channels grew organically in 2021. Higher revenues ~~and lower non-compensation related expenses, in part due to COVID-19 pandemic-related travel restrictions,~~coupled with expense management led to an increase in adjusted operating margin of ~~260~~350 basis points to ~~30.1%~~a record 33.6%. This represented an incremental operating margin of 53%, above the firm’s targeted long-term range of 45-50%. •~~Successfully managed the firm through an unprecedented year via the strength~~Earnings per unit (“EPU”) of ~~our leadership team and technology platform, which enabled us to transition working remotely seamlessly, allowing us to support our people and clients.~~ $3.89 in 2021 grew 34% over 2020. •Led ~~the continued~~ focus on improved investment results; ~~while challenged~~one-year performance improved significantly for both the firm’s active equity and fixed income services in ~~the short term, longer term investment~~2021, with long-term performance ~~remains competitive.~~remaining strong. As of ~~December 31, 2020, fixed income~~year-end, equity services, as a percentage of assets outperforming applicable benchmarks for the one-, three- and five-year periods achieved ~~43%~~73%, ~~62%~~48% and ~~79%~~75%, respectively, while ~~equities~~fixed income services achieved ~~41%~~89%, ~~61%~~72% and ~~53%~~70%, respectively. Strategic Initiatives •Diversified future active product offerings across major asset classes through the launch of new strategies, including Growth Equity, Sustainability, Asia, Income and Emerging Markets. •Drove ~~meaningful~~ progress on key strategic growth initiatives to build out our private alternatives franchise, including ~~build-out~~deployment of capital in our ~~operation in China~~new European Commercial Real Estate Debt strategy and ~~our responsible investment platform, enhancing collaboration~~agreement with ~~EQH and establishing a comprehensive inorganic growth strategy: AB added four new businesses in 2020.~~ Equitable Financial to provide up to $10 billion of capital into AB’s higher quality illiquid strategies. •~~Improved~~Continued to strengthen overall partnership with Equitable, including working jointly to improve yield on their General Account while seeding new private alternatives strategies. •Advanced responsibility goals by enhancing our own corporate practices, such as establishing a Board oversight framework, integrating ESG metrics into scorecards and increasing the transparency of diversity data. Organizational Strength •Successfully managed through another challenging year, navigating the impacts of the global pandemic. Increased focus on employee well-being and the development of management skills necessary to thrive in a hybrid work environment. •Advanced our headquarters transition to Nashville, hiring and onboarding new staff and completed our state-of-the-art new corporate headquarters. Culture •Maintained strong engagement metrics in AB’s employee survey and supported the firm’s diversity and inclusion (D&I) initiatives, including ~~adding diverse perspectives to the firm's Operating Committee~~launching an asset management industry D&I working group, implementing anti-racism training globally and adding two diverse Board members. •~~Conducted meetings globally with current~~Completed a robust process to develop AB's Purpose and ~~prospective clients to deepen AB’s relationships~~refreshed values, which will guide how we act, make decisions and ~~appreciation~~measure ourselves in the eyes of ~~evolving client priorities.~~all of our stakeholders.
			2021 Compensation

			•~~Made significant progress in transition of the firm's senior leadership team.~~


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•~~Advanced our firm's headquarters transition to Nashville, with the relocation and hiring of new staff and the continued construction of our new, state-of-the-art corporate headquarters.~~



			Kate C. Burke ~~Role~~Chief Operating Officer and Head of Private Wealth •Summary of Achievements: ~~Leadership, responsibility~~As COO, Ms. Burke implemented performance scorecards, oversaw our return to office worldwide, and ~~performance as COO.~~drove momentum with a critical set of tasks essential to completing the transition to Nashville and opening our new headquarters. As the Head of Private Wealth ("PW"), Ms. Burke established a leadership team, determined a client segmentation approach and product management structure, and developed a strategy for accelerating organic growth and the investments needed to accomplish this objective.			Individual Achievements Financial •Led ~~AB's response~~the firm’s compensation process. The process resulted in the firm’s compensation ratio declining 140 basis points year-over-year to the COVID-19 pandemic by establishing and quickly mobilizing the firm's Pandemic Response Team, which consists of Technology, Operations, Administrative Services, Human Capital, Risk Management, Security and Corporate Communications, to execute a coordinated global response that enabled46.5%, helping the firm ~~to seamlessly provide exceptional client service and investment advice, meet fiduciary obligations and prioritize the health and safety~~reach its adjusted operating margin of ~~AB's 3,929 employees as the firm adjusted to working remotely.~~ 33.6%. •~~Advanced AB's headquarters transition~~Accelerated PW's organic growth to ~~Nashville, resulting~~3%, generating net inflows in ~~789 employees on the ground as~~each quarter of ~~December 31, 2020; despite the challenges presented by remote working, the firm continued to hire, onboard~~2021 and train 166 new employees in Nashville in 2020, maintaining the firm's pace to achieve 1,250 employees by 2024. Also, created various engagement strategies to advance AB's culture, community and philanthropic activities in Nashville. ~~129~~ ~~Table of Contents~~ •Led firm-wide cost savings initiatives to drive greater efficiency and automation, managed compensation and headcount, and captured additional savings to improve AB's adjusted operating margin by 260 basis points to 30.1%. •Reviewed existing and new business initiatives and aligned resources to invest in organic and inorganic growth opportunities, including the build-out of our operation in China, our responsible investment platform, our private wealth capabilities, and our public and private alternatives platforms. •Championed our firm's diversity and inclusion efforts through a period of civil unrest around racial inequity, supported AB's employees and provided opportunities to share and learn together while also delivering concrete actions resulting in increased diverse representation on the Board and the firm's Operating Committee, and added resources to support the development and retention of AB's diverse talent. •Supported Mr. Bernstein in the succession planning of critical leadership roles, including the planned retirement of Mr. Weisenseel and the Head of AB's Client Group, and the successful selection and transition of new leaders onto the firm's executive team. •~~Completed transition to the role of COO in July 2020 and worked closely with Mr. Weisenseel throughout 2020 to transition administrative services to the office~~five of the ~~COO by February 2021.~~last six quarters overall. Strategic •Advanced AB's operating model ~~to increase~~by increasing transparency and accountability around ~~key~~critical business and financial metrics ~~enhanced~~through implementation of scorecards for business unit heads, quarterly business reviews and the strategic initiative process. These management tools and processes enabled our senior leadership to manage the overall business more holistically and effectively. Under Ms. Burke’s leadership, scorecards for business unit heads were utilized for the first time across AllianceBernstein, enhancing collaboration ~~within the firm's Operating Committee~~among senior leaders to support enterprise initiatives around expanding product, distribution, and infrastructure capabilities and ~~supported~~advancing AB's talent and cultural initiatives. •Oversaw the evolution of PW’s investment platform with a focus on expanding the lineup of differentiated core strategies, alternatives offerings, and “purpose-driven” (ESG) strategies. Complemented our high-quality active management strategies by introducing a passive tax-loss-harvesting separately managed account and ran the most aggressive product roll-out in PW history: 10 product launches across core and alternative strategies. PW's alternatives AUM grew to $11 billion, up 18% Y/Y. PW's ESG AUM grew to $6.9 billion, up 55.5% Y/Y in 2021. Organizational •Continued to hire, onboard, and train 259 new employees in Nashville, despite ongoing challenges from the pandemic, which resulted in 974 employees in Nashville at year-end, and enabled the firm to maintain its pace to achieve 1,250 employees there by 2024. •Oversaw AB's response to the pandemic and our firm's return-to-office approach, which included marshaling resources across the firm to execute a coordinated global response, enabling the firm to seamlessly meet fiduciary obligations and provide exceptional client service and investment advice, while also prioritizing the health and well-being of AB's 4,085 employees. Culture •Led efforts to reimagine the workplace and ensure the firm’s culture remained intact while evolving into a hybrid work environment. •Fostered stronger AB employee engagement while also delivering concrete actions that resulted in a more diverse workforce, including enhancing AB's diverse talent development and retention efforts.
			2021 Compensation


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			Ali Dibadj CFO and Head of Strategy Summary of Achievements: As CFO, Mr. Dibadj oversaw the delivery of balanced financial targets, communicated our progress internally and externally, and ensured engagement and continuous improvement of a strong Finance function. As Head of Strategy, Mr. Dibadj identified and catalyzed important developments and improvements at AB, led our growth-focused M&A / partnership /seeding advancements, and helped drive our culture firm-wide.			Individual Achievements Financial •Balanced the firm's revenues, expenses and cash through a disciplined process to advance AB's adjusted margin to 33.6% for the year, beat its incremental margin target and increase unitholder distributions by +34% year-over-year. •Led the revamp of our investor and analyst relations with broader outreach, more effective communication, and improved messaging, which contributed to AB's strong total unitholder return. •Improved AB’s financial processes through enhanced accounting, tax, treasury, and financial planning & analysis procedures. Strategic •Executed on commercial synergies with Equitable, leading over a dozen teams across both organizations, including the delivery of an important $10B seed capital commitment from Equitable Financial to AB. •Supported the acceleration of our seed investment program, alongside our firm's Client Group. •Collaborated with business units to deliver on acquisition and partnership goals in responsible investing and alternatives. •Activated change throughout the organization, including catalyzing client segmentation, designing new product development processes and jumpstarting M&A/partnership procedures. Organizational •Revamped the firm's quarterly business review procedures, co-developed with Ms. Burke our performance scorecards, improved our compensation analysis systems and developed our strategic initiatives prioritization process. •Digitized financial information delivery, analysis and dashboards for AB and Strategic Business Units. •Deepened relationships with key external partners, including clients, consultants, investors, analysts and the media, among others. Culture •Sponsored AB’s important efforts on Purpose, Mission and Values (as discussed above in Item 1), alongside our responsibility team. •Engaged in firm-wide Town Halls, small group meetings, and mentorship within each of our business units to communicate our culture, articulate our strategy, champion diversity & inclusion, and support our employees during a challenging pandemic.
			2021 Compensation


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			Karl Sprules Head of Global Technology & Operations Summary of Achievements: As Global Head of Technology & Operations (GTO), Mr. Sprules led the opening of our Nashville office and chaired our Pandemic Response Team. He rigorously managed Technology and Operations expenses and delivered on a broad portfolio of strategic firm initiatives.			Individual Achievements Financial •Managed the Technology & Operations expenses down to less than 11% of revenue. Strategic •Led AB’s Technology, Operations, Security, and Real Estate teams globally and managed the infrastructure expense ratio down to its lowest level in 10 years while supporting business development and growth. Mr. Sprules completed the reorganization and consolidation of the GTO leadership team and advised the Board, other NEOs, and the Operating Committee on the use of technology to gain competitive business advantage. •Continued to increase our operational efficiency by creating programs that drove down error rates, reduced onboarding risk, automated operational work and increased service levels. •Advised other NEOs and the Operating Committee on the technical and operational feasibility of our strategic growth initiatives, and provided staffing, infrastructure and oversight for new initiativesthroughout the year. •Pivoted the focus of our security infrastructure from defense to defense and response, providing thought leadership on security infrastructure architecture, developing maturity models for business unit assessment of response preparedness and reporting to the Board and other NEOs on our security posture. Organizational •Led the team responsible for opening our new corporate headquarters in Nashville. This brought together multidisciplinary teams of thought leaders in design, construction, redundance, security, technology and collaboration to create a state-of-the-art work environment. •Chaired the AB COVID-19 Pandemic Repose Team. This cross-functional leadership team focused on maintaining firm-wide operating efficiency while keeping our employees safe. Mr. Sprules led the response to virus variant surges and advised business unit heads on the impact of extended work from home. Culture •Produced the Nashville Beat, a recurring Town Hall program designed to engage new and tenured Nashville staff as we transitioned to a hybrid work environment. •Co-lead H-Labs, a joint venture between AB and Equitable focused on accelerating innovation and collaboration.
			2021 Compensation


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			Laurence E. Cranch Chief Legal Officer Summary of Achievements: As CLO, Mr. Cranch was responsible for managing the legal and compliance department, overseeing all legal affairs for the firm. Mr. Cranch successfully planned and implemented the transition of the leadership of this department to the firm’s General Counsel, Mark Manley, as a result of his retirement at the end of 2021.			Individual Achievements Financial •Continued to successfully control outside counsel expenses with respect to ongoing and routine legal matters. Strategic •Successfully completed the transition of leadership of the Legal and Compliance Department. •Ensured no regulatory examination resulted in a material adverse finding or enforcement proceeding. •Received favorable feedback from AB business leaders relating to the quality of service of the Legal and Compliance department. •Ensured the firm remained free of material litigation, reflecting our pragmatic and aggressive program to avoid situations that are likely to produce disputes and, where disputes do arise, resolve them on favorable terms. Organizational •Completed the relocation of nearly all of the New York Legal and Compliance department to Nashville, including the retention of the employees who relocated, and the recruitment of qualified individuals to fill remaining senior positions in Nashville. •Implemented compliance solutions in response to new compliance requirements that became effective in 2021. Culture •Stressed the importance of our fiduciary culture through compliance and workplace practices training.
			2021 Compensation


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Compensation Committee; Process for Determining Executive Compensation

The Compensation Committee consists of Ms. Matus (Chair) and Messrs. Kaye, Pearson and Scott. The Compensation Committee held five regular meetings and one special meeting in 2021.

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 64.5% economic interest in AB (as of December 31, 2021), 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., Ms. Matus and Messrs. Kaye and Scott). 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, 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 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 Ms. Burke and other senior executives, provides recommendations for individual executive awards to the Compensation Committee for its consideration. As part of this process, Ms. Burke provides the Committee with compensation benchmarking data from one or more compensation consultants. For 2021, we paid $95,250 to McLagan Partners (“McLagan”) for executive compensation benchmarking data and trend forecasting.

Management periodically reviews with the Compensation Committee the firm’s expected adjusted financial and operating results, the firm’s actual 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 2021. The Committee also held a special meeting in November 2021. The Compensation Committee approved the firm's final year-end compensation recommendations during its special meeting held in November 2021 and affirmed its approval in December 2021.

The Compensation Committee did not retain its own consultants in 2021.

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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Ali Dibadj

~~Role~~

•~~Leadership, responsibility and performance as Head of Finance and Strategy, including ensuring a seamless transition to the role of~~ CFO and Head of ~~Strategy.~~Strategy

Compensation Philosophy and Goals

Furthermore, our compensation practices are structured to help the firm realize its long-term growth strategy to Deliver, Diversify and Expand, Responsibly, with Equitable (“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.

•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.

Progress in Advancing our Growth Strategy in 2021

In 2021, the firm’s results demonstrated meaningful progress in executing on our Growth Strategy. Below are key metrics related to the three pillars of the Growth Strategy:


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Deliver superior investment solutions to our clients:

Investment Performance

Several of our retail fixed income and equity mutual funds with AUM greater than $1 billion placed in the top quartile of performance for the three-year period ended December 31, 2021:



AB U.S. retail fixed income mutual funds that placed in the top quartile (3-yrs): •AB Intermediate Diversified Muni •AB High Income Municipal •AB Intermediate New York Municipal •AB Intermediate California Municipal •AB Municipal Bond Inflation Strategies •AB Municipal Income National •AB Municipal Income California Strategies	AB Non‑U.S. fixed income funds that placed in the top quartile (3-yrs): •AB European Income	AB U.S. retail equity mutual funds that placed in the top quartile (3-yrs): •AB Large Cap Growth •AB Discovery Growth •AB Small Cap Growth •AB Sustainable Global Thematic	AB Non‑U.S. equity funds that placed in the top quartile (3-yrs): •AB International Healthcare •AB International Technology •AB Sustainable Global Thematic


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Net Flows

Develop high-quality differentiated services:

Additionally, we continued to successfully develop and raise capital for new Alternatives offerings, which we are offering across our buy-side distribution channels. Launches in 2021 included a U.S. Commercial Real Estate Private Debt fund. We also completed a distribution agreement with LSV Advisors to offer expanded, special situations, secondary investing to our private wealth clients, and we on-boarded 1.5 Degrees, an investment team specializing in climate-focused long/short equity.

Lastly, in Bernstein Research our investments in Hong Kong and India yielded significant revenue growth in Asia in 2021 as compared with the prior year.

Maintain strong incremental margins:


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Our compensation practices are structured to help the firm realize its Growth Strategy

Deliver superior investment solutions to clients

Develop, commercialize

and scale our suite

of services

Launched

$21.5 billion

Institutional pipeline, with >$60M in annualized fee base

$31.5 billion

ESG Portfolios with Purpose +91% year-over-year

$10 billion

Committed by Equitable Financial to expand AB’s Private Alternative and Private Placement Platforms

Fixed Income and Equity Performance

Maintain strong incremental margins(1)

AB Adjusted Operating Margin

Total Unitholder Return

(2017-2021; includes dividend reinvestment)

Portfolios with Purpose:

New Sustainable launches:

Sustainable Income, Sustainable US Thematic Credit, Sustainable Climate Solutions, Global Low Carbon, Sustainable EM Debt

Overview


Gross Sales	Active Equity	Organic Growth	Beneficial Pipeline Mix
AB’s Retail channel achieved a record of	Active Equity organic growth	Net Flows scaled, generated an active organic growth rate of	Active Equities and Alternatives represented over
$100B	10.1%	4.3%	85%
in gross sales in 2021, +27% year-over-year	in 2021	in 2021	of institutional pipeline fee base at year-end

(1)AB generated incremental adjusted operating margin of 53% in 2021, above the long-term targeted range of 45-50%.


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Overview of 2021 Incentive Compensation Program

•Organizational, including organizational effectiveness and efficiency, leadership impact, succession planning, developing talent, innovating and automating, and real estate utilization; and

•Cultural, including employee engagement, diversity, retention and purpose.

Mr. Bernstein and Ms. Burke, with the approval of the Compensation Committee, confirmed that the appropriate metric to consider in determining the amount of incentive compensation paid to all employees, including our NEOs, in respect of 2021 performance is the ratio of adjusted employee compensation and benefits expense to adjusted net revenues, which terms are described immediately below:

In addition, Mr. Bernstein and Ms. Burke, with the approval of the Compensation Committee, determined that the firm’s adjusted employee compensation and benefits expense generally should not exceed 50.0% of our adjusted net revenues, except in unexpected or unusual circumstances. As the table below indicates, in 2021, adjusted employee compensation and benefits expense amounted to approximately 46.5% of our adjusted net revenues (in thousands):


Net Revenues	$	4,441,602
Adjustments (see above)	(832,066)
Adjusted Net Revenues	$	3,609,536
Employee Compensation & Benefits Expense	$	1,716,013
Adjustments (see above)	(39,011)
Adjusted Employee Compensation & Benefits Expense	$	1,677,002
Adjusted Compensation Ratio	46.5		%


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			Seth P. Bernstein President and Chief Executive Officer Summary of Achievements: As President and CEO, Mr. Bernstein led the firm to achieve strong financial results, highlighted by the firm's record 33.6% adjusted operating margin, which increased by 350 basis points. Investment performance improved under his leadership, and he focused the firm on making progress on strategic priorities, including the growth of our private alternatives business, the advancement of our responsibility goals, and strengthening the partnership with Equitable. Mr. Bernstein navigated the firm through another challenging environment in 2021 with a focus on our employees, bolstering culture, and prioritizing diversity and inclusion initiatives. The culmination of these efforts delivered value for unitholders.			Individual Achievements Financial and Investment Performance: •Led the firm’s efforts in achieving an approximate 18% year-over-year increase in adjusted net revenues, reflecting firm-wide client net inflows of $26.1 billion, or an active organic growth rate of 4.3%. Each of the firm’s three distribution channels grew organically in 2021. Higher revenues coupled with expense management led to an increase in adjusted operating margin of 350 basis points to a record 33.6%. This represented an incremental operating margin of 53%, above the firm’s targeted long-term range of 45-50%. •Earnings per unit (“EPU”) of $3.89 in 2021 grew 34% over 2020. •Led focus on improved investment results; one-year performance improved significantly for both the firm’s active equity and fixed income services in 2021, with long-term performance remaining strong. As of year-end, equity services, as a percentage of assets outperforming applicable benchmarks for the one-, three- and five-year periods achieved 73%, 48% and 75%, respectively, while fixed income services achieved 89%, 72% and 70%, respectively. Strategic Initiatives •Diversified future active product offerings across major asset classes through the launch of new strategies, including Growth Equity, Sustainability, Asia, Income and Emerging Markets. •Drove progress on key strategic growth initiatives to build out our private alternatives franchise, including deployment of capital in our new European Commercial Real Estate Debt strategy and agreement with Equitable Financial to provide up to $10 billion of capital into AB’s higher quality illiquid strategies. •Continued to strengthen overall partnership with Equitable, including working jointly to improve yield on their General Account while seeding new private alternatives strategies. •Advanced responsibility goals by enhancing our own corporate practices, such as establishing a Board oversight framework, integrating ESG metrics into scorecards and increasing the transparency of diversity data. Organizational Strength •Successfully managed through another challenging year, navigating the impacts of the global pandemic. Increased focus on employee well-being and the development of management skills necessary to thrive in a hybrid work environment. •Advanced our headquarters transition to Nashville, hiring and onboarding new staff and completed our state-of-the-art new corporate headquarters. Culture •Maintained strong engagement metrics in AB’s employee survey and supported the firm’s diversity and inclusion (D&I) initiatives, including launching an asset management industry D&I working group, implementing anti-racism training globally and adding two diverse Board members. •Completed a robust process to develop AB's Purpose and refreshed values, which will guide how we act, make decisions and measure ourselves in the eyes of all of our stakeholders.
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			Kate C. Burke Chief Operating Officer and Head of Private Wealth Summary of Achievements: As COO, Ms. Burke implemented performance scorecards, oversaw our return to office worldwide, and drove momentum with a critical set of tasks essential to completing the transition to Nashville and opening our new headquarters. As the Head of Private Wealth ("PW"), Ms. Burke established a leadership team, determined a client segmentation approach and product management structure, and developed a strategy for accelerating organic growth and the investments needed to accomplish this objective.			Individual Achievements Financial •Led the firm’s compensation process. The process resulted in the firm’s compensation ratio declining 140 basis points year-over-year to 46.5%, helping the firm reach its adjusted operating margin of 33.6%. •Accelerated PW's organic growth to 3%, generating net inflows in each quarter of 2021 and five of the last six quarters overall. Strategic •Advanced AB's operating model by increasing transparency and accountability around critical business and financial metrics through implementation of scorecards for business unit heads, quarterly business reviews and the strategic initiative process. These management tools and processes enabled our senior leadership to manage the overall business more holistically and effectively. Under Ms. Burke’s leadership, scorecards for business unit heads were utilized for the first time across AllianceBernstein, enhancing collaboration among senior leaders to support enterprise initiatives around expanding product, distribution, and infrastructure capabilities and advancing AB's talent and cultural initiatives. •Oversaw the evolution of PW’s investment platform with a focus on expanding the lineup of differentiated core strategies, alternatives offerings, and “purpose-driven” (ESG) strategies. Complemented our high-quality active management strategies by introducing a passive tax-loss-harvesting separately managed account and ran the most aggressive product roll-out in PW history: 10 product launches across core and alternative strategies. PW's alternatives AUM grew to $11 billion, up 18% Y/Y. PW's ESG AUM grew to $6.9 billion, up 55.5% Y/Y in 2021. Organizational •Continued to hire, onboard, and train 259 new employees in Nashville, despite ongoing challenges from the pandemic, which resulted in 974 employees in Nashville at year-end, and enabled the firm to maintain its pace to achieve 1,250 employees there by 2024. •Oversaw AB's response to the pandemic and our firm's return-to-office approach, which included marshaling resources across the firm to execute a coordinated global response, enabling the firm to seamlessly meet fiduciary obligations and provide exceptional client service and investment advice, while also prioritizing the health and well-being of AB's 4,085 employees. Culture •Led efforts to reimagine the workplace and ensure the firm’s culture remained intact while evolving into a hybrid work environment. •Fostered stronger AB employee engagement while also delivering concrete actions that resulted in a more diverse workforce, including enhancing AB's diverse talent development and retention efforts.
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			Ali Dibadj CFO and Head of Strategy Summary of Achievements: As CFO, Mr. Dibadj oversaw the delivery of balanced financial targets, communicated our progress internally and externally, and ensured engagement and continuous improvement of a strong Finance function. As Head of Strategy, Mr. Dibadj identified and catalyzed important developments and improvements at AB, led our growth-focused M&A / partnership /seeding advancements, and helped drive our culture firm-wide.			Individual Achievements Financial •Balanced the firm's revenues, expenses and cash through a disciplined process to advance AB's adjusted margin to 33.6% for the year, beat its incremental margin target and increase unitholder distributions by +34% year-over-year. •Led the revamp of our investor and analyst relations with broader outreach, more effective communication, and improved messaging, which contributed to AB's strong total unitholder return. •Improved AB’s financial processes through enhanced accounting, tax, treasury, and financial planning & analysis procedures. Strategic •Executed on commercial synergies with Equitable, leading over a dozen teams across both organizations, including the delivery of an important $10B seed capital commitment from Equitable Financial to AB. •Supported the ~~Board, Mr. Bernstein, other NEOs and various Heads~~acceleration of ~~Strategic Business Units to define, articulate and execute~~ our ~~Growth Strategy, including:~~ ◦~~developing new alternatives, responsible investing, equities, multi-asset and fixed income products;~~ ◦~~evolving~~seed investment program, alongside our firm's ~~approach to servicing new and existing clients in private wealth, retail and institutional globally; and~~ ◦~~hiring and retaining colleagues to support a continuously-improving organization.~~Client Group. •Collaborated with ~~colleagues~~business units to ~~help translate those strategies~~deliver on acquisition and ~~initiatives into delivery of strong 2020 financial results.~~partnership goals in responsible investing and alternatives. •~~Partnered closely~~Activated change throughout the organization, including catalyzing client segmentation, designing new product development processes and jumpstarting M&A/partnership procedures. Organizational •Revamped the firm's quarterly business review procedures, co-developed with ~~Mr. Weisenseel to ensure a smooth transition of the CFO role, including building relationships within~~Ms. Burke our ~~firm's Finance organization~~performance scorecards, improved our compensation analysis systems and ~~AB employees more broadly.~~developed our strategic initiatives prioritization process. •~~Began building AB's Strategy & Corporate Development team, including making key hires~~Digitized financial information delivery, analysis and ~~establishing processes.~~dashboards for AB and Strategic Business Units. •~~Led inorganic growth efforts at AB, which added four new businesses in 2020 and several other important capabilities.~~ •~~Conducted competitive and industry analysis to help guide business decisions.~~ •~~Led furthering of intra-firm transparency, teamwork and efficiency by improving information management system tools, metrics and processes.~~ •~~Established~~Deepened relationships with key external partners, ~~such as~~including clients, consultants, ~~our communities,~~ investors, analysts and the media, among others. Culture •~~Deepened AB's partnership with EQH, leading~~Sponsored AB’s important efforts on Purpose, Mission and Values (as discussed above in Item 1), alongside our responsibility team. •Engaged in firm-wide Town Halls, small group meetings, and mentorship within each of our business units to ~~new business opportunities~~communicate our culture, articulate our strategy, champion diversity & inclusion, and support our employees during a ~~closer operating relationship.~~challenging pandemic.
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			Karl Sprules Head of ~~Contents~~Global Technology & Operations Summary of Achievements: As Global Head of Technology & Operations (GTO), Mr. Sprules led the opening of our Nashville office and chaired our Pandemic Response Team. He rigorously managed Technology and Operations expenses and delivered on a broad portfolio of strategic firm initiatives.			Individual Achievements Financial •Managed the Technology & Operations expenses down to less than 11% of revenue. Strategic •Led AB’s Technology, Operations, Security, and Real Estate teams globally and managed the infrastructure expense ratio down to its lowest level in 10 years while supporting business development and growth. Mr. Sprules completed the reorganization and consolidation of the GTO leadership team and advised the Board, other NEOs, and the Operating Committee on the use of technology to gain competitive business advantage. •Continued to increase our operational efficiency by creating programs that drove down error rates, reduced onboarding risk, automated operational work and increased service levels. •Advised other NEOs and the Operating Committee on the technical and operational feasibility of our strategic growth initiatives, and provided staffing, infrastructure and oversight for new initiativesthroughout the year. •Pivoted the focus of our security infrastructure from defense to defense and response, providing thought leadership on security infrastructure architecture, developing maturity models for business unit assessment of response preparedness and reporting to the Board and other NEOs on our security posture. Organizational •Led the team responsible for opening our new corporate headquarters in Nashville. This brought together multidisciplinary teams of thought leaders in design, construction, redundance, security, technology and collaboration to create a state-of-the-art work environment. •Chaired the AB COVID-19 Pandemic Repose Team. This cross-functional leadership team focused on maintaining firm-wide operating efficiency while keeping our employees safe. Mr. Sprules led the response to virus variant surges and advised business unit heads on the impact of extended work from home. Culture •Produced the Nashville Beat, a recurring Town Hall program designed to engage new and tenured Nashville staff as we transitioned to a hybrid work environment. •Co-lead H-Labs, a joint venture between AB and Equitable focused on accelerating innovation and collaboration.
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			Laurence E. Cranch ~~Role~~Chief Legal Officer Summary of Achievements: As CLO, Mr. Cranch was responsible for managing the legal and compliance department, overseeing all legal affairs for the firm. Mr. Cranch successfully planned and implemented the transition of the leadership of this department to the firm’s General Counsel, Mark Manley, as a result of his retirement at the end of 2021.			Individual Achievements Financial •~~Leadership, responsibility~~Continued to successfully control outside counsel expenses with respect to ongoing and ~~performance as Chief Legal Officer.~~routine legal matters. ~~Individual Achievements~~Strategic •Successfully ~~implemented compliance solutions in response to new compliance requirements that became effective in 2020.~~completed the transition of leadership of the Legal and Compliance Department. •Ensured no regulatory examination resulted in a material adverse finding or enforcement proceeding. •Received favorable feedback from AB business leaders relating to the quality of service of the Legal and Compliance department. •~~Ensured no regulatory examination resulted in a material adverse finding or enforcement proceeding.~~ •Ensured the firm remained free of material litigation, reflecting our pragmatic and aggressive program to avoid situations that are likely to produce disputes and, where disputes do arise, resolve them on favorable terms. Organizational •~~Successfully completed~~Completed the relocation of ~~most~~nearly all of the New ~~York-based~~York Legal and Compliance department to Nashville, including the ~~selection and~~ retention of the employees ~~relocating,~~who relocated, and the recruitment of qualified individuals to fill ~~open~~remaining senior positions in Nashville. •Implemented compliance solutions in response to new compliance requirements that became effective in 2021. Culture •Stressed the ~~location.~~importance of our fiduciary culture through compliance and workplace practices training.
			•~~Successfully controlled outside counsel expenses, with respect to ongoing and routine legal matters.~~ ~~John C. Weisenseel~~ ~~Role~~ •~~Leadership, responsibility and performance as CFO, including seamless transition of his responsibilities to Ms. Burke and Mr. Dibadj.~~ ~~Individual Achievements~~ •~~Successfully managed the firm's liquidity profile, which enabled the firm to navigate the extreme market volatility experienced during 2020.~~2021 Compensation

			•~~Oversaw the achievement of our 30% adjusted operating margin target (actual of 30.1%) by limiting expense growth to maximize operating leverage of the business.~~

•~~Successfully completed the relocation of the Finance department to Nashville, achieving expense savings in excess of target and improved diversity.~~

•~~Provided accounting, tax and structuring guidance on several business development opportunities, including the launch of AB's collateralized loan obligation and European debt real estate businesses.~~

•~~Maintained active discussions with AB’s investor community and credit rating agencies.~~

•~~Successfully transitioned finance responsibilities to Mr. Dibadj and administrative services responsibilities to Ms. Burke.~~

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