Deep down in Sotheby’s most recent SEC filing is a milestone achievement. Art Agency, Partners, which was acquired in January of 2016 for $50m plus an additonal $35m earn-out bonus, has met Sotheby’s targets for the earn out which will be paid over the next four years in annual installments [emphasis added]:
For the three and nine months ended September 30, 2016, we recognized $17.2 million and $21.6 million, respectively, of compensation expense associated with the AAP earn-out arrangement based on our estimate of progress against the Target. For the year ended December 31, 2016, we recognized $35 million of compensation expense associated with the AAP earn-out arrangement, reflecting the full achievement of the Target as a result of our improved market share in the Contemporary Art collecting category, as well as an improvement in auction commission margins, during the initial annual period. The $35 million owed under the earn-out arrangement is being paid in four annual increments of $8.75 million in the first quarter of each year beginning in 2017 and through 2020.