Stockholders' Equity and Stock Compensation
|12 Months Ended|
Dec. 31, 2022
|Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]|
|Stockholders' Equity and Stock Compensation||
The authorized capital stock of the Company consists of 500 million shares of Class A Common Stock, par value $0.001 per share (“Class A Common Stock”), 75 million shares of Class B Common Stock, par value $0.001 per share (“Class B Common Stock”), and 10 million shares of Preferred Stock, par value $0.001 per share.
The Company has two classes of issued and outstanding common stock: Class A Common Stock and Class B Common Stock. Holders of Class A Common Stock and holders of Class B Common Stock have substantially identical rights, including rights with respect to any declared dividends or distributions of cash or property, and the right to receive proceeds on liquidation or dissolution of the Company after payment of the Company’s indebtedness. The two classes have different voting rights, with holders of Class A Common Stock entitled to one vote per share while holders of Class B Common Stock are entitled to ten votes per share on all matters submitted to a vote of stockholders. The Company uses the two-class method for calculating net earnings per share (EPS). Basic and diluted net EPS of Class A Common Stock and Class B Common Stock are identical. The shares of Class B Common Stock are convertible at any time at the option of the holder into shares of Class A Common Stock on a share-for-share basis. In addition, shares of Class B Common Stock will be automatically converted into a like number of shares of Class A Common Stock upon transfer to any person or entity who is not a permitted transferee.
During the years ended December 31, 2022, 2021 and 2020 certain Class B stockholders converted 128,530, 77,562 and 1,391,670 shares, respectively, of Class B Common Stock to Class A Common Stock.
SHARE REPURCHASE PROGRAM
On January 31, 2022, the Company's Board of Directors authorized a new share repurchase program (the “Share Repurchase Program”), pursuant to which the Company may, from time to time, purchase shares of its Class A Common Stock, for an aggregate repurchase price not to exceed $500 million. The Share Repurchase Program expires on January 31, 2025 and does not obligate the Company to acquire any particular amount of shares.
The following table provides a summary of the Company’s stock repurchase activities:
INCENTIVE AWARD PLAN
A total of 10,000,000 shares of Class A Common Stock were reserved for issuance under the 2017 Incentive Award Plan (the “Plan”). The Plan provides for grants of ISOs, non-qualified stock options, restricted stock and various other types of equity awards as described in the Plan to employees, consultants and directors of the Company. The Plan is administered by the Company’s Board of Directors with respect to awards to non-employee directors and by the Company’s Compensation Committee with respect to other eligible participants.
For the year ended December 31, 2022, the Company granted restricted stock with time-based vesting as well as performance-based awards. The performance-based awards include a market condition tied to the Company’s total shareholder return in relation to its peer companies as well as a financial performance condition tied to annual EPS growth. The vesting and ultimate payout of performance awards is determined at the end of the As of December 31, 2022, a total of 2,749,532 shares remain available for grant as equity awards under the Plan if target levels are achieved for performance-based awards and 2,049,532 available if maximum levels are achieved. performance period and can vary from zero to 200% based on actual results.
The Company issued the following stock-based instruments:
A summary of the status and changes of the Company’s unvested shares related to the Plan is presented below:
The Company determines the fair value of restricted stock awards and any performance-related components based on the closing market price of the Company’s common stock on the date of grant. For share-based awards with a performance-based vesting requirement, the Company evaluates the probability of achieving the performance criteria throughout the performance period and will adjust stock compensation expense up or down based on its estimated probable outcome. Certain performance-based awards contain market condition components which are valued on the date of grant using a Monte Carlo simulation model. The fair value of such awards is expensed ratably over the performance period and is not adjusted for actual achievement.
The Company recognized, as part of general and administrative, compensation expense of $57.3 million, $57.9 million and $62.9 million for grants under the Plan for the years ended December 31, 2022, 2021, and 2020. Related excess income tax expenses, recorded in the consolidated statements of earnings, for the years ended December 31, 2022, 2021 and 2020, were $(1.3) million, $(1.0) million, and $(0.7) million. Nonvested shares generally vest over a graded vesting schedule from one to four years from the date of grant. For grants that have a service requirement, the Company accounts for forfeitures upon occurrence, rather than estimating the probability of forfeiture at the date of grant. Accordingly, the Company recognizes the full grant-date fair value of these awards on a straight-line basis throughout the requisite service period, reversing any expense if, and only if, there is a forfeiture. There was $88.7 million of unrecognized compensation cost related to nonvested common shares as of December 31, 2022, which is expected to be recognized over a weighted-average period of 1.81 years. The total fair value of shares vested during the years ended December 31, 2022, 2021 and 2020 was $51.4 million, $43.1 million and $41.6 million.
STOCK PURCHASE PLAN
As approved by the Company’s stockholders on May 23, 2017, the 2018 Employee Stock Purchase Plan (the “2018 ESPP”) provides a total of 5,000,000 shares of Class A Common Stock for sale. The 2018 ESPP provides eligible employees of the Company and its subsidiaries the opportunity to purchase shares of the Company’s Class A Common Stock at a purchase price equal to 85% of the fair market value on the first trading day or last trading day of each purchase period, whichever is lower. Eligible employees can invest up to 15% of their compensation through payroll deductions during each purchase period. The purchase price discount and the look-back feature cause the 2018 ESPP to be compensatory and the Company recognizes compensation expense, which is computed using the Black-Scholes valuation model.
For the years ended December 31, 2022, 2021 and 2020, the Company recognized $2.6 million, $2.2 million, and $2.3 million of ESPP stock compensation expense. Under the 2018 ESPP, the Company received approximately $8.1 million, $7.3 million and $5.9 million, and issued 243,166, 225,665 and 232,904 shares, respectively, for the years ended December 31, 2022, 2021 and 2020. As of December 31, 2022, there were 3,815,746 shares available for sale under the 2018 ESPP.
No definition available.
The entire disclosure for shareholders' equity and share-based payment arrangement. Includes, but is not limited to, disclosure of policy and terms of share-based payment arrangement, deferred compensation arrangement, and employee stock purchase plan (ESPP).
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef