Accounting for Stock-Based Compensation

9 Months Ended

Dec. 31, 2022

Share-Based Payment Arrangement [Abstract]

Accounting for Stock-Based Compensation

Accounting for Stock-Based Compensation

The Company records compensation expense associated with restricted stock in accordance with ASC Topic 718 (“Share Based Payment”) (ASU 2016-09). The Company had 959,548 common shares issued under the 2016 Employee Equity Compensation Restricted Stock Plan (“2016 Employee Plan”), and 240,755 common shares issued under the 2015 Outside Director Equity Compensation Restricted Stock Plan (“2015 Director Plan”) at December 31, 2022, all shares of which were issued subject to a restriction or forfeiture period that lapses ratably on the first, second, and third anniversaries of the date of grant, and the fair value of which is being amortized over the one to three-year restriction period, with the exception of performance restricted shares which were issued to the Chief Executive Officer and Chief Financial Officer.

In August 2021, the Company issued 90,000 restricted shares and 510,000 performance restricted shares to the Company’s CEO, in accordance with the CEO’s employment agreement, under the 2016 Employee Plan. The performance restricted shares are based on achieving absolute stock hurdles with the three-year period from the grant date. If the shares meet the absolute stock price hurdle, they will only vest on the third anniversary of the date of grant. As of December 31, 2022, none of the performance stock hurdles were met.

In August 2022, the Company issued 13,000 restricted shares and 3,000 performance restricted shares to the Company's new CFO, in accordance with the CFO's employment agreement, under the 2016 Employee Plan. The performance restricted shares are based on the attainment of performance criteria equally weighted between adjusted EBITDA and revenue. The shares for each grant will be released from restriction equally over a three (3) year period on the anniversary of the grant date, and in the case of the performance restricted shares, subject to the attainment of performance criteria .

The Company issued 550 shares of restricted stock, net of forfeitures, to certain employees under the 2016 Employee Plan during the quarter ended December 31, 2022. For the quarters ended December 31, 2022 and 2021, the Company recognized $1.8 million and $1.4 million, respectively, of compensation expense related to the 2016 Employee Plan and 2015 Director Plan. For the nine months ended December 31, 2022 and 2021, the Company recognized $5.0 million and $3.0 million, respectively, of compensation expense related to the 2016 Employee Plan and 2015 Director Plan. At December 31, 2022 and 2021 there was $10.6 million and $14.4 million of unrecognized compensation cost related to the non-vested restricted stock awards, respectively, which is expected to be recognized over the next one to three years. All stock-based compensation expense is recognized as a payroll-related expense and it is included within the general and administrative expenses line item within the Company’s Consolidated Statements of Income , and the offset is included in the additional paid-in capital line item of the Company’s Consolidated Balance Sheets. On December 31, 2022 and 2021, there were 759,204 and 749,219 non-vested restricted shares issued and outstanding, respectively.

In July 2022, the Company’s 2022 Employee Equity Compensation Restricted Stock Plan (“2022 Employee Plan”) became effective upon the approval of the plan by the Company’s shareholders. The 2022 Employee Plan authorizes 1,000,000 shares of the Company's common stock available for issuance. The value of the restricted stock is determined based on the market value of the stock at the issuance date. The restriction period or forfeiture period is determined by the Company’s Compensation Committee and is to be no less than 1 year and no more than ten years, unless otherwise specified by the Compensation Committee. No shares had been issued under the 2022 Employee Plan as of December 31, 2022.