Stock-Based Compensation

12 Months Ended

Dec. 31, 2024

Stock-Based Compensation

Stock-Based Compensation

20. Stock-Based Compensation

Since 2012, the Company has issued stock-based incentive awards pursuant to the Hilltop Holdings Inc. 2012 Equity Incentive Plan (the “2012 Plan”). In July 2020, pursuant to stockholders’ approval, the Company adopted the Hilltop Holdings Inc. 2020 Equity Incentive Plan (the “2020 Plan”). The 2020 Plan serves as successor to the 2012 Plan. The 2012 Plan and the 2020 Plan are referred to collectively as “the Equity Plans.” The Equity Plans provide for the grant of nonqualified stock options, stock appreciation rights, restricted stock, RSUs, performance awards, dividend equivalent rights and other awards to employees of the Company, its subsidiaries and outside directors of the Company. Shares available for grant under the 2012 Plan that were reserved but not issued as of the effective date of the 2020 Plan were added to the reserves of the 2020 Plan. No additional awards may be made under the 2012 Plan, but the 2012 Plan remains in effect as to outstanding awards. Outstanding awards under the Equity Plans continue to be subject to the terms and conditions of the respective Plans. The number of shares authorized for issuance pursuant to awards under the 2020 Plan is 3,650,000 plus any shares that become available upon the forfeiture, expiration, cancellation or settlement in cash awards outstanding under the 2012 Plan as of April 30, 2020. At December 31, 2024, 1,416,696 shares of common stock remained available for issuance pursuant to awards granted under the 2020 Plan, excluding shares that may be delivered pursuant to outstanding awards. Compensation expense related to the Equity Plans was $10.7 million, $15.5 million and $15.6 million during 2024, 2023 and 2022, respectively.

During 2024, 2023 and 2022, Hilltop granted 15,923, 17,912 and 21,545 shares of common stock, respectively, pursuant to the Equity Plans to certain non-employee members of the Company’s board of directors for services rendered to the Company.

Restricted Stock Units

The Compensation Committee of the board of directors of the Company issued RSUs to certain employees pursuant to the Equity Plans. Certain RSUs are subject to time-based vesting conditions and generally provided for a cliff vest on the third anniversary of the grant date, while other RSUs provided for vesting based upon the achievement of certain performance goals over a three-year period subject to service conditions set forth in the award agreements, with associated costs generally recognized on a straight-line basis over the respective vesting periods. The RSUs are not transferable, and the shares of common stock issuable upon conversion of vested RSUs may be subject to transfer restrictions for a period of one year following conversion, subject to certain exceptions. In addition, the applicable RSU award agreements provide for accelerated vesting under certain conditions.

The following table summarizes information about nonvested RSU activity for the periods presented (shares in thousands).

		RSUs
			Weighted
			Average
			Grant Date
		Outstanding	Fair Value
Balance, December 31, 2021		1,869	$	23.16
	Granted	551	$	33.22
	Vested/Released	(732)	$	20.00
	Forfeited	(140)	$	24.75
Balance, December 31, 2022		1,548	$	28.09
	Granted	479	$	34.36
	Vested/Released	(751)	$	21.93
	Forfeited	(24)	$	32.30
Balance, December 31, 2023		1,252	$	34.10
	Granted	591	$	30.72
	Vested/Released	(531)	$	33.02
	Forfeited	(27)	$	32.85
Balance, December 31, 2024		1,285	$	33.02

Vested/Released RSUs include an aggregate of 392,887 shares withheld to satisfy employee statutory tax obligations during 2024, 2023 and 2022.

During 2024, the Compensation Committee of the board of directors of the Company awarded certain executives and key employees an aggregate of 493,726 RSUs pursuant to the 2020 Equity Plan. At December 31, 2024, 379,661 of these RSUs are subject to time-based vesting conditions and generally cliff vest on the third anniversary of the grant date, and 103,995 of these outstanding RSUs will cliff vest based upon the achievement of certain performance goals over a three-year period.

At December 31, 2024, in the aggregate, 956,015 of the outstanding RSUs are subject to time-based vesting conditions and generally cliff vest on the third anniversary of the grant date, and 327,626 outstanding RSUs cliff vest based upon the achievement of certain performance goals over a three-year period. At December 31, 2024, unrecognized compensation expense related to outstanding RSUs of $14.8 million is expected to be recognized over a weighted average period of 1.19 years.