The Company maintains the 2020 Plan which provides for the grant of stock options, restricted stock, restricted stock units, performance shares, performance stock units and other stock-based awards as incentives to encourage employees, consultants and non-employee directors to participate in the long-term success of the Company. As of December 31, 2023, there were 2,436,113 shares available for grant under the 2020 Plan.

The Company records stock-based compensation expense for employees in employee compensation and benefits and for non-employee directors in general and administrative expenses in the Consolidated Statements of Operations. Total stock-based compensation expense was as follows:


	Year Ended December 31,
	2023		2022		2021
	(In thousands)
Employees
Restricted stock, restricted stock units, performance shares and performance stock units	$	24,205	$	24,593	$	23,041
Stock options		3,592		3,583		2,961
		27,797		28,176		26,002
Non-employee directors
Restricted stock and restricted stock units		1,393		1,688		1,312
Total stock-based compensation	$	29,190	$	29,864	$	27,314

The exercise price of each option granted is equal to the market price of the Company’s common stock on the date of grant. Generally, option grants have provided for vesting over a three or five-year period. Options generally expire in six or ten years from the date of grant. The fair value of each option award is estimated on the date of grant using the Black-Scholes option-pricing model. The determination of fair value of share-based payment awards on the date of grant using an option-pricing model is affected by the Company’s stock price as well as assumptions regarding a number of highly complex and subjective variables, including the expected stock price volatility over the term of the awards, the risk-free interest rate, the expected dividend yield rate and the expected term. Expected volatilities are based on historical volatility of the Company’s stock. The risk-free interest rate is based on U.S. Treasury securities with a maturity value approximating the expected term of the option. The dividend yield rate is based on the expected annual dividends to be paid divided by the expected stock price. The expected term represents the period of time that options granted are expected to be outstanding based on actual and projected employee stock option exercise behavior.

The weighted-average fair value for options granted during the years ended December 31, 2023, 2022 and 2021 were $123.47, $101.38 and $137.66, respectively. The following table represents the assumptions used for the Black-Scholes option-pricing model to determine the per share weighted-average fair value for options granted, excluding the two awards based on the Monte Carlo model discussed below:


	Year Ended December 31,
	2023			2022			2021
Expected life (years)		5.0			5.0			5.0
Risk-free interest rate		3.6	%		1.5	%		0.4	%
Expected volatility		35.8	%		32.6	%		31.2	%
Expected dividend yield		0.8	%		0.7	%		0.4	%

In addition to the stock option grants above, the Company granted 148,524 and 76,868 premium-priced stock options to the Company’s then-Chief Executive Officer and then-President and Chief Operating Officer in November 2018 and January 2019, respectively. The stock options vested in November 2023 and January 2024, respectively. The fair value of each option award was estimated on the date of grant using the Monte Carlo model.

The following table reports stock option activity during the years ended December 31, 2023, 2022 and 2021 and the intrinsic value as of December 31, 2023, 2022 and 2021:


	Number of Shares			Weighted-Average Exercise Price ($)		Remaining Contractual Term		Intrinsic Value ($)
								(In thousands)
Outstanding at December 31, 2020		387,372			223.60
Granted		17,897			517.88
Canceled		(616	)		394.77
Exercised		(91,900	)		107.05
Outstanding at December 31, 2021		312,753			274.35
Granted		23,904			352.15
Canceled		(1,646	)		421.08
Exercised		(28,758	)		157.08
Outstanding at December 31, 2022		306,253			290.65
Granted		13,908			358.53
Canceled		(551	)		382.12
Exercised		(5,653	)		166.34				761
Outstanding at December 31, 2023		313,957			295.74		1.1		6,214
Exercisable at December 31, 2023		202,562			285.35		0.7		5,502

The intrinsic value is the amount by which the closing price of the Company’s common stock on December 31, 2023 of $292.85 or the price on the day of exercise exceeds the exercise price of the stock options multiplied by the number of shares. As of December 31, 2023, there was $2.2 million of total unrecognized compensation cost related to non-vested stock options. That cost is expected to be recognized over a weighted-average period of 0.5 years.

Our annual compensation program includes share-based compensation awards as a component of certain employees’ total compensation. These awards are generally vest ratably over a three-year period, subject to continued service to the Company. In addition, we grant share-based compensation awards in conjunction with certain new hires and for retention purposes. These awards generally vest over a three- or four-year period. In addition, the Company grants share-based compensation awards to its non-employee directors as part of such directors’ compensation. These awards generally vest on the date of the Company’s next annual stockholders’ meeting, subject to continued service to the Company. Such share-based compensation awards are expensed over the requisite service period.

The Company grants performance equity awards to certain executives and certain senior managers of the firm as a component of their total compensation and in conjunction with certain new hires and for retention purposes. Annual performance equity awards generally cliff-vest on the third anniversary of the grant date based on the certification of certain performance metrics and subject to the applicable employee’s continued employment with the Company. The Company has also previously granted performance-based awards with a five-year vesting period that vested in November 2023 and January 2024.

In January 2021, annual performance equity awards were granted with a three-year performance period that would vest based on the level of achievement by the Company of certain predetermined metrics, including pre-tax adjusted operating margin and market share for the years ended December 31, 2021, 2022 and 2023, subject to continued service with the Company through the vesting date. In January 2024, the Company’s Compensation and Talent Committee of the Board certified the Company’s performance against such metrics at 38.9%. Compensation expense for the three-year performance equity awards is measured at the grant date and expensed over the requisite service period with performance target achievement assessed at the end of each reporting period.

In January 2022 and February 2023, annual performance stock units were granted with a three-year performance period that will vest based on the level of achievement by the Company of certain predetermined metrics, including pre-tax adjusted operating margin, U.S. credit market share and revenue growth excluding U.S. credit for the following three fiscal years, including the year of grant. The final awarded payout for the awards granted in 2022 and 2023 will range from zero to 200%. Subject to the grantee’s continued service, any performance equity awarded to a participant will vest on the three-year anniversary of the grant date. Compensation expense for the three-year performance stock units is measured at the grant date and expensed over the requisite service period with performance target achievement assessed at the end of each reporting period.

The Company granted 37,742 and 18,914 performance shares to the Company’s then-Chief Executive Officer and then-President and Chief Operating Officer in November 2018 and January 2019, respectively. The performance shares vested in November 2023 and January 2024, respectively.

In August 2021, the Company’s then-Chief Financial Officer received a one-time equity award in connection with his promotion to Chief Financial Officer consisting, in part, of a performance stock unit award with a target of 1,070 shares. The award was scheduled to vest on August 1, 2024, but was forfeited upon the termination of his employment in January 2024.

In March 2022, the Company’s Chief Information Officer received a one-time sign-on equity award consisting, in part, of a performance stock unit award with a target of 3,986 shares. The award will vest on March 1, 2025 after certification of the performance criteria, subject to his continued employment through such date.

In April 2023, in connection with his appointment to the position, the Company’s Chief Executive Officer received a one-time equity award consisting, in part, of a performance stock unit award with a target of 5,039 shares. The performance stock units vest 25% on each of the third and fourth anniversaries of the grant date and 50% on the fifth anniversary of the grant date, subject to certification of the performance criteria and his continued service through the respective vesting dates.

The following table reports the Company's performance payout estimates for three-year performance period awards as of December 31, 2023, as well as the target and maximum share payouts for each award date granted:


Award Date	2023 Estimate		Target		Maximum
January 15, 2021		4,739		12,185		24,370
August 1, 2021		437		1,070		2,140
January 31, 2022		11,343		18,155		36,310
March 1, 2022		2,490		3,986		7,972
February 15, 2023		14,178		18,263		36,526

The following table reports restricted stock, restricted stock unit, performance share and performance stock unit activity during the years ended December 31, 2023, 2022 and 2021:


	Number of Restricted Shares			Weighted-Average Grant Date Fair Value

Outstanding at December 31, 2020		230,647		$	224.63
Granted		47,142
Performance share pay-out		—
Canceled		(3,911	)
Vested		(111,268	)
Outstanding at December 31, 2021		162,610		$	316.56
Granted		72,861
Performance share pay-out		—
Canceled		(8,513	)
Vested		(64,602	)
Outstanding at December 31, 2022		162,356		$	321.04
Granted		90,242
Performance share pay-out		12,145
Canceled		(5,272	)
Vested		(98,927	)
Outstanding at December 31, 2023		160,544		$	346.15

As of December 31, 2023, there was $38.4 million of total unrecognized compensation cost related to non-vested restricted stock, restricted stock units, performance shares, and performance stock units. That cost is expected to be recognized over a weighted-average period of 1.5 years.

The Company maintains the MarketAxess Holdings Inc. 2022 Employee Stock Purchase Plan (the “ESPP”) pursuant to which a total of 121,221 shares of the Company’s Common Stock will be made available for purchase by employees. For the year ended December 31, 2023, the Company issued 4,655 shares of common stock under the ESPP. As of December 31, 2023, there were 116,566 shares available for purchase under the ESPP.