The Company maintains the 2020 Plan which provides for the grant of Full Value Awards, stock options 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, 2024, there were 2,562,436 shares available for grant under the 2020 Plan.

Total stock-based compensation expense was as follows:


	Year Ended December 31,
	2024		2023		2022
	(In thousands)
Employees
Full Value Awards	$	27,607	$	24,205	$	24,593
Stock options		1,728		3,592		3,583
		29,335		27,797		28,176
Non-employee directors
Restricted stock and restricted stock units		1,512		1,393		1,688
Total stock-based compensation	$	30,847	$	29,190	$	29,864

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 for employees includes $1.2 million, $0.9 million and $0.9 million of capitalized software development costs for the years ended December 31, 2024, 2023 and 2022, respectively.

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-year period. Options generally expire in six 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 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, 2024, 2023 and 2022 were $77.16, $123.47 and $101.38, 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:


	Year Ended December 31,
	2024			2023			2022
Expected life (years)		4.7			5.0			5.0
Risk-free interest rate		4.0	%		3.6	%		1.5	%
Expected volatility		39.2	%		35.8	%		32.6	%
Expected dividend yield		1.3	%		0.8	%		0.7	%

The following table reports stock option activity during the years ended December 31, 2024, 2023 and 2022 and the intrinsic value as of December 31, 2024:


	Number of Shares			Weighted-Average Exercise Price ($)		Remaining Contractual Term		Intrinsic Value ($)
								(In thousands)
Outstanding at December 31, 2021		312,753			274.35
Granted		23,904			352.15
Canceled or forfeited		(1,646	)		421.08
Exercised		(28,758	)		157.08
Outstanding at December 31, 2022		306,253			290.65
Granted		13,908			358.53
Canceled or forfeited		(551	)		382.12
Exercised		(5,653	)		166.34
Outstanding at December 31, 2023		313,957			295.74
Granted		20,793			220.50
Canceled or forfeited		(229,478	)		276.79
Exercised		(22,044	)		205.28				1,314
Outstanding at December 31, 2024		83,228			353.14		3.2		115
Exercisable at December 31, 2024		46,710			411.47		2.1		—

The intrinsic value is the amount by which the closing price of the Company’s common stock on December 31, 2024 of $226.04 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, 2024, there was $1.8 million of total unrecognized compensation cost related to unvested stock options. That cost is expected to be recognized over a weighted-average period of 1.5 years.

Our annual compensation program includes share-based compensation awards as a component of certain employees’ total compensation. These awards 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-year period. The Company also grants share-based compensation awards to its non-employee directors as part of such directors’ compensation. These awards generally vest on the earlier of the date of the Company’s next annual stockholders’ meeting or the one-year anniversary of the grant date, subject to continued service to the Company. Such share-based compensation awards are expensed over the requisite service period.

The Company grants performance stock unit 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 stock unit 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 service with the Company.

In January 2022, February 2023 and February 2024, 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, 2023 and 2024 will range from zero to 200%. Subject to the grantee’s continued service, any performance stock unit award 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.

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 service through such date. Compensation expense for the Chief Information Officer award was measured at the grant date and will be expensed over the requisite service period with performance target achievement assessed at the end of each reporting period.

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. Compensation expense for the Chief Executive Officer award was measured at the grant date and will be expensed over the requisite service period.

In June 2024, the Company’s Chief Financial Officer received a one-time sign-on equity award consisting, in part, of a performance stock unit award with a target of 1,797 shares. The award will vest on June 3, 2027 after certification of the performance criteria, subject to her continued service through such date. Compensation expense for the Chief Financial Officer award was measured at the grant date and will be expensed over the requisite service period with performance target achievement assessed at the end of each reporting period.

The following table reports the Company’s performance payout estimates for three-year performance period awards as of December 31, 2024, as well as the target and maximum share payouts for each award date granted:


Award Date	Estimate		Target		Maximum
January 31, 2022		7,771		17,844		35,688
March 1, 2022		1,736		3,986		7,972
February 15, 2023		11,060		17,607		35,214
February 15, 2024		31,681		30,811		61,622
June 3, 2024		1,797		1,797		3,594

The following table reports Full Value Awards activity during the years ended December 31, 2024, 2023 and 2022:


	Number of Restricted Shares			Weighted-Average Grant Date Fair Value

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
Granted		150,031
Performance share pay-out		4,739
Canceled		(29,581	)
Vested		(85,932	)
Outstanding at December 31, 2024		199,801		$	276.74

As of December 31, 2024, there was $39.6 million of total unrecognized compensation cost related to Full Value Awards. That cost is expected to be recognized over a weighted-average period of 1.7 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. During the year ended December 31, 2024, the Company issued 8,511 shares of common stock under the ESPP. As of December 31, 2024, there were 108,055 shares available for purchase under the ESPP.