Share-Based Compensation

3 Months Ended

Mar. 31, 2022

Share-based Payment Arrangement [Abstract]

On January 4, 2018, the Company’s Board of Trustees adopted the Americold Realty Trust 2017 Equity Incentive Plan (2017 Plan), which permits the grant of various forms of equity- and cash-based awards from a reserved pool of 9,000,000 common shares of the Company. The details of the 2017 Plan are disclosed in greater detail in the 2021 Form 10-K as filed with the SEC.

All share-based compensation cost is measured at the grant date, based on the estimated fair value of the award. The Company issues time-based, performance-based and market performance-based equity awards. Time-based awards and cliff vesting market performance-based awards are recognized on a straight-line basis over the associates’ requisite service period, as adjusted for estimate of forfeitures. Performance-based awards are recognized ratably over the vesting period using a graded vesting attribution model upon the achievement of the performance target, as adjusted for estimate of forfeitures. The only performance-based awards issued by the Company were granted in 2016 and 2017.

The Company implemented an Employee Stock Purchase Plan (ESPP) which became effective on December 8, 2020. Under the ESPP, eligible employees are granted options to purchase common shares at the lower of 85% of the fair market value of the stock at the time of grant or 85% of the fair market value at the time of exercise. Options to purchase shares are granted twice yearly on or about January 1 and July 1, and exercisable on or about the succeeding July 1, and January 1, respectively, of each year. No participant may purchase more than $25,000 worth of common shares in a six-month offering period, or a maximum of 2,400 common shares. There are 5,000,000 common shares available for issuance under the ESPP. The share-based compensation cost of the ESPP options are measured based on grant date at fair value and are recognized on a straight-line basis over the offering period. ESPP assumptions and the related fair value per share table are disclosed in the three month period in which there is ESPP activity, such as an ESPP purchase. The ESPP did not have a material impact on share-based compensation expense during each of the three months ended March 31, 2022 and 2021.

Aggregate share-based compensation charges were $8.3 million and $5.0 million during the three months ended March 31, 2022 and 2021, respectively. Routine share-based compensation expense is included as a component of “Selling, general and administrative” expense on the accompanying Condensed Consolidated Statements of Operations. As of March 31, 2022, there was $44.1 million of unrecognized share-based compensation expense related to stock options and restricted stock units, which will be recognized over a weighted-average period of 2.0 years. As of March 31, 2022 and December 31, 2021, the Company accrued $1.2 million and $1.5 million, respectively, of dividend equivalents on unvested units payable to associates and trustees.

Restricted Stock Units Activity

Restricted stock units are nontransferable until vested. Prior to the issuance of a common share, the grantees of restricted stock units are not entitled to vote the shares. Time-based restricted stock unit awards vest in equal annual increments over the vesting period. Performance-based and market performance-based restricted stock unit awards cliff vest upon the achievement of the performance target, as well as completion of the performance period.

The following table summarizes restricted stock unit grants under the 2017 Plan during the three months ended March 31, 2022 and 2021, respectively:


Three Months Ended March 31,	Grantee Type	Number of Restricted Stock Units Granted	Vesting Period	Grant Date Fair Value (in thousands)

2022	Associates	481,099	1-3 years	$	12,857

2021	Associates	296,610	1-3 years	$	9,885

Restricted stock units granted for the three months ended March 31, 2022 consisted of: (i) 350,641 time-based graded vesting restricted stock units with various vesting periods ranging from one to three years issued to certain associates and (ii) 130,458 market performance-based cliff vesting restricted stock units with a three-year vesting period issued to certain associates. The vesting of such market performance-based awards will be determined based on Americold Realty Trust’s total shareholder return (TSR) relative to the MSCI US REIT Index (RMZ), computed for the performance period that began January 1, 2022 and will end December 31, 2024.

Restricted stock units granted for the three months ended March 31, 2021 consisted of (i) 188,088 time-based graded vesting restricted stock units with various vesting periods ranging from one to three years issued to certain associates and (ii) 108,522 market performance-based cliff vesting restricted stock units with a three-year vesting period issued to certain associates. The vesting of such market performance-based awards will be determined based on Americold Realty Trust’s total shareholder return (TSR) relative to the MSCI US REIT Index (RMZ), computed for the performance period that began January 1, 2021 and will end December 31, 2023.

In January 2021, following the completion of the applicable market-performance period, the Compensation Committee determined that the high level had been achieved for the 2018 awards and, accordingly, 799,591 units vested immediately, representing a vesting percentage of 150%.

In January 2022, following the completion of the applicable market-performance period, the Compensation Committee determined that the 51st percentile had been achieved for the 2019 awards and, accordingly, 194,111 units vested immediately, representing a vesting percentage of 91.4%.

The following table provides a summary of restricted stock awards activity during the three months ended March 31, 2022:


Three Months Ended March 31, 2022
Restricted Stock	Number of Time-Based Restricted Stock Units	Aggregate Intrinsic Value (in millions)		Number of Performance-Based Restricted Stock Units	Aggregate Intrinsic Value (in millions)		Number of Market Performance-Based Restricted Stock Units(2)	Aggregate Intrinsic Value (in millions)
Non-vested as of December 31, 2021	1,071,959	$	35.1	—	$	—	374,048	$	12.3
Granted	350,641			—			130,458
Market-performance adjustment(3)	—			—			(18,253)
Vested	(171,176)			—			(194,111)
Forfeited	(45,597)			—			(8,044)
Non-vested as of March 31, 2022	1,205,827	$	33.6	—	$	—	284,098	$	7.9
Shares vested, but not released(1)	615,643	17.2		42,856	1.2		—	—
Total outstanding restricted stock units	1,821,470	$	50.8	42,856	$	1.2	284,098	$	7.9

(1)For certain vested restricted stock units, common share issuance is contingent upon the first to occur of: (1) termination of service; (2) change in control; (3) death; or (4) disability, as defined in the 2010 Plan. This is comprised of 568,753 vested time-based restricted stock units which belong to a member of the Board of Trustees who has resigned and common shares shall not be issued until the first to occur: (1) change in control; or (2) April 13, 2022. The weighted average grant date fair value of these units is $9.38 per unit. This is also comprised of 46,890 vested time-based restricted stock units which belong to an active member of the Board of Trustees and the date of issuance is therefore unknown at this time. The weighted average grant date fair value of these units is $8.42 per unit. Finally, this is comprised of 42,856 vested performance-based restricted stock units which belong to the former CEO and common shares shall not be issued until May 2, 2022 in accordance with the terms of the award. The weighted average grant date fair value of these units is $13.43 per unit. The holders of these vested restricted stock units are entitled to receive distributions, but are not entitled to vote the shares until common shares are issued.in exchange for these vested restricted stock units.

(2)The number of market performance-based restricted stock units are reflected within this table based upon the number of shares issuable upon achievement of the performance metric at target.

(3)Represents the decrease in the number of original market-performance units awarded based on the final performance criteria achievement at the end of the defined performance period.

The weighted average grant date fair value of restricted stock units granted during the three months ended March 31, 2022 was $26.73 per unit, for vested and converted restricted stock units was $33.68, for forfeited restricted stock units was $30.50. The weighted average grant date fair value of non-vested restricted stock units was $29.30 and $31.40 per unit as of March 31, 2022 and December 31, 2021, respectively.

OP Units Activity

The Trustees and certain members of management may elect to receive their awards in the form of either OP units or restricted stock units (applicable to time-vested and market-performance based awards). The terms of the OP units mirror the terms of the restricted stock units granted in the respective period.

The following table summarizes OP unit grants during the three months ended March 31, 2022 and March 31, 2021:


Three Months Ended March 31,	Grantee Type	Number of OP Units Granted	Vesting Period	Grant Date Fair Value (in thousands)

2022	Associates	342,980	1-3 years	$	9,001

2021	Associates	258,479	1-3 years	$	8,434

OP units granted for the year ended March 31, 2022 consisted of: (i) 98,994 time-based graded vesting OP units with various vesting periods ranging from one to three years issued to certain associates in connection with the annual grant provided in March and (ii) 243,986 market performance-based cliff vesting OP units with a three-year vesting period issued to certain associates in connection with the annual grant provided in March.

OP units granted for the year ended March 31, 2021 consisted of: (i) 60,472 time-based graded vesting OP units with various vesting periods ranging from one to three years issued to certain associates and (ii) 198,007 market performance-based cliff vesting OP units with a three-year vesting period issued to certain associates.

The following table provides a summary of the OP unit awards activity during the three months ended March 31, 2022:


Three Months Ended March 31, 2022
OP Units	Number of Time-Based OP Units	Aggregate Intrinsic Value (in millions)		Number of Market Performance-Based OP Units	Aggregate Intrinsic Value (in millions)
Non-vested as of December 31, 2021	140,222	$	4.6	288,165	$	9.4
Granted	98,994			243,986
Vested	(28,179)			—
Forfeited	(7,635)			(20,366)
Non-vested as of March 31, 2022	203,402	$	5.7	511,785	$	14.3
Shares vested, but not released	104,874	2.9		—	—
Total outstanding OP units	308,276	$	8.6	511,785	$	14.3

The weighted average grant date fair value of OP units granted for the three months ended March 31, 2022 was $26.49 per unit, for vested OP units was $32.93 and forfeited OP units was $31.94. The weighted average grant date fair value of non-vested OP units was $29.45 and $31.30 per unit as of March 31, 2022 and December 31, 2021, respectively.

Stock Options Activity

The following table provides a summary of option activity for the three months ended March 31, 2022:


Options	Shares (In thousands)	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Terms (Years)
Outstanding as of December 31, 2021	206,298	$	9.81	2.9
Granted	—	—
Exercised	(40,900)	9.81
Forfeited or expired	—	—
Outstanding as of March 31, 2022	165,398	9.81		3.1

Exercisable as of March 31, 2022	165,398	$	9.81	3.1

The total grant date fair value of stock option awards that vested during the three months ended for both March 31, 2022 and 2021 was approximately $0.1 million and $0.5 million, respectively. The total intrinsic value of options exercised for the three months ended March 31, 2022 and 2021 was $0.7 million and $4.2 million, respectively.