Share-Based Payments

6 Months Ended

Jun. 30, 2022

Share-Based Payment Arrangement, Noncash Expense [Abstract]

The Company's ability to grant new equity-based awards under the Company's existing equity incentive plans expired on May 9, 2022. At the Annual Meeting of Stockholders held on June 24, 2022, the Company's stockholders approved the Western Asset Mortgage Capital Corporation 2022 Omnibus Incentive Plan and the Western Asset Mortgage Capital Corporation 2022 Manager Omnibus Incentive Plan (collectively, the “2022 Plans”). The 2022 Plans provide for the issuance of options (including non-statutory stock options and incentive stock options), stock appreciation rights (referred to as SARs), restricted stock, restricted stock units (referred to as RSUs), stock bonuses, other stock based awards and cash awards.

The aggregate maximum number of shares of our common stock available for future issuances under the 2022 Plans is 1,000,000 shares, which was reduced to 100,000 shares following the completion of the reverse stock split. The officers, employees, non-employee directors, independent contractors, and consultants of the Company or any affiliate of the Company, including any individuals who are employees of the Manager or one of the Manager’s affiliates, are eligible to participate in the Incentive Plan, provided that they have been selected by the Plan Administrator.

On June 24, 2022, the Company granted a total of 217,040 restricted stock units (54,260 per each independent director) or 21,704 shares (5,425 per each independent director) on a post reverse stock split basis, to each of the Company's four independent directors. These restricted stock units will vest in full on June 24, 2023, the first anniversary of the grant date, and will be settled in shares of the Company’s common stock upon each of the independent director’s separation from service with the Company.

On June 25, 2021, the Company granted a total of 81,160 restricted stock units (20,290 each per each independent director), or 8,116 shares (2,029 per each independent director) on a post reverse stock split basis, to each of the Company’s four independent directors. These restricted stock units in this grant vested in full on June 25, 2022, the first anniversary of the grant date, and will be settled in shares of the Company’s common stock upon each of the independent director’s separation from service with the Company.

On June 24, 2022, the Company granted 200,000 restricted stock units, or 20,000 restricted stock units on a post reverse stock split basis under the Western Asset Mortgage Capital Corporation 2022 Omnibus Incentive Plan to the Company’s Chief Financial Officer. These restricted stock units will vest in equal installments on the first and second anniversary of the grant date.

During the six months ended June 30, 2022 and June 30, 2021, 11,716 and 13,782 restricted stock units vested, respectively. The Company recognized stock-based compensation expense of approximately $70 thousand and approximately $106 thousand for the three months ended June 30, 2022 and June 30, 2021, respectively. The Company recognized stock-based compensation expense of approximately $235 thousand and approximately $288 thousand for the six months ended June 30, 2022 and June 30, 2021, respectively. In addition, the Company had unamortized compensation expense of $499 thousand and $211 thousand for equity awards at June 30, 2022 and December 31, 2021, respectively.

Holders of restricted stock units are entitled to receive dividends (or dividend equivalent payments) and distributions that become payable on the restricted stock units during the restricted period. Dividend equivalent payments allocable to restricted stock units are deemed to purchase additional phantom shares of the Company's common stock that are credited to each participant's deferral account. The award agreements include restrictions whereby the restricted stock units cannot be sold, assigned, transferred, pledged, hypothecated, or otherwise disposed of prior to the lapse of restrictions under the respective award agreement. The restrictions lapse on the unvested restricted stock units awarded when vested, subject to the grantee's continuing to provide services to the Company as of the vesting date. Unvested restricted stock units and rights to dividends thereon are forfeited upon termination of the grantee.

The following is a summary of restricted equity awards vesting dates as of June 30, 2022 and December 31, 2021:


	June 30, 2022	December 31, 2021
Vesting Date	Shares Vesting	Shares Vesting
March 2022	—	3,600
June 2022	—	8,116
June 2023	31,704	—
June 2024	10,000	—
Total	41,704	11,716

The following table presents information with respect to shares issued under the Company’s Equity Incentive Plans for the six months ended June 30, 2022 and June 30, 2021:


	June 30, 2022			June 30, 2021
	Restricted Stock Units	Weighted Average Grant Date Fair Value (1)		Restricted Stock Units	Weighted Average Grant Date Fair Value (1)
Outstanding at beginning of period	114,825	$	131.85	102,554	$	140.99
Granted (2)	43,577	12.74		8,623	32.47
Cancelled/forfeited	—	—		(2,546)	27.50
Outstanding at end of period	158,402	99.02		108,631	135.03
Unvested at end of period	41,704	$	12.52	11,716	$	56.19

(1)The grant date fair value of the awards is based on the closing market price of the Company’s common stock at the grant date.

(2)Includes 1,873 and 507 shares attributed to dividends on restricted stock under the Director Deferred Fee Plan for the six months ended June 30, 2022 and June 30, 2021, respectively.