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Equity-Based Compensation - REIT
 12 Months Ended
Dec. 31, 2019
Entity Information [Line Items]  
Equity-Based Compensation EQUITY-BASED COMPENSATION
The Corporation and ESH REIT each maintain an LTIP, as amended and restated in 2015, approved by their shareholders. Under each LTIP, the Corporation and ESH REIT may issue to eligible employees or directors restricted stock units ("RSUs") or other equity-based awards in respect of Paired Shares with service, performance or market vesting conditions. The aggregate number of Paired Shares that may be the subject of awards under the LTIPs shall not exceed 8.0 million, of which no more than 4.0 million may be granted as incentive stock options. Each of the Corporation’s and ESH REIT’s LTIPs has a share reserve of an equivalent number of shares of Corporation common stock and ESH REIT Class B common stock. As of December 31, 2019, 4.6 million Paired Shares were available for future issuance under the LTIPs.
Equity-based compensation expense is recognized by amortizing the grant-date fair value on a straight-line basis over the requisite service period of each award. A portion of the grant-date fair value of all equity-based awards is allocated to a share of Corporation common stock and a portion is allocated to a share of ESH REIT Class B common stock. Equity-based compensation expense, which is included in general and administrative expenses in the accompanying consolidated statements of operations, was $6.9 million, $7.7 million and $7.6 million for the years ended December 31, 2019, 2018 and 2017, respectively.
As of December 31, 2019, unrecognized compensation expense related to outstanding equity-based awards and the related weighted-average period over which it is expected to be recognized subsequent to December 31, 2019 is presented in the following table. Total unrecognized compensation expense will be adjusted for forfeitures and the achievement of certain market-based conditions.
Unrecognized
Compensation Expense Related to Outstanding Awards
(in thousands)		Remaining Weighted-
Average Amortization
Period
(in years)
RSUs with service vesting conditions$10,180  1.6
RSUs with market vesting conditions1,878  1.7
Total unrecognized compensation expense$12,058  
RSU activity during the years ended December 31, 2019, 2018 and 2017, was as follows:
   Performance-Based Awards
 Service-Based AwardsPerformance VestingMarket Vesting
 Number of
RSUs
(in thousands)
Weighted-
Average Grant-
Date Fair
Value(1)
Number of
RSUs
(in thousands)
Weighted-
Average Grant-
Date Fair
Value
Number of
RSUs
(in thousands)
Weighted-
Average Grant-
Date Fair
Value(1)
Outstanding at January 1, 2017892  $16.93  119  $14.07  972  $9.01  
Granted272  $17.51  192  $17.45  104  $18.58  
Settled(417) $17.75  (119) $14.07  —  $—  
Forfeited(145) $15.13  (39) $17.45  (865) $8.35  
Outstanding at December 31, 2017602  $17.06  153  $17.45  211  $16.46  
Granted401  $19.42  57  $19.52  204  $17.41  
Settled(399) $17.46  (153) $17.45  (41) $20.76  
Forfeited(81) $18.05  (25) $19.52  (77) $15.36  
Outstanding at December 31, 2018523  $18.42  32  $19.52  297  $16.79  
Granted687  $16.02  24  $17.20  247  $15.35  
Settled(249) $18.03  (33) $19.46  (53) $12.36  
Forfeited(33) $17.86  (23) $17.20  (236) $16.52  
Outstanding at December 31, 2019928  $16.77  —  $—  255  $16.56  
Vested at December 31, 201938  $15.52  —  $—  45  $18.58  
Nonvested at December 31, 2019890  $16.82  —  $—  210  $16.11  
Vested at December 31, 20187  $19.11  32  $19.52  50  $12.03  
Nonvested at December 31, 2018516  $18.41  —  $—  247  $17.75  
_____________________
(1)An independent valuation was performed contemporaneously with the issuance of grants.
The grant-date fair value of awards with service vesting conditions is based on the closing price of a Paired Share on the date of grant. Service-based awards vest over a period of one to three years, subject to the grantee’s continued employment or service. The grant-date fair value of awards with performance vesting conditions is based on the closing price of a Paired Share on the date of grant. Equity-based compensation expense with respect to these awards is adjusted over the vesting period to reflect the probability of achievement of performance targets defined in the award agreements. These awards vest over a one-year period, subject to the grantee’s continued employment, with the ability to earn Paired Shares in a range of 0% to 200% of the awarded number of RSUs based on the achievement of defined performance targets. The grant-date fair value of awards with market vesting conditions is based on an independent third-party valuation. These awards vest at the end of a three-year period, subject to the grantee’s continued employment, with the ability to earn Paired Shares in a range of 0% to 150% of the awarded number of RSUs based on the total shareholder return of a Paired Share relative to the total shareholder return of other publicly traded lodging companies identified in the award agreements. During the year ended December 31, 2019, the grant-date fair value of awards with market vesting conditions were calculated using a Monte Carlo simulation model with the following key assumptions:
Expected holding period2.90 years
Risk–free rate of return2.46 %
Expected dividend yield5.12 %
ESH Hospitality, Inc.  
Entity Information [Line Items]  
Equity-Based Compensation EQUITY-BASED COMPENSATION
The Corporation and ESH REIT each maintain an LTIP, as amended and restated in 2015, approved by their shareholders. Under each LTIP, the Corporation and ESH REIT may issue to eligible employees or directors restricted stock units ("RSUs") or other equity-based awards in respect of Paired Shares with service, performance or market vesting conditions. The aggregate number of Paired Shares that may be the subject of awards under the LTIPs shall not exceed 8.0 million, of which no more than 4.0 million may be granted as incentive stock options. Each of the Corporation’s and ESH REIT’s LTIPs has a share reserve of an equivalent number of shares of Corporation common stock and ESH REIT Class B common stock. As of December 31, 2019, 4.6 million Paired Shares were available for future issuance under the LTIPs.
Equity-based compensation expense is recognized by amortizing the grant-date fair value on a straight-line basis over the requisite service period of each award. A portion of the grant-date fair value of all equity-based awards is allocated to a share of Corporation common stock and a portion is allocated to a share of ESH REIT Class B common stock. Equity-based compensation expense, which is included in general and administrative expenses in the accompanying consolidated statements of operations, was $0.5 million, $0.6 million and $0.4 million for the years ended December 31, 2019, 2018 and 2017, respectively.
As of December 31, 2019, there was $0.2 million of unrecognized compensation expense related to outstanding equity-based awards, which is expected to be recognized subsequent to December 31, 2019 over a weighted-average period of 0.4 years. Total unrecognized compensation expense will be adjusted for forfeitures.
ESH REIT will have to pay more or less for a share of the Corporation common stock at the time of settlement than it would have otherwise paid at the time of grant as the result of market changes in the value of a Paired Share between the time of grant and the time of settlement. An increase in the value allocated to a share of common stock of the Corporation due to market changes in the value of a Paired Share between the time of grant and the time of settlement is recorded as a distribution to the Corporation. A decrease in the value allocated to a share of common stock of the Corporation due to market changes in the value of a Paired Share between the time of grant and the time of settlement is recorded as additional paid in capital from the Corporation.
For all LTIP awards granted by the Corporation, ESH REIT will receive compensation for the fair value of the Class B shares on the date of settlement of such Class B shares by ESH REIT. As of December 31, 2019, the Corporation had granted a total of 4.7 million service-based, performance-based and market-based RSUs, of which 3.6 million RSUs were either forfeited or settled. As a counterparty to the remaining outstanding RSUs, ESH REIT is expected to issue and be compensated in cash for 1.1 million shares of Class B common stock of ESH REIT in future periods, assuming market-based awards vest at 100% and no forfeitures.
RSU activity, all of which relates to awards with service vesting conditions, during the years ended December 31, 2019, 2018 and 2017, was as follows:
Number of
RSUs
(in thousands)
Weighted-
Average Grant-
Date Fair
Value
Outstanding at January 1, 201728  $14.57  
Granted26  $17.56  
Settled(15) $13.66  
Forfeited—  $—  
Outstanding at December 31, 201739  $16.91  
Granted28  $19.48  
Settled(34) $17.32  
Forfeited—  $—  
Outstanding at December 31, 201833  $18.68  
Granted31  $17.32  
Settled(33) $18.68  
Forfeited—  $—  
Outstanding at December 31, 201931  $17.32  
Vested at December 31, 2019—  $—  
Nonvested at December 31, 201931  $17.32  
Vested at December 31, 2018—  $—  
Nonvested at December 31, 201833  $18.68