Stock Incentive Plans

6 Months Ended

Jun. 30, 2024

Share-Based Payment Arrangement [Abstract]

During the first quarter of 2024, the Company granted performance-based restricted stock units (“PSUs”), under the 2021 Stock Option and Incentive Plan, to certain employees of the Company based on an initial target number. The final number of PSUs that may vest and settle depend upon the Company’s performance against pre-established performance metrics over a predefined performance period, contingent on the compensation committee’s approval of the level of achievement against the pre-established performance targets. The PSUs granted vest over three years and have a one year performance period with one-third of the PSUs subject to cliff vesting following the completion of the performance period then vesting in equal quarterly installments thereafter. Over the performance period, the number of PSUs that may be issued and the related share-based compensation expense that is recognized is adjusted upward or downward based upon the probability of achieving the approved performance targets against the performance metrics. Depending on the probability of achieving the pre-established performance targets, the number of PSUs issued could range from 0% to 200% of the target amount.

Executive Chairman Long-Term Performance Award

In April and May 2021, the Company’s board of directors granted the Company’s Executive Chairman and then-Chief Executive Officer equity incentive awards in the form of performance-based stock options covering 19,740,923 and 47,267 shares of the Company’s Class B common stock with an exercise price of $21.49 and $23.40 per share, respectively, (collectively, the “Executive Chairman Long-Term Performance Award”). The Executive Chairman Long-Term Performance Award vests upon the satisfaction of a specific service condition requiring service as either the Company’s Chief Executive Officer or Executive Chairman and the achievement of certain stock price hurdles over a seven year performance period following the expiration of the lock-up period associated with the Company’s initial public offering in 2021.

During the second quarter of 2024, the Company’s Executive Chairman stepped down from his role and transitioned to a non-employee director role on the board of directors causing the Executive Chairman Long-Term Performance Award to be forfeited per its terms resulting in a one-time reversal of share-based compensation expenses of $167.3 million, of which $157.7m related to expenses recognized in previous periods. The Company accounts for forfeitures as they occur.

A summary of the Company's stock option activity under the Plans is as follows:


	Number of Options	Weighted-Average Exercise Price per Share		Weighted-Average Remaining Contractual Life (Years)	Aggregate Intrinsic Value(1)
Balance as of December 31, 2023	36,671	$	16.09	7.45	$	24,481
Granted	—	0.00
Exercised	(130)	0.83
Canceled and forfeited (3)	(20,308)	21.39
Balance as of June 30, 2024	16,232	$	9.57	7.19	$	12,678
Exercisable as of June 30, 2024 (2)	11,869	$	10.55	6.72	$	13,839
Vested as of June 30, 2024	10,549	$	10.01	6.67	$	11,681

(1) Intrinsic value is calculated based on the difference between the exercise price of in-the-money stock options and the fair value of the common stock as of the respective balance sheet dates.

(2) The 2011 Plan allows for early exercise of stock options. Accordingly, options granted under this plan are included as exercisable stock options regardless of vesting status.

(3) The forfeiture of the Executive Chairman Long-Term Performance Award resulted in 19,788 options forfeited.

The following table presents the share-based compensation expense by award type recognized within the following line items in the Condensed Consolidated Statement of Operations and Comprehensive Loss and Condensed Consolidated Balance Sheet in the periods presented:


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024	2023
Restricted stock units	$	28,656	$	25,179	52,819	49,970
Stock options	5,974		5,309		12,585	12,793
Performance restricted stock units	1,368		—		1,608	—
Employee Stock Purchase Plan	293		410		592	1,013

Share-based compensation recorded within Compensation and benefits	36,291		30,898		67,604	63,776
Executive chairman long-term performance award	(157,738)		13,267		(144,617)	26,388
Property and equipment (capitalized internal-use software)	1,918		1,254		3,998	2,282
Total share-based compensation (benefit) expense	$	(119,529)	$	45,419	(73,015)	$	92,446

Unrecognized compensation costs by award type as of June 30, 2024:


	Unrecognized compensation costs		Weighted-average recognition period (in years)
Restricted stock units, inclusive of PSUs	$	248,071	2.2
Stock options	28,801		1.7

Total	$	276,872