Equity-Based Compensation

12 Months Ended

Dec. 31, 2016

Equity-Based Compensation

Equity-Based Compensation

13. Equity-Based Compensation

On September 30, 2013, the Company’s Board of Directors adopted the RE/MAX Holdings, Inc. 2013 Omnibus Incentive Plan (the “2013 Incentive Plan”), which authorized 2,365,793 shares. The 2013 Incentive Plan became effective on September 30, 2013 and provides for the grant of incentive stock options to the Company’s employees, and for the grant of shares of the RE/MAX Holdings Class A common stock, non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units (“RSUs”), dividend equivalent rights, cash-based awards and any combination thereof to employees, directors and consultants of the Company.

The Company recognizes equity-based compensation expense in “Selling, operating and administrative expenses” in the accompanying Consolidated Statements of Income. The Company recognizes corporate income tax benefits relating to the exercise of options and vesting of restricted stock units in “Provision for income taxes” in the accompanying Consolidated Statements of Income.

Employee stock-based compensation expense under the Company’s 2013 Incentive Plan was as follows (in thousands):

	Year Ended December 31,
	2016		2015		2014
Expense from RSUs	$	2,330	$	1,453	$	2,002
Excess tax benefit from share-based compensation		(261)		(2,770)		(736)
Net compensation cost (benefit)	$	2,069	$	(1,317)	$	1,266

Restricted Stock Units

The following table summarizes the Company’s activity for restricted stock units for the year ended December 31, 2016:

			Weighted average grant date
	Restricted Stock Units		fair value per share
Nonvested at January 1, 2016	96,765	$	30.80
Granted	89,359	$	33.24
Shares vested (including tax withholding) (a)	(53,779)	$	29.75
Forfeited	(5,334)	$	30.02
Nonvested at December 31, 2016	127,011	$	33.00

(a) Pursuant to the terms of the 2013 Incentive Plan, RSUs withheld by the Company for the payment of the employee's tax withholding related to an RSU vesting are added back to the pool of shares available for future awards.

The following table summarizes information about our RSU grants during the years ended December 31, 2016, 2015 and 2014:

		Year ended December 31,
		2016		2015		2014
Weighted average grant date fair value per RSU granted	$	33.24	$	32.45	$	-

As of December 31, 2016, there was $2,603,000 of total unrecognized stock-based compensation expense related to unvested RSUs. This compensation expense is expected to be recognized over the weighted-average remaining vesting period of 1.83 years.

At December 31, 2016, there were 2,168,516 additional shares available for the Company to grant under the 2013 Incentive Plan.

Stock Options

During 2012, RMCO adopted an equity-based compensation plan (the “Plan”) pursuant to which RMCO’s Board of Managers granted 31,500 RMCO Class B common unit options to certain employees. On October 1, 2013 and in connection with the IPO, the Class B common unit options were split 25 for 1 and then substituted for 787,500 options to acquire shares of RE/MAX Holdings’ Class A common stock.

The following table summarizes the Company’s stock option activity for the year ended December 31, 2016:

				Weighted Average
		Weighted Average		Remaining	Aggregate
	Options	Exercise Price		Contractual Term	Intrinsic Value
				(in years)	(in thousands)
Options Outstanding at January 1, 2016	28,057	$	3.60
Granted	—
Exercised	(28,057)	$	3.60
Forfeited	—
Options Outstanding at December 31, 2016	—			—	$	—
Exercisable at December 31, 2016	—			—	$	—

The Company received $101,000, $2,248,000 and $486,000 in cash proceeds related to the exercise of stock options during the years ended December 31, 2016, 2015 and 2014, respectively. Upon the exercise of stock options, shares of Class A common stock are issued from authorized common shares. The total intrinsic value of stock options exercised during the years ended December 31, 2016,  2015 and 2014 were $915,000,  $19,154,000 and $3,839,000 respectively.