13. Equity-Based Compensation

The RE/MAX Holdings, Inc. 2013 Omnibus Incentive Plan (the “2013 Incentive Plan”) includes restricted stock units (“RSUs”) which may have time-based or performance-based vesting criteria. 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 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, net of the amount capitalized in internally developed software, is as follows (in thousands):


	Year Ended December 31,
	2018		2017		2016
Expense from Time-based RSUs	$	5,110	$	2,523	$	2,330
Expense from Performance-based RSUs		4,066		377		-
Equity-based compensation expense		9,176		2,900		2,330
Tax benefit from equity-based compensation		(1,297)		(637)		(511)
Excess tax benefit from equity-based compensation		(145)		(324)		(261)
Net compensation cost	$	7,734	$	1,939	$	1,558

Time-based Restricted Stock Units

Time-based RSUs are valued using the Company’s closing stock price on the date of grant. Grants awarded to the Company’s Board of Directors generally vest over a one-year period. Grants awarded to the Company’s employees, other than booj employees and former owners in connection with the acquisition, generally vest equally in annual installments over a three-year period. Grants awarded to booj employees and former owners in connection with the acquisition vest in three installments over a four-year period. Compensation expense is recognized on a straight-line basis over the vesting period.

The following table summarizes equity-based compensation activity related to time-based RSUs for the year ended December 31, 2018:


	Time-based restricted stock units		Weighted average grant date fair value per share
Balance, January 1, 2018	105,862	$	41.67
Granted	271,941	$	53.04
Shares vested (including tax withholding)(a)	(70,650)	$	41.50
Forfeited	(8,543)	$	44.82
Balance, December 31, 2018	298,610	$	51.97

(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, 2018, 2017 and 2016:


	Year ended December 31,
		2018		2017		2016
Weighted average grant date fair value per RSU granted	$	53.04	$	55.45	$	33.24

At December 31, 2018, there was $11.1 million of total unrecognized time-based RSU expense, all of which is related to unvested awards. This compensation expense is expected to be recognized over the weighted-average remaining vesting period of 2.65 years for time-based restricted stock units.

Performance-based Restricted Stock Units

Performance-based RSUs granted to employees, other than booj employees and former owners in connection with the acquisition, are stock-based awards in which the number of shares ultimately received depends on the Company’s achievement of a specified revenue target as well as the Company’s total shareholder return (“TSR”) relative to a peer company index over a three-year performance period. If threshold vesting conditions are not met, no shares will vest. If threshold vesting conditions are met, the number of shares that could be issued range from 0% to 150% of the participant’s target award. Performance-based RSUs are valued on the date of grant using a Monte Carlo simulation for the TSR element of the award. The Company’s expense will be adjusted based on the estimated achievement of revenue versus target. Earned performance-based RSUs cliff-vest at the end of the three-year performance period. Compensation expense is recognized on a straight-line basis over the vesting period based on the Company’s estimated performance, with cumulative to-date adjustments made when revenue performance expectations change.

Performance-based RSUs granted to booj employees and former owners in connection with the acquisition are stock-based awards in which the number of shares ultimately received depends on the achievement of certain technology milestones set forth in the related purchase agreement. The number of shares that could be issued range from 0% to 100% of the participant’s target award. The awards were valued using the Company’s closing stock price on the date of grant. The Company’s expense will be adjusted based on the estimated achievement of the milestones. Earned performance-based RSUs vest May 31, 2019 and November 1, 2019 to the extent the corresponding milestones are achieved and provided the participant is still an employee of the Company at the time of vesting. Compensation expense is recognized on a straight-line basis over the vesting period based on the Company’s estimated performance.

The following table summarizes equity-based compensation activity related to performance-based RSUs for year ended December 31, 2018:


	Performance-based restricted stock units		Weighted average grant date fair value per share
Balance, January 1, 2018	31,831	$	57.88
Granted (a)	156,694	$	55.38
Shares vested	(2,811)	$	56.59
Forfeited	(6,099)	$	57.06
Balance, December 31, 2018	179,615	$	55.75

(a)

Represents the total participant target award.

At December 31, 2018, there was $4.9 million of total unrecognized performance-based RSU expense, all of which is related to unvested awards. This compensation expense is expected to be recognized over the weighted-average remaining vesting period of 1.22 years for performance-based RSUs.

After giving effect to all outstanding awards (assuming maximum achievement of performance goals for performance-based awards), there were 2,285,200 additional shares available for the Company to grant under the 2013 Incentive Plan as of December 31, 2018.