Equity-Based Compensation

3 Months Ended

Mar. 31, 2023

10. Equity-Based Compensation

Equity-based compensation expense under the RE/MAX Holdings, Inc. 2013 Omnibus Incentive Plan (the “Incentive Plan”), net of the amount capitalized in internally developed software, is as follows (in thousands):


	Three Months Ended
	March 31,
	2023		2022
Expense from time-based awards	$	2,504	$	3,848
Expense from performance-based awards^(a)		717		90
Expense from bonus to be settled in shares^(b)		1,230		1,699
Equity-based compensation expense	$	4,451	$	5,637

(a)

Expense recognized for performance-based awards is re-assessed each quarter based on expectations of achievement against the performance conditions. During the first quarter of 2022, the Company had a significant amount of forfeitures related to performance-based awards issued to the Company’s former CEO which, subsequent to his departure, will no longer vest.

(b)	A portion of the annual corporate bonus earned is to be settled in shares. These amounts are recognized as “Accrued liabilities” in the accompanying Condensed Consolidated Balance Sheets and are not included in “Additional paid-in capital” until the shares are issued.

Time-based Restricted Stock

The following table summarizes equity-based compensation activity related to time-based restricted stock units and restricted stock awards:


	Shares	Weighted average grant date fair value per share
Balance, January 1, 2023	611,102	$	32.23
Granted ^(a)	474,511	$	18.46
Shares vested (including tax withholding) ^(b)	(255,621)	$	30.62
Forfeited	(19,111)	$	26.65
Balance, March 31, 2023	810,881	$	24.81

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

As of March 31, 2023, there was $13.3 million of total unrecognized expense. This compensation expense is expected to be recognized over the weighted-average remaining vesting period of 2.0 years.

Performance-based Restricted Stock

The following table summarizes equity-based compensation activity related to performance-based restricted stock units:


	Shares	Weighted average grant date fair value per share
Balance, January 1, 2023	143,199	$	32.11
Granted ^(a)	174,418	$	20.53
Shares vested (including tax withholding) ^(b)	(24,122)	$	17.77
Forfeited	(22,778)	$	27.85
Balance, March 31, 2023	270,717	$	26.29

(a)	Represents the total participant target award.

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

As of March 31, 2023, there was $4.4 million of total unrecognized expense. This compensation expense is expected to be recognized over the weighted-average remaining vesting period of 1.7 years. The Incentive Plan expires on October 1, 2023 and during the first quarter, the Company’s Board of Directors approved a new 2023 Omnibus Incentive Plan (“2023 Plan”). The 2023 Plan is subject to approval by the Company’s stockholders in the 2023 annual meeting.