During the three months ended March 31, 2023, we issued an aggregate of 302,015 restricted shares of common stock to certain non-executive employees under the Paycom Software, Inc. 2014 Long-Term Incentive Plan (as amended, the “2014 LTIP”), consisting of 87,618 shares subject to market-based vesting conditions (“Market-Based Shares”) and 214,397 shares subject to time-based vesting conditions (“Time-Based Shares”). Market-Based Shares will vest 50% on the first date, if any, that the arithmetic average of the Company’s volume weighted average price on each of the twenty consecutive trading days immediately preceding such date (the “VWAP Value”) equals or exceeds $404 per share and 50% on the first date, if any, that the Company’s VWAP Value equals or exceeds $466 per share, in each case provided that (i) such date occurs on or before the eighth anniversary of the grant date and (ii) the recipient is employed by, or providing services to, the Company on the applicable vesting date, and subject to the terms and conditions of the 2014 LTIP and the applicable restricted stock award agreement. Of the 214,397 Time-Based Shares granted to non-executive employees, 213,397 will vest 21% on a specified initial vesting date, 21% on the first anniversary of such initial vesting date, 25% on the second anniversary of such initial vesting date, and 33% on the third anniversary of such initial vesting date, provided that the recipient is employed by, or providing services to, the Company on the applicable vesting date, and subject to the terms and conditions of the 2014 LTIP and the applicable restricted stock award agreement.

The following table summarizes restricted stock awards activity for the three months ended March 31, 2023:


	Time-Based					Market-Based
	Restricted Stock Awards					Restricted Stock Awards
	Shares			Weighted Average Grant Date Fair Value		Shares			Weighted Average Grant Date Fair Value
Unvested shares of restricted stock outstanding at December 31, 2022		479.1		$	315.04		1,677.0		$	116.36
Granted		214.4		$	337.44		87.6		$	316.12
Vested		(1.4	)	$	234.93		—		$	—
Forfeited		(22.3	)	$	330.68		(5.6	)	$	296.37
Unvested shares of restricted stock outstanding at March 31, 2023		669.8		$	321.86		1,759.0		$	125.74

In February 2023, we issued, in the aggregate, 5,232 shares of common stock upon the vesting of performance-based restricted stock units ("PSUs") awarded to certain executive officers in February 2021. The number of shares delivered upon vesting of the PSUs was determined based on the Company’s achievement of a Relative Total Stockholder Return ("Relative TSR") performance goal, which compared the Company’s Total Stockholder Return ("TSR") to the TSR of a peer group for the two-year performance period that commenced on January 1, 2021 and ended on December 31, 2022.

For purposes of the PSU awards, TSR was determined by dividing (i) the sum of (A) the average VWAP of a share of the Company's common stock or the common stock of a peer company, as applicable, during the final 60 trading day period of the

applicable performance period, less (ii) the average VWAP of a share of the Company's common stock or the common stock of a peer company, as applicable, during the 60 trading day period ending on December 31, 2020, plus (iii) the sum of all dividends which are paid by the Company (or the member of the peer group) to its stockholders, assuming such dividends are reinvested in the applicable company through the applicable performance period, by (ii) the average VWAP of a share of the Company's common stock or the common stock of a peer company, as applicable, during the 60 trading day period ending on December 31, 2020. For purposes of the PSU awards granted in 2021, the Company’s peer group includes 34 publicly traded companies, which were reflective of the S&P 500 Software & Services index on the grant date.

The following table summarizes restricted stock unit activity for the three months ended March 31, 2023:


	Time RSUs				PSUs
	Units		Weighted Average Grant Date Fair Value Per Unit		Units			Weighted Average Grant Date Fair Value Per Unit
Unvested restricted stock units outstanding at December 31, 2022		0.5	$	377.01		77.8		$	409.13
Granted		—	$	—		—		$	—
Vested		—	$	—		(5.2	)	$	526.66
Forfeited		—	$	—		(3.5	)	$	526.66
Unvested restricted stock units outstanding at March 31, 2023 (1)		0.5	$	377.01		69.1		$	394.29

(1)

A maximum of 172,680 shares could be delivered upon settlement of PSUs based upon Paycom’s Relative TSR over the applicable performance periods.

For the three months ended March 31, 2023 and 2022, our total stock-based compensation expense was $27.8 million and $22.1 million, respectively.

The following table presents the unrecognized compensation cost and the related weighted average recognition period associated with unvested restricted stock awards and unvested restricted stock units awards as of March 31, 2023.


	Restricted Stock		Restricted Stock
	Awards		Units
Unrecognized compensation cost	$	276,652	$	10,841
Weighted average period for recognition (years)		2.8		1.3

We capitalized stock-based compensation costs related to software developed for internal use of $3.6 million and $1.9 million for the three months ended March 31, 2023 and 2022, respectively.