Stock-based Payments and Director Fees

6 Months Ended

Jun. 30, 2023

Share-Based Payment Arrangement [Abstract]

Pursuant to the terms of the Management Agreement, the Company may pay a portion of the base management fee to the Manager in shares of its common stock with the number of shares determined based on the average of the closing prices of its common stock on the NYSE on the five business days preceding the record date of the most recent regular quarterly dividend to holders of the common stock. The Company recognized a base management fee to the Manager for the three and six months ended June 30, 2023 of $2.0 million and $3.8 million, respectively, of which zero was settled in shares of its common stock. Comparatively, for the three and six months ended June 30, 2022, the Company recognized a base management fee of $2.2 million and $4.5 million, respectively. For the three months ended June 30, 2022, the Company issued zero shares of its common stock; however, for the six months ended June 30, 2022, 39,558 shares of its common stock were issued in satisfaction of a component of the base management fee for the fourth quarter of 2021 that was approved by the Board during the first quarter of 2022.

During the three and six months ended June 30, 2023, the Company recorded no incentive fee. Comparatively, during the three and six months ended June 30, 2022, the Company recorded an incentive fee of $0.1 million and $0.3 million, respectively, of which none was settled in shares of its common stock.

Additionally, each of the Company’s independent directors received an annual retainer of $140,000, payable quarterly, 50% of which is payable in shares of the Company's common stock and 50% in cash. However, the Company has the option to pay the annual retainer with up to 100% in cash at its discretion, and pay the remainder in shares of its common stock. The chairpersons of the Compensation and Corporate Governance committees each received an annual retainer of $15,000, payable quarterly, 100% in cash. The chairperson of the Audit committee received an annual fee of $20,000, payable quarterly, 100% in cash.

The following table sets forth the Company’s stock-based management fees and independent director fees ($ in thousands):

Stock-based Management Fees and Director Fees


	For the three months ended June 30,
	2023				2022
	Number of shares	Amount of expense recognized			Number of shares	Amount of expense recognized
Independent director fees	—	$	—	(1)	9,585	$	87
Totals	—	$	—		9,585	$	87

(1)Independent director fees for the three months ended June 30, 2023, will be settled 100% in cash.


	For the six months ended June 30,
	2023			2022
	Number of shares	Amount of expense recognized		Number of shares	Amount of expense recognized
Independent director fees	13,020	$	88	17,350	$	175
Management fees	—	—		39,558	—		(1)
Totals	13,020	$	88	56,908	$	175

(1)Management fees for the six months ended June 30, 2022, were fully expensed during the fourth quarter of 2021, the period in which the services were provided. However, the shares associated with these services were approved and issued by the Board during the first quarter of 2022.

Restricted Stock

The Company periodically grants shares of its common stock to employees of its Manager and Servicer. The Company granted 22,459 and 25,459 shares of its common stock in the three and six months ended June 30, 2023, respectively, which have vesting periods of up to four years. Comparatively, the Company granted 21,500 and 44,265 shares of its common stock to employees of its Manager and Servicer in the three and six months ended June 30, 2022, respectively, which have vesting periods of up to four years. Grants of restricted stock use grant date fair value of the stock as the basis for measuring the cost of the grant.

Each independent member of the Company's Board of Directors is issued a restricted stock award of 2,000 shares of the Company’s common stock upon joining the Board. Additionally, the Company may issue grants of its shares of common stock from time to time to its directors.

Under the Company’s 2014 Director Equity Plan and 2016 Equity Incentive Plan the Company made grants of restricted stock to its Directors and to employees of its Manager and Servicer as set forth in the table below:


	Employee and Service Provider Grants				Director Grants
	Shares		Weighted Average Grant Date Fair Value		Shares		Weighted Average Grant Date Fair Value
Six months ended June 30, 2022
December 31, 2021 outstanding unvested share grants	228,365		$	12.00	8,000		$	12.60
Shares vested	—		—		—		—
Shares forfeited	(17,335)		11.93		—		—
Shares granted	22,765		11.42		—		—
March 31, 2022 outstanding unvested share grants	233,795		$	11.95	8,000		$	12.60
Shares vested	—		—		(8,000)		12.60
Shares forfeited	(17,668)		11.88		—		—
Shares granted	21,500		10.50		—		—
June 30, 2022 outstanding unvested share grants	237,627	(1)	$	11.82	—	(2)	$	—

(1)Weighted average remaining life of unvested shares for employee and service provider grants at June 30, 2022 is 2.3 years.

(2)Director shares were fully vested at June 30, 2022.


	Employee and Service Provider Grants				Director Grants
	Shares		Weighted Average Grant Date Fair Value		Shares		Weighted Average Grant Date Fair Value
Six months ended June 30, 2023
December 31, 2022 outstanding unvested share grants	310,262		$	10.98	—		$	—
Shares vested	(30,515)		11.56		—		—
Shares forfeited	(5,668)		10.30		—		—
Shares granted	3,000		7.34		25,000		7.15
March 31, 2023 outstanding unvested share grants	277,079		$	10.88	25,000		$	7.15
Shares vested	(9,475)		11.25		—		—
Shares forfeited	(7,084)		11.16		—		—
Shares granted	22,459		6.50		—		—
June 30, 2023 outstanding unvested share grants	282,979	(1)	$	10.52	25,000	(2)	$	7.15

(1)Weighted average remaining life of unvested shares for employee and service provider grants at June 30, 2023 is 2.0 years.

(2)Weighted average remaining life of unvested shares for director grants at June 30, 2023 is 1.7 years.

The following table presents the expenses for the Company's restricted stock plan ($ in thousands):


	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022
Restricted stock grants	$	284	$	268	$	801	$	493
Director grants	7		8		14		33
Total expenses for plan grants	$	291	$	276	$	815	$	526