Equity-Based Compensation

9 Months Ended

Sep. 30, 2019

Share-based Payment Arrangement [Abstract]

Equity-Based Compensation

8. Equity-Based Compensation

The board of directors of the Company (the "Board") adopted the 2014 Incentive Award Plan ("2014 Plan") to grant cash and equity incentive awards to eligible participants in order to attract, motivate and retain talent. The 2014 Plan is administered by the Board with respect to awards to non-employee directors and by the compensation committee of the Board with respect to other participants and provides for the issuance of stock options, stock appreciation rights ("SARs"), restricted stock, restricted stock units ("RSUs"), performance shares, stock payments, cash payments, dividend awards and other incentives. Prior to the adoption of the 2014 Plan, Wayfair LLC issued certain equity awards pursuant to the Wayfair LLC Amended and Restated Common Unit Plan (the "2010 Plan"), which was administered by the board of directors of Wayfair LLC. Awards issued under the 2010 Plan that remain outstanding currently represent Class A or Class B common stock of the Company.

8,603,066 shares of Class A common stock were initially available for issuance under awards granted pursuant to the 2014 Plan. The 2014 Plan also contains an evergreen provision whereby the shares available for future grant are increased on the first day of each calendar year beginning January 1, 2016 and ending on and including January 1, 2024. As of January 1, 2019, 6,202,378 shares of Class A common stock were available for future grant under the 2014 Plan. Shares or RSUs forfeited, withheld for minimum statutory tax obligations, and unexercised stock option lapses from the 2010 and 2014 Plans are available for future grant under the 2014 Plan.

The following table presents activity relating to stock options for the nine months ended September 30, 2019: 

	Options		Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (Years)
Outstanding at December 31, 2018	79,802		$	3.05	2.5
Options exercised	(28,624	)	$	3.14
Outstanding and exercisable at September 30, 2019	51,178		$	3.00	1.7

Intrinsic value of stock options exercised was $4.2 million for the nine months ended September 30, 2019. Aggregate intrinsic value of stock options outstanding and currently exercisable is $5.6 million. All stock options were fully vested at September 30, 2019.

The following table presents activity relating to restricted common stock for the nine months ended September 30, 2019: 

	Shares	Weighted- Average Grant Date Fair Value
Unvested at December 31, 2018	20,000	$	44.34
Unvested as of September 30, 2019	20,000	$	44.34

Aggregate intrinsic value of unvested restricted common stock is $2.2 million as of September 30, 2019. Unrecognized equity-based compensation expense related to unvested restricted common stock is $0.5 million with a weighted average remaining vesting term of 0.3 years as of September 30, 2019. 

The following table presents activity relating to RSUs for the nine months ended September 30, 2019: 

	Shares		Weighted- Average Grant Date Fair Value
Outstanding at December 31, 2018	7,970,959		$	72.43
RSUs granted	2,832,312		$	142.03
RSUs vested	(2,114,736	)	$	70.46
RSUs forfeited/canceled	(865,653	)	$	85.75
Outstanding as of September 30, 2019	7,822,882		$	96.69

The intrinsic value of RSUs vested was $290.5 million for the nine months ended September 30, 2019. Aggregate intrinsic value of RSUs unvested is $877.1 million as of September 30, 2019. Unrecognized equity-based compensation expense related to outstanding RSUs is $686.2 million with a weighted average remaining vesting term of 1.4 years at September 30, 2019.