XML 39 R17.htm IDEA: XBRL DOCUMENT v3.22.4
Equity Based Compensation
 12 Months Ended
Dec. 31, 2022
Share-Based Payment Arrangement [Abstract]  
Equity Based Compensation Equity Based Compensation
Equity Incentive Plan
In 2018, the Company adopted an equity incentive plan (the “Equity Incentive Plan”), which provides for the grant of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, other stock awards, performance awards and LTIP units. Officers, employees, non-employee directors, consultants, independent contractors and agents who provide services to the Company or to any subsidiary of the Company are eligible to receive such awards. A maximum of 3,550,000 shares may be issued under the Equity Incentive Plan, subject to certain conditions.
The following table presents information about the Company's restricted stock awards ("RSAs") and restricted stock units ("RSUs") during the years ended December 31, 2022, 2021 and 2020:
Restricted Stock Awards
Restricted Stock Units
SharesWtd. Avg. Grant Date Fair ValueUnitsWtd. Avg. Grant Date Fair Value
Unvested, January 1, 2020492,701 $13.72 100,814 $22.80 
Granted3,658 15.68 269,017 24.99 
Vested(255,761)13.73 (42,658)21.00 
Forfeited— — (5,571)— 
Unvested, December 31, 2020240,598 $13.73 321,602 $25.27 
Unvested, January 1, 2021240,598 $13.73 321,602 $25.27 
Granted— — 213,686 31.78 
Vested(221,694)13.70 (72,879)18.83 
Forfeited— — (7,717)23.52 
Unvested, December 31, 202118,904 $14.12 454,692 $29.39 
Unvested, January 1, 202218,904 $14.12 454,692 $29.39 
Granted— — 607,347 29.08 
Vested(9,865)14.12 (243,640)25.70 
Forfeited— — (1,019)27.25 
Unvested, December 31, 20229,039 $14.12 817,380 $30.26 
Restricted Stock Awards
On June 25, 2018, an aggregate of 691,290 shares of RSAs were issued to the Company's directors, executive officers and other employees under the Equity Incentive Plan. These RSAs vested over periods ranging from one year to three years from the date of grant, subject to the individual recipient's continued provision of service to the Company through the applicable vesting dates.
In January 2019, RSAs relating to an aggregate of 46,368 shares of unvested restricted common stock were granted to the Company's executive officers, other employees and an external consultant under the Equity Incentive Plan. These RSAs vest over periods ranging from one year to four years from the date of grant, subject to the individual recipient's continued provision of service to the Company through the applicable vesting dates. In June 2020, additional RSAs relating to an aggregate of 3,658 shares of unvested restricted common stock were granted to certain members of the Company's board of directors which vested immediately upon grant. The Company estimates the grant date fair value of RSAs granted under the Equity Incentive Plan using the average market price of the Company's common stock on the date of grant.
The following table presents information about the Company's RSAs for the periods presented: 
Year ended December 31,
(in thousands)202220212020
Compensation cost recognized in general and administrative expense$128 $1,548 $3,405 
Dividends declared on unvested RSAs and charged directly to distributions in excess of cumulative earnings8 70 279 
Fair value of shares vested during the period139 3,037 3,512 
The following table presents information about the Company's RSAs as of the dates presented: 
December 31,
(Dollars in thousands)20222021
Total unrecognized compensation cost$2 $130 
Weighted average period over which compensation cost will be recognized (in years)0.11.0
Restricted Stock Units
In 2019, 2020, 2021, and 2022, the Company issued target grants of 119,085, 84,684, 126,353, and 149,699 performance-based RSUs, respectively, to members of the Company's senior management team under the Equity Incentive Plan. Of these awards, 75% are non-vested RSUs for which vesting percentages and the ultimate number of units vesting will be calculated based on the total shareholder return ("TSR") of the Company's common stock as compared to the TSR of peer companies identified in the grant agreements. The payout schedule can produce vesting percentages ranging from 0% to 250% of target. TSR is calculated over the performance period for each award based upon the average closing price for the 20-trading day period ending December 31st of the year prior to grant divided by the average closing price for the 20-trading day period ending December 31st of the third year following the grant. The target number of units is based on achieving a TSR equal to the 50th percentile of the peer group. The Company records expense on these TSR RSUs based on achieving the target.
The grant date fair value of the TSR RSUs was measured using a Monte Carlo simulation model based on the following assumptions:
Grant Year
202220212020
Volatility
54%
55%
20%
Risk free rate
1.68%
0.20%
1.61%
The remaining 25% of these performance-based RSUs vest based on the Compensation Committee's subjective evaluation of the individual recipient's achievement of certain strategic objectives over the performance period of the award. In May 2020, the Compensation Committee evaluated and subjectively awarded 7,596 of these RSUs to a former executive officer of the Company, which vested immediately. In January 2022, the Compensation Committee identified specific performance targets and completed its subjective evaluation in relation to the performance-based RSUs granted in 2019 and concluded that 78,801 RSUs should be awarded. 50% of these RSUs vested immediately and the remaining 50% vested on December 31, 2022. During the year ended December 31, 2022, the Company recorded $2.1 million of compensation expense with respect to these performance-based RSUs granted in 2019. As of December 31, 2022, the Compensation Committee had not identified specific performance targets relating to the individual recipients' achievement of strategic objectives for the subjective awards granted in 2020, 2021 and 2022. As such, these awards do not have either a service inception or
a grant date for GAAP accounting purposes and the Company recorded no compensation expense with respect to this portion of the performance-based RSUs during the years ended December 31, 2022, 2021 and 2020.
In June 2020 and May 2021, the Company issued 26,817 and 16,765 RSUs, respectively, to the Company's independent directors. These awards vested in full on the earlier of one year from the grant date or the first annual meeting of stockholders that occurs after the grant date, to the individual recipient's continued provision of service to the Company through the applicable vesting date. The Company estimated the grant date fair value of these RSUs using the average market price of the Company's common stock on the date of grant.
In 2020, 2021 and 2022, the Company issued an aggregate of 157,943, 118,921 and 199,793 RSUs, respectively, to the Company’s executive officers, other employees and directors under the Equity Incentive Plan. These awards vest over a period of up to five years from the date of grant, subject to the individual recipient’s continued provision of service to the Company through the applicable vesting dates.
In January 2022, the Company issued 69,372 performance-based RSUs (at target) to an executive officer
under the Equity Incentive Plan. These RSUs vest based on the compound annual growth rate of the Company's
adjusted funds from operations ("AFFO CAGR") over a five year performance period, and the payout schedule can
produce vesting percentages ranging from 0% to 200% of target. To the extent the performance goal is achieved,
these performance-based RSUs will vest in 50% increments on each of the four-year and five-year anniversary of
the grant date, subject to the recipient's continued provision of service to the Company through the applicable
vesting dates. As of December 31, 2022, based on its AFFO CAGR forecasts, the Company believes it is probable
that the maximum performance level will be achieved and recorded $0.9 million of compensation
expense based off of this estimate during the year ended December 31, 2022.
A portion of the RSUs that vested in 2022 and 2021 were net share settled such that the Company withheld shares with a value equal to the relevant employee's income and employment tax obligations with respect to the vesting and remitted a cash payment to the appropriate taxing authorities.
The following table presents information about the Company's RSUs for the periods presented:
Year ended December 31,
(in thousands)202220212020
Compensation cost recognized in general and administrative expense$9,361 $4,135 $2,672 
Dividend equivalents declared and charged directly to distributions in excess of cumulative earnings366 241 125 
Fair value of units vested during the period6,262 1,372 896 
The following table presents information about the Company's RSUs as of the dates presented:
December 31,
(Dollars in thousands)20222021
Total unrecognized compensation cost$13,761 $7,735 
Weighted average period over which compensation cost will be recognized (in years)2.82.3