Equity Incentive Plan

12 Months Ended

Dec. 31, 2022

Share-Based Payment Arrangement [Abstract]

Note 11 - Equity Incentive Plan

Stock Incentive Plan

The Broadmark Realty 2019 Stock Incentive Plan (the “Plan”) allows for the issuance of up to 5,000,000 stock options, stock appreciation rights, restricted stock awards, restricted stock units or other equity-based awards or any combination thereof to the directors, employees, consultants or any other party providing services to us. The Plan is administered by the compensation committee of our board of directors. As of December 31, 2022, there were 3,291,351 shares available to be awarded under the Plan.

Awards made to our employees and directors typically consist of restricted stock units (“RSUs”) with only a service vesting condition. Awards to certain of our employees contain both service vesting and market conditions and are referred to as performance restricted stock units (“pRSUs”).

The RSUs granted under the Plan generally vest from one to three years depending on the terms of the specific award. All RSUs awarded will be settled upon vesting in shares of our common stock.

For the Company's pRSUs, in addition to service conditions, the ultimate number of shares to be earned depends on the achievement of market-based performance conditions. The market-based performance conditions are based on the Company's achievement of a relative total shareholder return (“TSR”) performance requirement, on a percentile basis, compared to a defined group of peer companies over a three year performance period, or contingent upon achieving specific stock price milestones over a five year performance period.

The Company uses a Monte Carlo simulation model to determine the grant-date fair value of awards with market-based performance conditions. The weighted average fair value and assumptions used to value the pRSU awards granted with market-based performance conditions are as follows:


	Year Ended
	December 31, 2022			December 31, 2021
Performance share fair value	$	6.74		$	8.20
Risk-free interest rate		1.74	%		0.27	%
Expected volatility		30.48	%		25.71	%
Expected life (in years)		2.85			2.77
Expected dividend yield		9.82	%		8.13	%

Dividend equivalents are not accrued or paid on unvested equity awards that were granted to employees, executive officers and directors and accordingly those unvested equity awards are not considered participating securities.

If an award granted under the Plan expires or terminates, the shares subject to any portion of the award that expires or terminates without having been exercised or paid will again become available for the issuance of additional awards.

The following tables summarize the activity related to RSUs and pRSUs during 2022:


	Shares			Weighted Average Grant Date Fair Market Value
Unvested RSUs outstanding as of December 31, 2020		434,143
Granted		295,063		$	10.08
Vested		(231,053	)	$	10.61
Forfeited		(13,837	)	$	10.58
Unvested RSUs outstanding as of December 31, 2021		484,316
Granted		750,038		$	6.02
Vested		(285,853	)	$	10.01
Forfeited		(200,589	)	$	7.31
Unvested RSUs outstanding as of December 31, 2022		747,912


	Shares			Weighted Average Grant Date Fair Market Value
Unvested pRSUs outstanding as of December 31, 2020		—
Granted		113,958		$	8.20
Unvested pRSUs outstanding as of December 31, 2021		113,958
Granted		276,679		$	6.74
Forfeited		(182,976	)	$	7.07
Unvested pRSUs outstanding as of December 31, 2022		207,661

As of December 31, 2022, there was $4.1 million of net unrecognized compensation cost related to unvested stock-based compensation arrangements. This compensation will be recognized on a straight-line basis over a weighted-average recognition period of 1.5 years.