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Stock-Based Compensation
 12 Months Ended
Dec. 31, 2024
Share-Based Payment Arrangement [Abstract]  
Stock-Based Compensation
NOTE 14. Stock-Based Compensation
The Company offers certain employees the ability to purchase common stock of the Company and/or receive common stock options under its Amended and Restated Stock Incentive Plan (the “Plan”) that was approved by the stockholders. In connection with the IPO, the Company’s Board of Directors approved the agilon health, inc. 2021 Omnibus Equity Incentive Plan (the “Omnibus Incentive Plan”). As of December 31, 2024, the Company is authorized to grant 123.9 million shares related to employee stock options, of which 62.8 million shares remain available for grant as of December 31, 2024. Shares granted are not transferrable, except upon the employee’s death, repurchase by the Company, or with the Company’s consent.
The Omnibus Incentive Plan provides for the grant of stock options, restricted stock awards, restricted stock units (“RSUs”), performance-based awards, and other awards. Stock options expire 10 years after the date of grant and forfeiture of awards is recognized as it occurs. The stock options granted under the Plan generally consist of: (i) stock options that vest in four equal annual installments, subject to the employee’s continued service until the applicable vesting date (the “Base Options”), and (ii) stock options that vest if CD&R realizes a certain return on its investment, subject to the employee’s continuous employment through such date and beyond, in certain grants (the “Upside Options”).
Stock Options
Base Options. Compensation cost for Base Options is recognized on a straight-line basis generally over the requisite vesting period of four years. The fair value of each Base Option was estimated on the date of grant using the Black-Scholes option pricing model. Expected volatilities are based on the historical equity volatility of comparable publicly traded companies. The expected term of Base Options is calculated via the simplified method and reflects the midpoint between the vesting date and the end of the contractual term, as our historical share option exercise experience does not provide a reasonable basis upon which to estimate the expected term. The risk-free rates utilized for periods throughout the contractual life of Base Options are based on U.S. Treasury security yields at the time of grant.
The assumptions used for the Black-Scholes option pricing model to determine the fair value of Base Options granted are as follows:
December 31,
202420232022
Risk-free interest rate
4.45% -4.65%
3.43% - 4.37%
1.94% - 4.18%
Expected dividends$— $— $— 
Expected volatility
59.25% -59.43%
55.42% - 65.04%
48.66% - 64.29%
Expected term (in years)6.256.256.25
The Company’s outstanding Base Options consisted of the following (shares in thousands):
Shares Weighted-
Average
Exercise
Price		Weighted-
Average
Remaining
Contractual Term
(in years)		Aggregate
Intrinsic
Value
(in thousands)
Stock options outstanding as of January 1, 20249,430$8.23 
Granted2,5364.61 
Exercised(1,287)1.63 
Forfeited(1,516)13.48 
Stock options outstanding as of December 31, 20249,163$7.29 5.9$1,193 
Expected to vest as of December 31, 20243,159$8.73 8.4$— 
Exercisable as of December 31, 20246,004$6.53 4.7$1,193 
The weighted-average grant-date fair value of Base Options granted during the years ended December 31, 2024, 2023, and 2022 was $3.03, $15.30, and $13.83, respectively, per option. The total intrinsic value of Base Options exercised for the years ended December 31, 2024, 2023, and 2022 was $1.2 million, $27.0 million, and $140.8 million, respectively. During the year ended December 31, 2024, the Company recognized $8.3 million of stock-based compensation expense related to Base Options. During the year ended December 31, 2023, the total stock-based compensation expense related to Base Options was $10.0 million, of which $0.1 million is recorded in income (loss) from discontinued operations in the consolidated statements of operations. During the year ended December 31, 2022, the total stock-based compensation expense related to Base Options was $9.5 million, of which $0.2 million is recorded in income (loss) from discontinued operations in the consolidated statements of operations.
As of December 31, 2024, the Company had $11.8 million of total unrecognized compensation cost related to non-vested Base Options, which is expected to be recognized over a weighted-average period of approximately two years.
Upside Options. Upside Options vest if CD&R realizes a certain return on its investment, subject to the employee’s continuous employment through such date and beyond, in certain grants. During the years ended December 31, 2024, 2023, and 2022, the Company recognized $1.0 million, $1.6 million, and $1.7 million, respectively, of stock-based compensation expense related to Upside Options. The fair value of Upside Options was estimated on the date of grant using the Monte Carlo simulation model.
The Company’s outstanding Upside Options consisted of the following (shares in thousands):
Shares Weighted-
Average
Exercise Price		Weighted-
Average
Remaining
Contractual Term
(in years)		Aggregate
Intrinsic
Value
(in thousands)
Stock options outstanding as of January 1, 20247,826$7.31 
Exercised(221)3.00 
Forfeited(643)14.84 
Stock options outstanding as of December 31, 20246,962$6.75 3.6$— 
Expected to vest as of December 31, 2024572$10.54 5.4$— 
Exercisable as of December 31, 20246,390$6.41 3.4$— 
As of December 31, 2024, the Company had $0.3 million of total unrecognized compensation cost related to non-vested Upside Options, which is expected to be recognized over a weighted-average period of less than one year.
Restricted Stock Units
Restricted stock awards, including RSUs and performance stock units are granted subject to certain restrictions. Conditions of vesting are determined at the time of grant. The fair market value of RSUs, both time vesting and those subject to specific performance criteria, are expensed over the period of vesting. RSUs, which vest based solely upon passage of time and requisite service generally vest over the requisite period of four years. Performance stock units, which are RSUs that vest dependent upon attainment of various levels of performance that equal or exceed threshold levels, generally vest in their entirety at the end of the relevant performance period, generally three years. The number of shares that ultimately vest can vary from 0% to 200% of target depending on the level of achievement of the performance criteria. The fair value of RSUs and performance stock units are determined based on the closing market price of the Company’s shares on the grant date. The value of the shares withheld to settle tax withholding obligations is dependent on the closing market price of the Company’s common stock on the trading date prior to the relevant transaction occurring.
The following table summarizes employee restricted stock award activity, including performance stock units, for the year ended December 31, 2024 (units in thousands):
Restricted
Stock
Units 		Weighted-Average Grant-Date Fair Value
Unvested as of January 1, 20242,982$24.39 
Granted11,4164.68 
Vested(1,067)23.67 
Forfeited(2,259)9.73 
Unvested as of December 31, 202411,0727.13 
For the years ended December 31, 2024, 2023, and 2022, the Company recognized $18.0 million, $25.0 million (of which $0.1 million is recorded in income (loss) from discontinued operations in the consolidated statements of operations), and $9.6 million (of which $0.1 million is recorded in income (loss) from discontinued operations in the consolidated statements of operations), respectively, of stock-based compensation expense related to RSUs, including performance based units. The weighted-average grant-date fair value of RSUs granted during the years ended December 31, 2024, 2023, and 2022 was $4.68, $26.36, and $21.89, respectively. The total fair value of RSUs vested during 2024 was $25.3 million. As of December 31, 2024, the Company had $48.7 million of total unrecognized compensation cost related to RSUs, which is expected to be recognized over a weighted-average period of approximately three years.
Certain of the Company’s agreements provide for the granting of certain stock-based instruments to third parties (the “Physician Partners Equity Awards”). The Company’s Board of Directors approved 13.7 million shares to be granted as Physician Partners Equity Awards, of which 3.3 million shares remain available for grant as of December 31, 2024. The fair market value of restricted stock units, both time vesting and those subject to specific performance criteria, are expensed over the period of vesting. RSUs, which vest based solely upon passage of time and requisite service generally vest over the requisite period of two years. Performance stock units, which are restricted stock units that vest dependent upon attainment of various levels of performance that equal or exceed threshold levels, generally vest in their entirety at the end of the relevant performance period, from one to four years. The number of shares that ultimately vest can vary from 0% to 125% of target depending on the level of achievement of the performance criteria. The fair value of RSUs, including performance stock units, are determined based on the closing market price of the Company’s shares on the grant date. No shares are withheld to settle tax withholding obligations of the physician partners.
The following table summarizes Physician Partners Equity Awards activity, including performance stock units, for the year ended December 31, 2024 (units in thousands):
Restricted
Stock
Units 		Weighted-Average Grant-Date Fair Value
Unvested as of January 1, 20247,137$20.39 
Granted2,1398.65 
Vested(1,382)21.10 
Forfeited(1,108)22.39 
Unvested as of December 31, 20246,78616.24 
For the years ended December 31, 2024, 2023, and 2022 the Company recognized $23.4 million, $32.9 million, $7.6 million, respectively, of stock-based compensation expense related to Physician Partner Equity Awards. The weighted-average grant-date fair value of Physician Partner Equity Awards granted during the years ended December 31, 2024, 2023, and 2022 was $8.65, $16.99, and $21.93, respectively. As of December 31, 2024, the Company had $77.1 million of total unrecognized compensation cost related to Physician Partner Equity Awards, which is expected to be recognized over a weighted-average period of approximately three years.