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Stock-based Compensation
 12 Months Ended
Dec. 31, 2022
Share-Based Payment Arrangement [Abstract]  
Stock-based Compensation Stock-based Compensation
Vornado's 2019 Omnibus Share Plan (the “Plan") provides the Compensation Committee of Vornado's Board of Trustees (the "Committee") the ability to grant incentive and nonqualified Vornado stock options, restricted stock, restricted Operating Partnership units ("OP units"), out-performance plan awards ("OPPs"), appreciation-only long-term incentive plan units (“AO LTIP Units”), performance conditioned appreciation-only long-term incentive plan units ("Performance Conditioned AO LTIP Units") and long-term performance plan LTIP units ("LTPP Units") to certain of our employees and officers. Awards may be granted up to a maximum 5,500,000 shares, if all awards granted are Full Value awards, as defined in the Plan, and up to 11,000,000 shares, if all of the awards granted are Not Full Value Awards, as defined in the Plan. Full Value Awards are awards of securities, such as restricted shares, that, if all vesting requirements are met, do not require the payment of an exercise price or strike price to acquire the securities. Not Full Value Awards are awards of securities, such as options, that do require the payment of an exercise price or strike price. As of December 31, 2022, Vornado has approximately 2,803,000 shares available for future grants under the Plan, if all awards granted are Full Value Awards, as defined.
We account for all equity-based compensation in accordance with ASC Topic 718, Compensation - Stock Compensation. Below is a summary of our stock-based compensation expense, a component of "general and administrative" expense on our consolidated statements of income.
 (Amounts in thousands)For the Year Ended December 31,
 202220212020
OP Units$21,086 $27,698 $33,431 
LTPP Units5,145 — — 
OPPs1,906 8,629 9,579 
AO LTIP Units430 877 3,955 
Vornado stock options296 456 656 
Vornado restricted stock292 450 649 
Performance Conditioned AO LTIP Units94 219 407 
$29,249 $38,329 $48,677 
Below is a summary of unrecognized compensation expense for the year ended December 31, 2022.
(Amounts in thousands)As of
December 31, 2022		Weighted-Average
Remaining Contractual Term
OP Units$7,834 1.4
OPPs3,198 1.6
LTPP Units2,702 1.8
Vornado stock options175 1.0
Vornado restricted stock172 1.0
AO LTIP Units131 1.0
$14,212 1.5
14.     Stock-based Compensation - continued
LTPP Units
On January 12, 2022, the Committee approved the 2022 LTPP, a multi-year, LTIP units-based performance equity compensation plan. Awards under the 2022 LTPP are bifurcated between operational performance (50%) and relative performance (50%) measurements and may be earned at specified threshold, target and maximum levels.
The operational component awards may be earned based on Vornado’s 2022 operational performance in the following categories:
• FFO, as adjusted per share (75% weighting); and
• ESG performance metrics consisting of greenhouse emissions reductions, Global Real Estate Sustainability Benchmark ("GRESB") score and Green Building Certification (LEED) achievements (aggregate 25% weighting).
Any LTTP award units tentatively earned based on Vornado’s 2022 operational performance are subject to an absolute return modifier pursuant to which such award units are subject to a potential reduction (but not increase) of up to 30% if Vornado’s aggregate total three-year shareholder return (“TSR”) for 2022-2025 is below specified levels.
Awards under relative components may be earned based on Vornado’s three-year TSR, measured against the Dow Jones U.S. Real Estate Office Index (50% weighting) and a Northeast peer group custom index (50% weighting). Awards earned under the relative component of the LTPP are subject to reductions of up to 30% if Vornado’s three-year TSR is below specified levels.
If the designated performance objectives are achieved, awards earned under 2022 LTPP will vest 50% in January 2025 and 50% in January 2026. In addition, the Chief Executive Officer is required to hold any earned and vested awards for three years following each such vesting date and all other award recipients are required to hold such awards for one year following each such vesting date. Dividends on awards granted under the 2022 LTPP accrue during the applicable performance period and are paid to participants if awards are ultimately earned based on the achievement of the designated performance objectives. LTPP Units, if earned, become convertible into Class A units of the Operating Partnership (and ultimately into Vornado common shares) following vesting.
LTPP Units granted during the year ended December 31, 2022 had a total notional value of $17,025,000 and a fair value of $7,847,000, of which $4,033,000 was immediately expensed on the respective grant date due to acceleration of vesting for employees who are retirement eligible (have reached age 65 or age 60 with at least 20 years of service).
14.     Stock-based Compensation – continued
OPPs
OPPs are multi-year, performance-based equity compensation plans under which participants have the opportunity to earn a class of units (“OPP units”) of the Operating Partnership if, and only if, Vornado outperforms a predetermined total shareholder return (“TSR”) and/or outperforms the market with respect to a relative TSR during the three-year or four-year performance period. OPP units, if earned, become convertible into Class A units of the Operating Partnership (and ultimately into Vornado common shares) following vesting.
Below is the summary of the OPP units granted during the years December 31, 2021 and 2020.
Plan YearTotal Plan
Notional Amount		Percentage of Notional
Amount Granted
Grant Date
Fair Value(1)
OPP Units Earned
2021$30,000,000 99.1 %$9,950,000 To be determined in 2025
202035,000,000 94.0 %11,700,000 To be determined in 2023
________________________________________
(1)    During the years ended December 31, 2021 and 2020 $6,140,000 and $7,583,000, respectively, was immediately expensed on the respective grant date due to acceleration of vesting for employees who are retirement eligible (have reached age 65 or age 60 with at least 20 years of service).
Vornado Stock Options
Vornado stock options are granted at an exercise price equal to the average of the high and low market price of Vornado’s common shares on the NYSE on the date of grant, generally vest over four years and expire ten years from the date of grant. Compensation expense related to Vornado stock option awards is recognized on a straight-line basis over the vesting period.
Below is a summary of Vornado’s stock option activity for the year ended December 31, 2022.
SharesWeighted-
Average
Exercise
Price		Weighted-
Average
Remaining
Contractual
Term		Aggregate
Intrinsic
Value
Outstanding as of December 31, 2021191,933 $65.27   
Exercised(197)36.72   
Forfeited(1,413)53.42 
Expired(13,618)65.86   
Outstanding as of December 31, 2022176,705 $65.35 4.99$— 
Options exercisable as of December 31, 2022140,031 $68.25 4.48$— 
There were no Vornado stock options granted during the years ended December 31, 2022 and 2021. The fair value of each option grant is estimated on the date of grant using an option-pricing model with the following weighted-average assumptions for grants in the year ended December 31, 2020.
As of December 31, 2020
Expected volatility
35% - 36%
Expected life5.0 years
Risk free interest rate
0.57% - 1.76%
Expected dividend yield
3.2% - 3.4%
The weighted average grant date fair value per share for options granted during the year ended December 31, 2020 was $12.28. Cash received from option exercises for the years ended December 31, 2022, 2021 and 2020 was $7,000, $22,000 and $3,516,000, respectively. The total intrinsic value of options exercised during the years ended December 31, 2022, 2021 and 2020 was $842, $5,500 and $859,000, respectively.
14.     Stock-based Compensation – continued
Performance Conditioned AO LTIP Units
Performance Conditioned AO LTIP Units are AO LTIP Units that require the achievement of certain performance conditions by a specified date or they are forfeited. The performance-based condition is met if Vornado common shares trade at or above 110% of the grant price per share for any 20 consecutive days on or before the fourth anniversary following the date of grant. If the performance conditions are not met, the awards are forfeited. If the performance conditions are met, once vested, the awards may be converted into Class A Operating Partnership units in the same manner as AO LTIP Units until ten years from the date of grant. On January 14, 2023, the outstanding Performance AO LTIPs, which were issued in 2019, were forfeited as the performance conditions were not satisfied.
AO LTIP Units
AO LTIP Units are a class of partnership interests in the Operating Partnership that are intended to qualify as “profits interests” for federal income tax purposes and generally only allow the recipient to realize value to the extent the fair market value of a Vornado common share exceeds the threshold level set at the time the AO LTIP Units are granted, subject to any vesting conditions applicable to the award. The threshold level is intended to be equal to 100% of the then fair market value of a Vornado common share on the date of grant. The value of vested AO LTIP Units is realized through conversion of the AO LTIP Units into Class A Operating Partnership units. AO LTIP Units have a term of ten years from the grant date. Each holder will generally receive special income allocations in respect of an AO LTIP Unit equal to 10% (or such other percentage specified in the applicable award agreement) of the income allocated in respect of a Class A Unit. Upon conversion of AO LTIP Units to Class A Units, holders will be entitled to receive in respect of each such AO LTIP Unit, on a per unit basis, a special distribution equal to 10% (or such other percentage specified in the applicable award agreement) of the distributions received by a holder of an equivalent number of Class A Units during the period from the grant date of the AO LTIP Units through the date of conversion.
Below is a summary of AO LTIP Units activity for the year ended December 31, 2022.
SharesWeighted-
Average
Exercise
Price		Weighted-
Average
Remaining
Contractual
Term		Aggregate
Intrinsic
Value
Outstanding as of December 31, 2021567,739 $59.91  
Forfeited(886)54.16 
Expired(1,189)56.29  
Outstanding as of December 31, 2022565,664 $59.93 6.29$— 
Options exercisable as of December 31, 2022437,372 $61.39 6.12$— 
There were no AO LTIP Units granted during the years ended December 31, 2022 and 2021. AO LTIP Units granted during the year ended December 31, 2020 had a fair value of $4,319,000. The fair value of each AO LTIP Unit granted is estimated on the date of grant using an option-pricing model with the following weighted-average assumptions for grants in the year ended December 31, 2020.
As of December 31, 2020
Expected volatility
35% - 36%
Expected life5.0 years
Risk free interest rate
0.57% - 1.76%
Expected dividend yield
3.2% - 3.4%
14.     Stock-based Compensation – continued
OP Units
OP Units are granted at the average of the high and low market price of Vornado’s common shares on the NYSE on the date of grant, vest ratably over four years and are subject to a taxable book-up event, as defined. Compensation expense related to OP Units is recognized ratably over the vesting period using a graded vesting attribution model. Distributions paid on unvested OP Units amounted to $2,197,000, $2,634,000 and $5,316,000 in the years ended December 31, 2022, 2021 and 2020, respectively.
Below is a summary of restricted OP unit activity for the year ended December 31, 2022.
Unvested UnitsUnitsWeighted-Average
Grant-Date
Fair Value
Unvested as of December 31, 20211,083,087 $53.99 
Granted501,169 30.82 
Vested(597,292)42.12 
Forfeited(1,048)44.25 
Unvested as of December 31, 2022985,916 49.41 
OP Units granted in 2022, 2021 and 2020 had a fair value of $15,446,000, $26,194,000 and $18,013,000, respectively. The fair value of OP Units that vested during the years ended December 31, 2022, 2021 and 2020 was $25,158,000, $36,541,000 and $24,373,000, respectively
Vornado Restricted Stock
Vornado restricted stock awards are granted at the average of the high and low market price of Vornado’s common shares on the NYSE on the date of grant and generally vest over four years. Compensation expense related to Vornado’s restricted stock awards is recognized on a straight-line basis over the vesting period. Dividends paid on unvested Vornado restricted stock are charged directly to retained earnings and amounted to $18,000, $35,000 and $98,000 for the years ended December 31, 2022, 2021 and 2020, respectively.
Below is a summary of Vornado’s restricted stock activity for the year ended December 31, 2022.
Unvested SharesSharesWeighted-Average
Grant-Date
Fair Value
Unvested as of December 31, 202115,774 $57.82 
Vested(7,069)60.57 
Forfeited(326)54.55 
Unvested as of December 31, 20228,379 55.64 
There were no Vornado restricted stock awards granted during the years ended December 31, 2022 and 2021. Vornado restricted stock awards granted in 2020 had a fair value of $853,000. The fair value of restricted stock that vested during the years ended December 31, 2022, 2021 and 2020 was $428,000, $567,000 and $602,000, respectively