XML 71 R18.htm IDEA: XBRL DOCUMENT v3.24.0.1
Share-Based Compensation
 12 Months Ended
Dec. 31, 2023
Share-Based Payment Arrangement [Abstract]  
Share-Based Compensation

Note 11 — Share-Based Compensation

We have a stock award and incentive program to attract and retain employees and independent directors. As of December 31, 2023, approximately 18.9 million shares were available for issuance under the Second Amended and Restated 2015 Stock Award and Incentive Plan (the “2015 Plan”). The total number of shares available for issuance under this plan may increase due to any forfeiture, cancellation, exchange, surrender, termination or expiration of an award outstanding under the 2015 Plan. Awards under the 2015 Plan may be in the form of stock options, stock, and LTIP Units as authorized under the 2015 Plan. Our plans are administered by the Compensation and Human Resources Committee of the Board.

In connection with the Separation, we entered into an agreement to modify all outstanding awards granted to the holders of such awards. Each outstanding time or performance based Aimco award was converted into one share of Aimco Common Stock and one share of AIR common stock. Generally, all such Aimco equity awards retain the same terms and vesting conditions as the original Aimco equity awards immediately before the Separation.

Following the Separation, compensation expense related to these modified awards for the employees retained by us is incurred by Aimco. The compensation expense related to these modified awards for employees of AIR is incurred by AIR.

For the years ended December 31, 2023, 2022, and 2021, total compensation cost recognized for share-based awards was (in thousands):

 

 

 

2023

 

 

2022

 

 

2021

 

Share-based compensation expense (1)

 

$

9,221

 

 

$

6,441

 

 

$

3,377

 

Capitalized share-based compensation (2)

 

 

1,274

 

 

 

1,016

 

 

 

340

 

   Total share-based compensation (3)

 

$

10,495

 

 

$

7,457

 

 

$

3,717

 

 

(1)
Amounts are recorded in General and administrative expenses in our Consolidated Statements of Operations.
(2)
Amounts are recorded in Buildings and improvements in our Consolidated Balance Sheets.
(3)
Amounts are recorded in Additional paid-in capital and Common noncontrolling interests in Aimco Operating Partnership in our Consolidated Balance Sheets, and in General Partner and Special Limited Partner and Limited Partners in Aimco Operating Partnership's Consolidated Balance Sheets.

As of December 31, 2023, our share of total unvested compensation cost not yet recognized was $11.8 million. We expect to recognize this compensation cost over a weighted-average period of approximately 1.6 years. The aggregate fair value of the vested Restricted Stock Awards and LTIP I Units during each of the years ended December 31, 2023, 2022, and 2021 was $0.9 million, $0.6 million, and $0.6 million, respectively.

For our employees, we grant restricted stock awards and two forms of LTIP Units that are subject to time-based vesting and require continuous employment, typically over a period of three to five years from the grant date, and we refer to these awards as Time-Based Restricted Stock, Time-Based LTIP I Units, and Time-Based LTIP II Units. We also grant stock options, restricted stock awards, and two forms of LTIP Units, that vest conditioned on our total shareholder return (“TSR”), relative to identified indices over a forward-looking performance period of three years. We refer to these awards as TSR Stock Options, TSR Restricted Stock, TSR LTIP I Units, and TSR LTIP II Units. Earned TSR-based awards, if any, will generally vest over a period of three to four years from the grant date, based on continued employment. Vested LTIP II Units may be converted at the holders’ option to LTIP Units for a conversion metric over a term of 10 years. Our TSR Stock Options generally expire 10 years from the date of grant.

We recognize compensation cost associated with time-based awards ratably over the requisite service periods. We recognize compensation cost related to the TSR-based awards, over the requisite service period, commencing on the grant date. The value of the TSR-based awards takes into consideration the probability that the market condition will be achieved; therefore, previously recorded compensation cost is not adjusted in the event that the market condition is not achieved, and awards do not vest.

We had Time-Based Restricted Stock, Time-Based LTIP I Units, Time-Based LTIP II Units, TSR Stock Options, TSR Restricted Stock, TSR LTIP I Units and TSR LTIP II Units outstanding as of December 31, 2023. The following two tables summarize activity for equity compensation for the year ended December 31, 2023.

 

 

 

Unvested TSR Stock Options

 

 

Time-Based Restricted Stock Awards

 

 

TSR Restricted Stock Awards

 

 

 

 

Number of
Options

 

 

Weighted-Average
Exercise Price

 

 

Number of
Shares

 

 

Weighted-Average
Fair Value

 

 

Number of
Shares

 

 

Weighted-Average
Fair Value

 

 

Outstanding at beginning of year

 

 

529,967

 

 

$

6.78

 

 

 

2,154,138

 

 

$

6.78

 

 

 

460,745

 

 

$

8.45

 

 

Granted

 

 

—

 

 

 

—

 

 

 

442,162

 

 

 

7.52

 

 

 

525,704

 

 

 

7.51

 

 

Exercised

 

 

—

 

 

 

—

 

 

N/A

 

 

N/A

 

 

N/A

 

 

N/A

 

 

Vested

 

 

—

 

 

 

—

 

 

 

(87,587

)

 

 

7.68

 

 

 

(4,995

)

 

 

54.31

 

(1)

Forfeited

 

 

—

 

 

 

—

 

 

 

(33,533

)

 

 

7.23

 

 

 

—

 

 

 

—

 

(1)

Outstanding at end of year

 

 

529,967

 

 

$

6.78

 

 

 

2,475,180

 

 

$

6.87

 

 

 

981,454

 

 

$

7.71

 

 

(1) Weighted-average grant date fair value is based off pre-Separation values when the awards were granted.

 

 

 

Unvested LTIP I Units

 

 

Unvested TSR LTIP II Units

 

 

Unvested Time LTIP II Units

 

 

Convertible LTIP II Units

 

 

 

Number of
Units

 

 

Weighted-Average
Fair Value (1)

 

 

Number of
Units

 

 

Weighted-Average
Conversion
Metric

 

 

Number of
Units

 

 

Weighted-Average
Conversion
Metric

 

 

Number of
Units

 

 

Weighted-Average
Conversion
Metric

 

Outstanding at beginning of year

 

 

7,186

 

 

$

53.33

 

 

 

905,440

 

 

$

5.52

 

 

 

563,334

 

 

$

6.96

 

 

 

743,861

 

 

$

7.44

 

Granted

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Exercised

 

N/A

 

 

N/A

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Vested

 

 

(4,188

)

 

 

53.28

 

 

 

(3,429

)

 

 

6.12

 

 

 

(563,334

)

 

 

6.96

 

 

 

566,763

 

 

 

6.95

 

Forfeited

 

 

(704

)

 

 

53.44

 

 

 

(1,476

)

 

 

6.12

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Outstanding at end of year

 

 

2,294

 

 

$

53.39

 

 

 

900,535

 

 

$

5.51

 

 

 

—

 

 

$

—

 

 

 

1,310,624

 

 

$

7.23

 

(1) Weighted-average grant date fair value is based off pre-Separation values when the awards were granted.

 

The aggregate intrinsic values are calculated as the difference between the closing price of Aimco common stock on the last trading day of the year and the exercise price multiplied by the number of in-the-money TSR Stock Options and LTIP II Units had they all been exercised and converted, respectively, on December 31, 2023. The aggregate intrinsic values for those that were exercisable or convertible and unvested were $0.8 million and $2.6 million, respectively.

 

 

The following table summarizes the unvested equity, exercisable stock options and convertible LTIP II units issued to our employees and employees of AIR that are potentially dilutive to Aimco and Aimco Operating Partnership as of December 31, 2023 (in thousands, except shares):

 

 Awards

Aimco

 

 

AIR

 

 

 

Unvested Compensation Not Yet Recognized (1)

 

 Time-Based Stock Options

 

—

 

 

 

786,413

 

 

 

$

—

 

 TSR Stock Options (2)

 

529,967

 

 

 

21,035

 

 

 

 

371

 

 Time-Based Restricted Stock Awards

 

2,475,180

 

 

 

3,457

 

 

 

 

7,812

 

 TSR Restricted Stock Awards

 

981,454

 

 

 

9,773

 

 

 

 

3,574

 

 TSR LTIP I Units

 

2,294

 

 

 

—

 

 

 

 

—

 

 TSR LTIP II Units (2)

 

900,535

 

 

 

1,000,045

 

 

 

 

25

 

 Total awards

 

4,889,430

 

 

 

1,820,723

 

 

 

$

11,782

 

(1) Unvested compensation not yet recognized represents our compensation cost for our employees. Compensation costs related to shares issued to AIR employees are recognized by AIR.

(2) The weighted-average exercise price for stock options held by AIR employees is $4.59 per share. The weighted-average conversion metric for LTIP II Units held by AIR employees is $5.49 per unit.

Determination of Grant-Date Fair Value Awards

We estimated the fair value of TSR-based awards granted in 2023 and 2022 using a Monte Carlo simulation valuation method. Under this method, the prices of the indices and shares of our Common Stock were simulated through the end of the performance period. The correlation matrix between shares of our Common Stock and the indices, as well as the corresponding return volatilities, were developed based upon an analysis of historical data.

The following table includes the assumptions used for the valuation of TSR-based awards that were granted in 2023 and 2022.

 

 TSR Award Assumptions

 

2023

 

2022

 Grant date market value of a common share

 

$7.59

 

$6.96

 Risk-free interest rate

 

3.89%-4.73%

 

0.19%-1.38%

 Dividend yield

 

0%

 

0%

 Expected volatility

 

34.08%-36.19%

 

32.09%-33.04%

 Derived vesting period of TSR Restricted Stock

 

3.0

 

3.0

 Weighted average expected term of TSR Stock Options, TSR LTIP I Units, and TSR LTIP II Units

 

N/A

 

4.9