Stock-Based Compensation

3 Months Ended

Mar. 31, 2023

Stock-Based Compensation [Abstract]

Stock-Based Compensation

Note 9 - Stock-Based Compensation

We recognize compensation expense on a pro rata straight-line basis over the requisite service period for stock-based compensation awards with both graded and cliff vesting terms. We recognize the cumulative effect of a change in the number of awards expected to vest in compensation expense in the period of change. We have not capitalized any portion of our stock-based compensation. Our forfeiture rate is based on actuals.

During the three months ended March 31, 2023 and 2022, we recognized $0.3 million and $0.4 million of stock-based compensation expense related to equity awards, respectively, under the fair value method.

During the three months ended March 31, 2023, we granted approximately 45,000 restricted stock units (“RSUs”) with an aggregate fair value of approximately $33 thousand. During the three months ended March 31, 2022, we granted approximately 14,000 time-based RSUs with an aggregate fair value of approximately $24 thousand, respectively. During the three months ended March 31, 2023, we vested 184,949 RSUs compared to 121,540 RSUs vested during the three months ended March 31, 2022. A portion of the time-based RSUs vest quarterly in equal amounts over the course of eight quarters, and the remainder vest annually in equal amounts over the course of one to three years.

GSE’s 1995 long-term incentive program (“LTIP”) provides for the issuance of performance-vesting and time-vesting RSUs to certain executives and employees. Vesting of the performance-vesting restricted stock units (“PRSU”) is contingent upon the employee’s continued employment and the Company’s achievement of certain performance goals during designated performance periods as established by the Compensation Committee of the Company’s Board of Directors. We recognize compensation expense, net of estimated forfeitures, for PRSUs on a straight-line basis over the performance period based on the probable outcome of achievement of the financial targets. At the end of each reporting period, we estimate the number of PRSUs that are expected to vest, based on the probability and extent to which the performance goals will be met, and take into account these estimates when calculating the expense for the period. If the number of shares expected to be earned changes during the performance period, we make a cumulative adjustment to compensation expense based on the revised number of shares expected to be earned.

During the three months ended March 31, 2023, there were no PRSUs granted compared to 800,000 during the three months ended March 31, 2022, including 200,000 cash-settled grants to employees. These grants are subject to multiple vesting criteria including reaching a 20-day VWAP of $1.94 prior to the expiration of the awards, and a time-vesting restriction, which will vest in equal portions over the next 15 quarters ending December 31, 2025. During the three months ended March 31, 2023, we vested 50,000 PRSUs, of which, 12,500 PRSUs were cash-settled, respectively. No PRSUs were vested during the three months ended March 31, 2022. The market vesting criteria was achieved in April 2022 for the 800,000 PRSUs which will fully vest over the next 11 quarters.

We did not grant any stock options for the three months ended March 31, 2023 and 2022.