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Share-based Compensation | 12 Months Ended
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Dec. 31, 2022
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] |
Share-based Compensation | (11) Share-based Compensation 2013 Equity Plan The 2013 Equity Plan authorizes the issuance of various types of share-based awards to the Company’s employees, officers, directors, and other eligible participants. In 2021, the Board of Directors authorized and the stockholders approved an amendment to the 2013 Equity Plan to increase the total number of shares of the Company’s class A common stock authorized for issuance under the 2013 Equity Plan from 2,300,000 shares to 2,750,000 shares. As of December 31, 2022, there were 75,662 shares of class A common stock reserved and available for future issuance under the 2013 Equity Plan. Under the 2013 Equity Plan, the Company has issued stock option awards, share-settled restricted stock units, other stock-based awards, and cash-settled restricted stock units. Regardless of the type of award issued, any shares issued under the 2013 Equity Plan may consist in whole or in part of authorized but unissued shares or treasury shares. No awards may be issued more than 10 years after the 2013 Equity Plan’s effective date. In determining related share-based compensation expense for any award under the 2013 Equity Plan, the Company has made an accounting policy election to account for forfeitures of awards as they occur and therefore share-based compensation expense presented below has not been adjusted for any estimated forfeitures. Stock option awards Stock options that are granted under the 2013 Equity Plan must have an exercise price equal to at least the fair market value of the Company’s class A common stock on the date of grant, become exercisable as established by the Board of Directors or the Compensation Committee, and expire no later than 10 years following the date of grant. The Company recognizes share-based compensation expense associated with such stock option awards on a straight-line basis over the award’s requisite service period (generally, the vesting period). The stock option awards granted to date vest in equal annual installments over an approximately four-year vesting period (unless accelerated in connection with a change in control event under specified conditions as set forth in the applicable option agreement or otherwise in accordance with provisions of the 2013 Equity Plan or applicable option agreement). Share-based compensation expense related to stock option awards is based on the fair value of the stock option awards on the date of grant, as estimated using the Black-Scholes valuation model. The Black-Scholes valuation model requires the input of certain management assumptions, including the expected term, expected stock price volatility, risk-free interest rate, and expected dividend yield. The Company estimates the term over which option holders are expected to hold their stock options by using the simplified method for “plain-vanilla” stock option awards because the Company’s stock option exercise history does not provide a reasonable basis to compute the expected term for stock options granted under the 2013 Equity Plan. Beginning in 2021, as a result of the significant increase in the Company’s stock price volatility, the Company established estimates for the expected stock price volatility by calculating a blended rate from the historical stock price volatility of its class A common stock and the implied volatility of the Company’s traded financial instruments with similar terms to the respective award. For stock options granted prior to 2021, the Company relied exclusively on its historical stock price volatility using a simple average calculation method to estimate the expected stock price volatility over the expected term because the Company believed at the date of grant that future volatility was unlikely to differ from the past. The risk-free interest rate is based on U.S. Treasury securities with terms that approximate the expected term of the stock options. The expected dividend yield is zero, as the Company has not previously declared cash dividends and does not currently intend to declare cash dividends in the foreseeable future. These assumptions are based on management’s best judgment, and changes to these assumptions could materially affect the fair value estimates and amount of share-based compensation expense recognized. As of December 31, 2022, there were options to purchase 1,576,879 shares of class A common stock outstanding under the 2013 Equity Plan. The following table summarizes the Company’s stock option activity (in thousands, except per share data and years) for the periods indicated:
|  | Stock Options Outstanding
|  |  |  |  |  | Weighted Average |  |  | Aggregate |  |  | Weighted Average
|  |  |  |  |  | Exercise Price |  |  | Intrinsic |  |  | Remaining Contractual
|  | Shares |  |  | Per Share |  |  | Value |  |  | Term (Years)
Balance as of January 1, 2020 |  |  | 1,634 |  |  | $ | 141.60 |  |  |  |  |  |  |
Granted |  |  | 118 |  |  |  | 146.76 |  |  |  |  |  |  |
Exercised |  |  | (348 | ) |  |  | 146.80 |  |  | $ | 29,994 |  |  |
Forfeited/Expired |  |  | (247 | ) |  |  | 146.63 |  |  |  |  |  |  |
Balance as of December 31, 2020 |  |  | 1,157 |  |  |  | 139.48 |  |  |  |  |  |  |
Granted |  |  | 305 |  |  |  | 676.10 |  |  |  |  |  |  |
Exercised |  |  | (269 | ) |  |  | 151.19 |  |  | $ | 163,427 |  |  |
Forfeited/Expired |  |  | (26 | ) |  |  | 499.11 |  |  |  |  |  |  |
Balance as of December 31, 2021 |  |  | 1,167 |  |  |  | 268.74 |  |  |  |  |  |  |
Granted |  |  | 440 |  |  |  | 346.15 |  |  |  |  |  |  |
Exercised |  |  | (9 | ) |  |  | 137.51 |  |  | $ | 1,469 |  |  |
Forfeited/Expired |  |  | (21 | ) |  |  | 498.69 |  |  |  |  |  |  |
Balance as of December 31, 2022 |  |  | 1,577 |  |  | $ | 288.30 |  |  |  |  |  |  |
Exercisable as of December 31, 2022 |  |  | 807 |  |  | $ | 180.26 |  |  | $ | 9,755 |  |  | 3.7
Expected to vest as of December 31, 2022 |  |  | 770 |  |  | $ | 401.45 |  |  |  | 326 |  |  | 8.7
Total |  |  | 1,577 |  |  | $ | 288.30 |  |  | $ | 10,081 |  |  | 6.1
Stock options outstanding as of December 31, 2022 are comprised of the following range of exercise prices per share (in thousands, except per share data and years):
|  | Stock Options Outstanding at December 31, 2022 |
|  |  |  |  |  | Weighted Average |  |  | Weighted Average |
|  |  |  |  |  | Exercise Price |  |  | Remaining Contractual |
Range of Exercise Prices per Share |  | Shares |  |  | Per Share |  |  | Term (Years) |
$121.43 - $200.00 |  |  | 919 |  |  | $ | 138.56 |  |  |  | 4.2 |
$200.01 - $300.00 |  |  | 80 |  |  | $ | 239.61 |  |  |  | 9.6 |
$400.01 - $500.00 |  |  | 323 |  |  | $ | 408.66 |  |  |  | 9.1 |
$600.01 - $691.23 |  |  | 255 |  |  | $ | 691.23 |  |  |  | 8.1 |
Total |  |  | 1,577 |  |  | $ | 288.30 |  |  |  | 6.1 |
An aggregate of 245,500, 200,625, and 200,000 stock options with an aggregate grant date fair value of $35.8 million, $11.0 million, and $11.2 million vested during the years ended December 31, 2022, 2021, and 2020, respectively. The weighted average grant date fair value of stock option awards using the Black-Scholes valuation model was $201.64, $372.05, and $49.68 for each share subject to a stock option granted during the years ended December 31, 2022, 2021, and 2020, respectively, based on the following assumptions:
|  | Years Ended December 31,
|  | 2022 |  | 2021 |  | 2020
Expected term of options in years |  | 6.3 |  | 6.3 |  | 6.3
Expected volatility |  | 58.4% - 75.5% |  | 56.8% - 59.0% |  | 33.6% - 34.6%
Risk-free interest rate |  | 1.9% - 3.9% |  | 0.8% - 1.1% |  | 0.3% - 0.5%
Expected dividend yield |  | 0.0% |  | 0.0% |  | 0.0%
The Company recognized approximately $48.3 million, $32.0 million, and $10.1 million in share-based compensation expense for the years ended December 31, 2022, 2021, and 2020, respectively, from stock options granted under the 2013 Equity Plan. As of December 31, 2022, there was approximately $132.2 million of total unrecognized share-based compensation expense related to unvested stock options, which the Company expects to recognize over a weighted average vesting period of approximately 2.7 years. Share-settled restricted stock units During 2020, the Company began granting share-settled restricted stock units under the 2013 Equity Plan. The share-settled restricted stock units entitle recipients to receive a number of shares of the Company’s class A common stock over a vesting period, as specified in the applicable restricted stock unit agreement. Although the Company may in its sole discretion elect to pay fully or partially in cash in lieu of settling solely in shares, it does not currently intend to do so. Share-based compensation expense related to share-settled restricted stock units is based on the fair value of the Company’s class A common stock on the date of grant. The Company recognizes share-based compensation expense associated with such share-settled restricted stock unit awards on a straight-line basis over the award’s requisite service period (generally, the vesting period). The share-settled restricted stock unit awards granted to date vest in equal annual installments over a four-year period (unless accelerated in connection with a change in control event under specified conditions as set forth in the applicable restricted stock unit agreement or otherwise in accordance with provisions of the 2013 Equity Plan or applicable restricted stock unit agreement). Upon vesting of the share-settled restricted stock units, the Company covers the minimum tax withholding obligation in most jurisdictions by withholding shares with equivalent value based on the closing stock price on the vesting date. For these jurisdictions, the Company then pays the withholding tax obligation to the appropriate taxing authorities which is reflected as a financing activity on the Consolidated Statements of Cash Flows. As of December 31, 2022, there were 119,617 share-settled restricted stock units outstanding under the 2013 Equity Plan. The following table summarizes the Company’s share-settled restricted stock unit activity (in thousands) for the periods indicated:
|  | Share-Settled Restricted Stock Units Outstanding |
|  |  |  |  |  | Aggregate |
|  |  |  |  |  | Intrinsic |
|  | Units |  |  | Value |
Balance as of January 1, 2020 |  |  | 0 |  |  |  |  |
Granted |  |  | 76 |  |  |  |  |
Vested |  |  | 0 |  |  | $ | 0 |
Forfeited |  |  | (2 | ) |  |  |  |
Balance as of January 1, 2021 |  |  | 74 |  |  |  |  |
Granted |  |  | 58 |  |  |  |  |
Vested |  |  | (17 | ) |  | $ | 13,803 |
Forfeited |  |  | (10 | ) |  |  |  |
Balance as of December 31, 2021 |  |  | 105 |  |  |  |  |
Granted |  |  | 60 |  |  |  |  |
Vested |  |  | (28 | ) |  | $ | 6,604 |
Forfeited |  |  | (17 | ) |  |  |  |
Balance as of December 31, 2022 |  |  | 120 |  |  |  |  |
Expected to vest as of December 31, 2022 |  |  | 120 |  |  | $ | 16,934 |
During the year ended December 31, 2022, 28,180 share-settled restricted stock units having an aggregate grant date fair value of $12.3 million vested, and 9,467 shares were withheld to satisfy tax obligations, resulting in 18,713 issued shares. During the year ended December 31, 2021, 17,004 share-settled restricted stock units having an aggregate grant date fair value of $3.3 million vested, and 5,857 shares were withheld to satisfy tax obligations, resulting in 11,147 issued shares. No share-settled restricted stock units vested during the year ended December 31, 2020. The weighted average grant date fair value of share-settled restricted stock units granted during the years ended December 31, 2022, 2021, and 2020 was $246.17, $736.46, and $192.43, respectively, based on the fair value of the Company’s class A common stock. The Company recognized approximately $13.4 million, $8.0 million, and $0.5 million in share-based compensation expense for the years ended December 31, 2022, 2021, and 2020, respectively, from share-settled restricted stock units granted under the 2013 Equity Plan. As of December 31, 2022, there was approximately $38.0 million of total unrecognized share- based compensation expense related to unvested share-settled restricted stock units, which the Company expects to recognize over a weighted average vesting period of approximately 2.7 years. Other stock-based awards and cash-settled restricted stock units During 2021, the Company granted 9,000 “other stock-based awards” under the 2013 Equity Plan. Other stock-based awards were not granted in 2022 or 2020. As of December 31, 2022, there were a total of 10,250 other stock-based awards outstanding under the 2013 Equity Plan. These other stock-based awards are similar to stock options, except these awards are settled in cash only and not in shares of the Company’s class A common stock. During 2021, the Company granted 900 cash-settled restricted stock units under the 2013 Equity Plan. Cash-settled restricted stock units were not granted in 2022 or 2020. As of December 31, 2022, there were a total of 525 cash-settled restricted stock units outstanding under the 2013 Equity Plan. These cash-settled restricted stock units are similar to the Company’s share-settled restricted stock units, except they are settled in cash only and not in shares of the Company’s class A common stock. Both the other stock-based awards and the cash-settled restricted stock units are classified as liabilities in the Company’s Consolidated Balance Sheets due to the required cash settlement feature and the fair value of the awards is remeasured each quarterly reporting period. During the year ended December 31, 2022, the Company recognized a reduction of approximately $0.5 million in share-based compensation expense from other stock-based awards and cash-settled restricted stock units. The Company recognized approximately $1.4 million and $0.6 million, respectively, in share-based compensation expense from other stock-based awards and cash-settled restricted stock units for the years ended December 31, 2021 and 2020. As of December 31, 2022, there was approximately $0.3 million of total unrecognized share-based compensation expense related to other stock-based awards and cash-settled restricted stock units, which the Company expects to recognize over a weighted average vesting period of approximately 2.1 years, subject to additional fair value adjustments through the earlier of settlement or expiration. 2021 ESPP In 2021, the Company adopted, and the Company’s stockholders approved, the 2021 ESPP. The purpose of the 2021 ESPP is to provide eligible employees of the Company and certain of its subsidiaries with opportunities to purchase shares of the Company’s class A common stock, commencing at such time and on such dates as the Board of Directors of the Company shall determine. The first offering period under the 2021 ESPP commenced on February 16, 2021 and ended on August 15, 2021. After this first offering period, the Board of Directors of the Company determined to provide subsequent 6-month offering periods commencing on each March 1 and September 1 for the remaining term of the 2021 ESPP. An aggregate of 100,000 shares of the Company’s class A common stock has been authorized for issuance under the 2021 ESPP. During the years ended December 31, 2022 and 2021, 15,925 shares and 4,612 shares, respectively, of class A common stock were issued in connection with the 2021 ESPP. As of December 31, 2022, 79,463 shares of the Company’s class A common stock remained available for issuance under the 2021 ESPP. Unless otherwise determined by the Board of Directors, shares are purchased at a price equal to 85% of the lesser of the closing price of the Company’s class A common stock on the first or last business day of the offering period, respectively. Share-based compensation expense is based on the grant date fair value, which consists of the intrinsic value of the 15% discounted share purchase rights and the fair value of the look-back provision using the Black-Scholes valuation model, recognized on a straight-line basis over the offering period. The grant date is the offering period commencement date. During the years ended December 31, 2022 and 2021, the Company recognized approximately $2.4 million and $2.6 million, respectively, in share-based compensation expense related to the 2021 ESPP. As of December 31, 2022, there was approximately $0.5 million of total unrecognized share-based compensation expense related to the 2021 ESPP, which the Company expects to recognize over a period of approximately 0.2 years. Tax Benefits Related to Equity Plans The following table summarizes the tax (benefit) expense related to the Company’s equity plans (in thousands) for the periods indicated:
|  | Years Ended December 31, |
|  | 2022 |  |  | 2021 |  |  | 2020 |
Tax (benefit) expense related to: |  |  |  |  |  |  |  |  |  |  |  |
Share-based compensation expense |  | $ | (12,155 | ) |  | $ | (8,260 | ) |  | $ | (2,028 | )
Exercises of stock options and vesting of share-settled restricted stock units |  |  | 1,370 |  |  |  | (37,664 | ) |  |  | (3,196 | )
Total tax benefit related to the Company's equity plans |  | $ | (10,785 | ) |  | $ | (45,924 | ) |  | $ | (5,224 | )

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