Stock-Based Compensation

9 Months Ended

Sep. 30, 2024

Share-Based Payment Arrangement [Abstract]

Pursuant to the 2022 Stock Incentive Plan, we grant stock-only stock appreciation rights ("SOSARs"), restricted stock units ("RSUs"), and performance stock units ("PSUs") to employees and non-employee directors. SOSARs and RSUs generally vest in two equal installments on the second and third anniversary of the grant date. PSUs are subject to service, market and performance vesting conditions, and the quantity of shares that vest will range from 0% to 300% of the targeted number of shares.

During the three months ended September 30, 2024, our now former CEO terminated employment with the company and forfeited all of his unvested equity awards. This resulted in a reversal of expense of $27,863 in the current quarter. In response to the CEO departure, we granted retention RSUs to key executives. These awards have various vesting terms, and will vest over one, two or three years. Total expense recognized for the retention RSUs in the current quarter was $5,134. The impact of the CEO forfeiture and employee retention awards are reflected in the tables below.

Total stock-based compensation expense was as follows:


	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023
Stock-based compensation	$	5,262	$	36,614	$	88,103	$	88,751
Stock-based compensation, net of income taxes	$	(1,058)	$	31,065	$	69,160	$	74,966
Total capitalized stock-based compensation included in leasehold improvements, property and equipment, net on the condensed consolidated balance sheets	$	602	$	813	$	2,200	$	2,194
Excess tax benefit on stock-based compensation recognized in provision for income taxes on the condensed consolidated statements of income and comprehensive income	$	3,073	$	994	$	19,161	$	23,004

SOSARs

A summary of SOSAR award activity was as follows (in thousands, except per share data):


	Shares	Weighted-Average Exercise Price per Share		Weighted-Average Remaining Contractual Life (Years)	Aggregate Intrinsic Value
Outstanding, January 1, 2024	14,738	$	26.05		$	290,156
Granted	2,484	52.98
Exercised	(4,012)	20.61
Forfeited	(1,733)	38.49
Outstanding, September 30, 2024	11,477	31.90		4.10	295,564
Exercisable, September 30, 2024	5,084	23.39		2.39	174,018
Vested and expected to vest, September 30, 2024	10,911	31.41		4.02	286,376

RSUs

A summary of RSU award activity was as follows (in thousands, except per share data):


	Shares	Weighted-Average Grant Date Fair Value per Share
Outstanding, January 1, 2024	3,004	$	32.08
Granted	2,578	53.63
Vested	(906)	31.95
Forfeited	(260)	38.92
Outstanding, September 30, 2024	4,416	44.29
Vested and expected to vest, September 30, 2024	3,875	44.06

PSUs

A summary of PSU award activity was as follows (in thousands, except per share data):


	Shares	Weighted-Average Grant Date Fair Value per Share
Outstanding, January 1, 2024	2,794	$	31.24
Granted	849	52.77
Vested	(777)	29.59
Forfeited	(838)	37.88
Outstanding, September 30, 2024	2,028	38.15
Vested and expected to vest, September 30, 2024*	3,580	37.91

*The vested and expected to vest total above represents outstanding base PSUs, adjusted for expected payout amounts in line with current and future estimated performance levels.