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Stock-Based Compensation Plans | 12 Months Ended
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Dec. 31, 2022
Share-Based Payment Arrangement [Abstract] |
Stock-Based Compensation Plans | Stock-Based Compensation PlansUnder the Omnibus Equity Plan, the Company is authorized to issue up to 8,841,864 new shares of Class A common stock to employees, officers and non-employee directors. Under this plan, the Company may grant awards in respect of shares of Class A common stock, including performance-based restricted stock units (“PRSUs”), stock options, restricted stock units (“RSUs”) and dividend equivalent rights. The awards may have performance-based and time-based vesting conditions. Stock options have a maximum contractual term of 10 years. On February 16, 2022, the Company announced that Mr. Olesky would retire as Chief Executive Officer (“CEO”) of the Company, effective December 31, 2022. As of the beginning of Mr. Olesky’s six month notice period under our 2019 Omnibus Equity Incentive Plan, there were (i) approximately $6.7 million in total unamortized stock-based compensation associated with equity awards previously granted to Mr. Olesky plus (ii) $5.0 million in unamortized stock-based compensation awards granted to Mr. Olesky during 2022 that were accelerated and amortized into expense over a revised estimated service period that ended on August 11, 2022, the date that such six month notice period ended. In addition, in December 2022, $5.5 million in stock-based compensation awards, relating to 2022 performance, were granted to Mr. Olesky and immediately recognized into expense upon grant. Of these amounts, $3.1 million represents regular amortization that would have been recognized through August 11, 2022 if Mr. Olesky had not announced his retirement and $14.1 million represents accelerated stock-based compensation (the “CEO Retirement Accelerated Stock-Based Compensation Expense”). Total amortization amounts disclosed were based on a 100% multiplier achieved for the 2022 performance-based restricted stock units and were adjusted, up by $0.7 million, based on the final performance multiplier achieved for the year ended December 31, 2022. During the year ended December 31, 2022, we incurred a total of $15.0 million in CEO Retirement Accelerated Stock-Based Compensation Expense and related payroll taxes which impacted the amounts disclosed below. PRSUs (Equity-Settled) PRSUs are promises to issue actual shares of Class A common stock which cliff vest on January 1 of the third calendar year from the calendar year of the date of grant. The fair value of the equity-settled PRSUs is calculated on the grant date using the stock price of the Class A common stock. The number of shares a participant will receive upon vesting is determined by a performance modifier, which is adjusted as a result of the financial performance of the Company in the grant year. The performance modifier can vary between 0% (minimum) and 200% (maximum) of the target (100%) award amount. Compensation expense for PRSUs that cliff vest is recognized on a straight-line basis over the vesting period for the entire award. The number of shares included in expense each period is based on management’s estimate of the probable final performance modifier for those grants, with such estimate updated each period until the performance modifier is finalized. A summary of the Company’s outstanding equity-settled PRSUs is presented below:
|  | Equity-Settled PRSUs |  | Weighted Average Grant-Date Fair Value
Equity-settled PRSUs outstanding at December 31, 2021 |  | 2,655,598 |  |  | $ | 34.20 |
Grants |  | 249,292 |  |  | $ | 83.74 |
Vests |  | (1,525,632) |  |  | $ | 21.06 |
Performance adjustment |  | 69,639 |  |  | $ | 83.80 |
Forfeitures and adjustments |  | (26,476) |  |  | $ | 67.76 |
Equity-settled PRSUs outstanding at December 31, 2022 |  | 1,422,421 |  |  | $ | 58.78 |
The following table summarizes information about equity-settled PRSU awards:
|  | Year Ended
|  | December 31,
|  | 2022 |  | 2021 |  | 2020
|  | (in thousands)
Equity-settled PRSU compensation expense |  | $ | 30,645 |  |  | $ | 30,633 |  |  | $ | 27,809 |
Income tax benefit |  | $ | (34,711) |  |  | $ | (16,374) |  |  | $ | (10,261) |
The weighted-average grant-date fair value of equity-settled PRSUs granted during the years ended December 31, 2021 and 2020 was $74.29 and $38.87, respectively. The total fair value of equity-settled PRSUs vested during the years ended December 31, 2022, 2021 and 2020 was $152.8 million, $67.4 million and $39.8 million, respectively. Options Prior to the IPO, the Company granted the Special Option Award to management and other employees and granted additional options subsequent to the IPO in July 2019 and December 2019, in each case under the Option Plan (the “July 2019 Grants” and the “December 2019 Grants,” respectively). Each option award vests one half based solely on the passage of time and one half only if the Company achieves certain performance targets. The options have a four-year graded vesting schedule, with accelerated vesting for the time-based Special Option Award options originally scheduled to vest in years three and four that were accelerated upon completion of the IPO. The stock-based compensation expense recognition commenced upon the completion of the IPO. The grant-date fair value of the time-based options related to the Special Option Award and the July 2019 Grants are amortized into expense over the requisite service period on a straight-line basis, with each tranche separately measured. The grant-date fair value of the time-based December 2019 Grants are amortized into expense on a straight-line basis over the requisite service period for the entire award. For the portion of all awards that require both future service and the achievement of Company performance-based conditions, the grant-date fair value for each tranche is separately amortized into expense over the requisite service period for the requisite performance-based condition. If in a reporting period it is determined that the achievement of a performance target for a performance-based tranche is not probable, then no expense is recognized for that tranche and any expenses already recognized relating to that tranche in prior reporting periods are reversed in the current reporting period. The Company can elect to net-settle exercised options by reducing the shares of Class A common stock to be issued upon such exercise by the number of shares of Class A common stock having a fair market value on the date of exercise equal to the aggregate option price and withholding taxes payable in respect of the number of options exercised. The Company may then pay these employee payroll taxes from the Company’s cash. A summary of the Company’s outstanding options is presented below:
|  | Options |  | Weighted Average Grant-Date Fair Value |  | Weighted Average Exercise Price
Options outstanding at December 31, 2021 |  | 3,415,288 |  |  | $ | 2.92 |  |  | $ | 23.59 |
Grants |  | — |  |  | $ | — |  |  | $ | — |
Exercises |  | (1,049,475) |  |  | $ | 2.85 |  |  | $ | 23.52 |
Forfeitures and adjustments |  | — |  |  | $ | — |  |  | $ | — |
Expired |  | — |  |  | $ | — |  |  | $ | — |
Options outstanding at December 31, 2022 |  | 2,365,813 |  |  | $ | 2.95 |  |  | $ | 23.62 |
Vested options outstanding at December 31, 2022 - all exercisable |  | 2,109,563 |  |  | $ | 2.06 |  |  | $ | 20.94 |
The following table summarizes information about options awards:
|  | Year Ended
|  | December 31,
|  | 2022 |  | 2021 |  | 2020
|  | (in thousands)
Options compensation expense |  | $ | 2,097 |  |  | $ | 5,327 |  |  | $ | 6,118 |
Income tax benefit |  | $ | (12,894) |  |  | $ | (69,868) |  |  | $ | (57,457) |
There were no options granted during the years ended December 31, 2021 and 2020. The total intrinsic value of options exercised during the years ended December 31, 2022, 2021 and 2020 was $59.3 million, $333.8 million and $291.8 million, respectively. The total intrinsic value of all options outstanding as of December 31, 2022 was $97.7 million. The weighted average remaining contractual life of all options outstanding as of December 31, 2022 was 6.0 years. The total intrinsic value of all vested options outstanding as of December 31, 2022 was $92.8 million, all of which are currently exercisable. The weighted average remaining contractual life of all vested options outstanding as of December 31, 2022 was 5.8 years. RSUs Beginning in 2020, the Company expanded its RSU grants under the Omnibus Equity Plan to employees. Previously, RSU grants were limited to non-employee directors. RSUs are promises to issue shares of Class A common stock at the end of a vesting period. RSUs granted to employees generally vest one-third each year over a three-year period. RSUs granted to non-employee directors generally vest after one year. The grant-date fair value of RSUs are amortized into expense on a straight-line basis over the requisite service period for the entire award. A summary of the Company’s outstanding RSUs is presented below:
|  | RSUs |  | Weighted Average Grant-Date Fair Value
RSUs outstanding at December 31, 2021 |  | 683,764 |  |  | $ | 58.28 |
Grants |  | 485,046 |  |  | $ | 80.27 |
Vests |  | (288,904) |  |  | $ | 55.43 |
Forfeitures |  | (15,243) |  |  | $ | 63.66 |
RSUs outstanding at December 31, 2022 |  | 864,663 |  |  | $ | 71.47 |
The following table summarizes information about RSU awards:
|  | Year Ended
|  | December 31,
|  | 2022 |  | 2021 |  | 2020
|  | (in thousands) |  |
RSU compensation expense |  | $ | 33,902 |  |  | $ | 15,983 |  |  | $ | 5,359 |
Income tax benefit |  | $ | (10,096) |  |  | $ | (5,416) |  |  | $ | (311) |
The weighted-average grant-date fair value of RSUs granted during the years ended December 31, 2021 and 2020 was $75.09 and $38.91, respectively. The total fair value of RSUs vested during the years ended December 31, 2022 and 2021 was $25.6 million and $12.5 million, respectively. There were no RSUs that vested during the year ended December 31, 2020. Compensation Expense The Company records stock-based compensation expense for employees and directors in the consolidated statements of income. A summary of the Company’s total stock-based compensation expense relating to its equity-settled PRSUs, options and RSUs, including the CEO Retirement Accelerated Stock-Based Compensation Expense, is presented below:
|  | Year Ended
|  | December 31,
|  | 2022 |  | 2021 |  | 2020
|  | (in thousands)
Total stock-based compensation expense |  | $ | 66,644 |  |  | $ | 51,943 |  |  | $ | 39,286 |
The stock-based compensation expense above excludes $0.9 million of stock-based compensation expense capitalized to software development costs during the year ended December 31, 2022. As of December 31, 2022, total unrecognized compensation expense related to unvested stock-based compensation arrangements and the expected recognition period are as follows:
|  | Equity-Settled PRSUs |  | Options |  | RSUs
|  | (dollars in thousands)
Total unrecognized compensation cost |  | $ | 25,045 |  |  | $ | 741 |  |  | $ | 30,023 |
Weighted-average recognition period (in years) |  | 1.6 |  | 0.9 |  | 1.8

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