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Stock-Based Compensation
 9 Months Ended
Sep. 30, 2023
Share-Based Payment Arrangement [Abstract]  
Stock-Based Compensation
Note 8—Stock-Based Compensation
Stock-Based Compensation Expense
Stock-based compensation expense recorded in the condensed consolidated statements of operations was as follows (in thousands):
Three Months Ended
September 30,		Nine Months Ended
September 30,
2023202220232022
Platform operations$5,729 $3,517 $14,642 $14,254 
Sales and marketing21,116 14,861 54,039 48,718 
Technology and development43,727 22,641 91,283 67,258 
General and administrative69,061 79,984 210,222 240,881 
Total$139,633 $121,003 $370,186 $371,111 
On September 30, 2023, David R. Pickles stepped down as the Company’s Chief Technology Officer and from the Company’s board of directors. As a result, Mr. Pickles and the Company mutually agreed to cancel his unvested stock options and restricted stock without payment or replacement, resulting in the recognition of $14 million in incremental stock-based compensation expense, which is included in technology and development expense for the three and nine months ended September 30, 2023. No amount of stock-based compensation expense for these cancelled options and restricted stock remains unamortized.
Stock Options
The following summarizes stock option activity:
Shares
Under Options
(in thousands)
Weighted-
Average
Exercise Price
Outstanding as of December 31, 2022
15,418$19.82 
Granted2,80662.21 
Exercised(4,414)10.28 
Expired/Forfeited/Cancelled(744)56.02 
Outstanding as of September 30, 2023
13,066$30.09 
Exercisable as of September 30, 2023
9,424$18.37 
At September 30, 2023, the Company had unrecognized stock-based compensation relating to stock options, excluding the CEO Performance Option (as defined below), of approximately $132 million, which is expected to be recognized over a weighted-average period of 2.9 years.
CEO Performance Option
In October 2021, the Company granted a market-based performance award to the Company’s Chief Executive Officer (the “CEO Performance Option”) under the Company’s 2016 Incentive Award Plan. The CEO Performance Option has an exercise price of $68.29 per share. At December 31, 2022, the CEO Performance Option had 19.2 million options outstanding. No options were granted, exercised, forfeited or expired during the three and nine months ended September 30, 2023. At September 30, 2023, the CEO Performance Option had 2.4 million exercisable options and 19.2 million options outstanding. Stock-based compensation of $48 million and $66 million for the CEO Performance Option was recorded as a component of general and administrative expense during the three months ended September 30, 2023 and 2022, respectively. Stock-based compensation of $156 million and $197 million for the CEO Performance Option was recorded as a component of general and administrative expense during the nine months ended September 30, 2023 and 2022, respectively. At September 30, 2023, the Company had unrecognized stock-based compensation relating to the CEO Performance Option of $243 million that is expected to be recognized over a weighted-average period of 1.8 years, assuming no acceleration of vesting.
Restricted Stock
The following summarizes restricted stock activity:
Shares
(in thousands)
Weighted-
Average
Grant Date
Fair Value
Unvested as of December 31, 2022
8,747 $57.41 
Granted6,404 62.69 
Vested(2,473)54.95 
Forfeited/Cancelled(1,090)57.60 
Unvested as of September 30, 2023
11,588 $60.84 
At September 30, 2023, the Company had unrecognized stock-based compensation relating to restricted stock of approximately $652 million, which is expected to be recognized over a weighted-average period of 3.0 years.
Employee Stock Purchase Plan (“ESPP”)
Stock-based compensation expense related to the ESPP totaled $7 million and $4 million for the three months ended September 30, 2023 and 2022, respectively. Stock-based compensation expense related to the ESPP totaled $15 million and $46 million for the nine months ended September 30, 2023 and 2022, respectively. At September 30, 2023, the Company had unrecognized stock-based compensation relating to ESPP awards of approximately $15 million, which is expected to be recognized over a weighted-average period of 0.7 years.