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Note 17. Share-Based Compensation (Notes) | 12 Months Ended
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Dec. 31, 2024
Share-Based Payment Arrangement [Abstract] |
Share-Based Compensation | 17. Share-Based Compensation The following table presents share-based compensation expense recognized in our consolidated statements of operations for the years ended December 31, 2024, 2023, and 2022 (in thousands):
|  | 2024 |  | 2023 |  | 2022
Cost of sales |  | $ | 3,923 |  |  | $ | 4,798 |  |  | $ | 3,174 |
Selling, general and administrative |  | 20,696 |  |  | 25,217 |  |  | 22,367 |
Research and development |  | 3,502 |  |  | 4,133 |  |  | 3,080 |
Production start-up |  | (17) |  |  | 71 |  |  | 35 |
Total share-based compensation expense |  | $ | 28,104 |  |  | $ | 34,219 |  |  | $ | 28,656 |
As of December 31, 2024, we had $26.6 million of unrecognized share-based compensation expense related to unvested restricted stock and performance units, which we expect to recognize over a weighted-average period of approximately 1.3 years. During the years ended December 31, 2024, 2023, and 2022, we recognized an income tax benefit in our consolidated statements of operations of $12.2 million, $19.3 million, and $7.3 million, respectively, related to share-based compensation expense, including excess tax benefits. We authorize our transfer agent to issue new shares, net of shares withheld for taxes as appropriate, for the vesting of restricted stock and performance units or grants of unrestricted stock. Share-Based Compensation Plans During the year ended December 31, 2020, we adopted our 2020 Omnibus Plan, under which directors, officers, employees, and consultants of First Solar, Inc. (including any of its affiliates) are eligible to participate in various forms of share-based compensation. The 2020 Omnibus Plan is administered by the compensation committee (or any other committee designated by our board of directors), which is authorized to, among other things, determine the recipients of grants, the exercise price, and the vesting schedule of any awards made under the 2020 Omnibus Plan. Our board of directors may amend, modify, or terminate the 2020 Omnibus Plan without the approval of our stockholders, except for amendments that would increase the maximum number of shares of our common stock available for awards under the 2020 Omnibus Plan, increase the maximum number of shares of our common stock that may be delivered by incentive stock options, or modify the requirements for participation in the 2020 Omnibus Plan. The 2020 Omnibus Plan provides for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, restricted shares, restricted stock units, performance units, cash incentive awards, performance compensation awards, and other equity-based and equity-related awards. The shares underlying any forfeited, expired, terminated, or canceled awards become available for new award grants. We may not grant awards under the 2020 Omnibus Plan after 2030, which is the tenth anniversary of the 2020 Omnibus Plan’s approval by our stockholders. As of December 31, 2024, we had 6,408,178 shares available for future issuance under the 2020 Omnibus Plan. Restricted Stock and Performance Units We issue shares to the holders of restricted stock units on the date the restricted units vest. The majority of shares issued are net of applicable withholding taxes, which we pay on behalf of our associates. As a result, the actual number of shares issued will generally be less than the number of restricted stock units granted. Prior to vesting, restricted stock units do not have dividend equivalent rights or voting rights, and the shares underlying the restricted stock units are not considered issued and outstanding. In July 2019, March 2020, and May 2021, the compensation committee of our board of directors approved grants of performance units for key executive officers to be earned over multi-year performance periods, which ended in December 2021, December 2022, and December 2023, respectively. Vesting of the 2019, 2020, and 2021 grants of performance units was contingent upon the specific attainment targets of each grant, which targets included metrics such as contracted revenue, module wattage, return on capital, cost per watt, gross profit, incremental average selling price, and operating income metrics. In March 2022, the compensation committee certified the achievement of the vesting conditions applicable to the 2019 grants, which approximated the maximum level of performance. In March 2023, the compensation committee certified the achievement of the vesting conditions applicable to the 2020 grants, which approximated the target level of performance. In February 2024, the compensation committee certified the achievement of the vesting conditions applicable to the 2021 grants, which approximated the maximum level of performance. Accordingly, each participant received one share of common stock for each vested performance unit granted, net of any tax withholdings. In March 2022, the compensation committee approved additional grants of performance units for key executive officers to be earned over a multi-year performance period, which ended in December 2024. Vesting of the 2022 grants of performance units is contingent upon the relative attainment of target contracted revenue, cost per watt, and return on capital metrics, to be certified by the compensation committee in 2025. In March 2023 and March 2024, the compensation committee approved additional grants of performance units for key executive officers; such grants are expected to be earned over a multi-year performance period ending in December 2025 and December 2026, respectively. Vesting of the 2023 and 2024 grants of performance units is contingent upon the specific attainment targets of each grant, which targets include metrics such as contracted revenue, production, incremental average selling price, and operating margin metrics. Vesting of performance units is also contingent upon the employment of program participants through the applicable vesting dates, with limited exceptions in case of death, disability, a qualifying retirement, or a change-in-control of First Solar. Outstanding performance units are included in the computation of diluted net income per share based on the number of shares that would be issuable if the end of the reporting period were the end of the contingency period. In February 2022, we adopted a Clawback Policy (“the Policy”) that applies to the Company’s current and former Section 16 officers. The Policy applies to all incentive compensation, including any performance-based annual incentive awards and performance-based equity compensation. The Policy was adopted to ensure that incentive compensation is paid or awarded based on accurate financial results and the correct calculation of performance against incentive targets. The following is a summary of our restricted stock unit activity, including performance unit activity, for the year ended December 31, 2024:
|  | Number of Shares |  | Weighted-Average Grant-Date Fair Value
Unvested restricted stock units at December 31, 2023 |  | 960,448 |  | $ | 106.25 |
Restricted stock units granted (1) |  | 215,849 |  | 158.63 |
Restricted stock units vested |  | (331,153) |  | 75.44 |
Restricted stock units forfeited |  | (30,806) |  | 123.81 |
Unvested restricted stock units at December 31, 2024 |  | 814,338 |  | $ | 132.00 |
—————————— (1)Restricted stock units granted include the maximum amount of performance units available for issuance under our long-term incentive program for key executive officers and associates. The actual number of shares to be issued will depend on the relative attainment of the performance metrics described above. We estimate the fair value of our restricted stock unit awards based on our stock price on the grant date. For the years ended December 31, 2023 and 2022, the weighted-average grant-date fair value for restricted stock units granted in such years was $210.45 and $89.21, respectively. The total fair value of restricted stock units vested during 2024, 2023, and 2022 was $25.0 million, $20.0 million, and $26.4 million, respectively. Unrestricted Stock During the years ended December 31, 2024, 2023, and 2022, we awarded 9,645; 11,246; and 19,868, respectively, of fully vested, unrestricted shares of our common stock, excluding amounts withheld for taxes, to the chair and independent members of our board of directors. Accordingly, we recognized $1.9 million, $2.1 million, and $1.9 million of share-based compensation expense for these awards during the years ended December 31, 2024, 2023, and 2022, respectively.

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