Share-Based Compensation

12 Months Ended

Dec. 31, 2022

Share-Based Payment Arrangement [Abstract]

Our board of directors adopted, and our stockholders approved, the Invitation Homes Inc. 2017 Omnibus Incentive Plan (the “Omnibus Incentive Plan”) to provide a means through which to attract and retain key associates and to provide a means whereby our directors, officers, associates, consultants, and advisors can acquire and maintain an equity interest in us, or be paid incentive compensation, including incentive compensation measured by reference to the value of our common stock, and to align their interests with those of our stockholders. Under the Omnibus Incentive Plan, we may issue up to 16,000,000 shares of common stock.

Our share-based awards consist of RSUs, which may be time vesting, performance based vesting, or market based vesting, and Outperformance Awards (defined below). Time-vesting RSUs are participating securities for EPS purposes, and PRSUs and Outperformance Awards are not.

Share-Based Awards

The following summarizes our share-based award activity during the years ended December 31, 2022, 2021, and 2020.

Annual Long Term Incentive Plan (“LTIP”):

•Annual LTIP Awards Granted: During the years ended December 31, 2022, 2021, and 2020, we granted 640,107, 675,627, and 499,228 RSUs, respectively, pursuant to LTIP awards. Each award includes components which vest based on time-vesting conditions, market based vesting conditions, and performance based vesting conditions, each of which is subject to continued employment through the applicable vesting date.

LTIP time-vesting RSUs vest in three equal annual installments based on an anniversary date of March 1st. LTIP PRSUs may be earned based on the achievement of certain measures over a three year performance period. The number of PRSUs earned will be determined based on performance achieved during the performance period for each measure at certain threshold, target, or maximum levels and corresponding payout ranges. In general, the LTIP PRSUs are earned after the end of the performance period on the date on which the performance results are certified by our compensation and management development committee (the “Compensation Committee”).

All of the LTIP Awards are subject to certain change in control and retirement eligibility provisions that may impact these vesting schedules.

•PRSU Results: During the years ended December 31, 2022, 2021, and 2020, certain LTIP PRSUs vested and achieved performance in excess of the target level, resulting in the issuance of an additional 285,601, 159,180, and 91,200 shares of common stock, respectively. Such awards are reflected as an increase in the number of awards granted and vested in the table below. Certain other LTIP PRSUs did not achieve performance criteria, resulting in the cancellation of 47,145, and 5,348 awards during the years ended December 31, 2021 and 2020, respectively. Such awards are reflected as an increase in the number of awards forfeited/canceled in the table below.

Other Awards

•Bonus and Retention Awards: During the year ended December 31, 2022, we granted 106,975 time-vesting RSUs in the form of retention awards to certain associates which will fully vest on March 1, 2025, subject to continued employment through the vesting date.

•Director Awards: During the year ended December 31, 2022, we granted 36,912 time-vesting RSUs to members of our board of directors, which will fully vest on the date of INVH’s 2023 annual stockholders meeting, subject to continued service on the board of directors through such date. During the years ended December 31, 2021 and 2020, INVH issued 43,767 and 58,690 time-vesting RSUs, which awards fully vested on the dates of INVH’s 2022 and 2021 annual stockholders meetings, respectively.

•Merger-Related Awards: During the year ended December 31, 2020, the remaining 66,475 outstanding PRSUs related to the SWH merger vested. Certain of these PRSUs achieved performance in excess of the target level, resulting in the issuance of an additional 4,756 shares of common stock which are reflected as an increase in the number of awards granted and vested in the table below.

•Assumed Awards: During the year ended December 31, 2020, the remaining 61,561 time-vesting RSUs issued by SWH prior to the merger fully vested.

Outperformance Awards

On May 1, 2019, the Compensation Committee approved equity based awards in the form of PRSUs and OP Units (the “2019 Outperformance Awards”). The 2019 Outperformance Awards included market based vesting conditions related to absolute and relative total shareholder returns (“TSRs”) over a three year performance period that ended on March 31, 2022. In April 2022, the absolute TSR and the relative TSR were separately calculated, and the Compensation Committee certified achievement of each at maximum achievement. The number of earned 2019 Outperformance Awards was then determined based on the earned dollar value of the awards (at maximum) and the stock price at the performance certification date, resulting in 311,425 earned PRSUs and 498,224 earned OP Units. Earned awards vested 50% on the certification date in April 2022, and 25% will vest on each of the first and second anniversaries of March 31, 2022, subject to continued employment. The estimated fair value of 2019 Outperformance Awards that fully vested during the year ended December 31, 2022 was $6,134. The aggregate $12,160 grant-date fair value of the 2019 Outperformance Awards that were earned was determined based on Monte-Carlo option pricing models which estimated the probability of achievement of the TSR thresholds. The grant-date fair value is amortized ratably over each vesting period.

On April 1, 2022, the Compensation Committee granted equity based awards with market based vesting conditions in the form of PRSUs and OP Units (the “2022 Outperformance Awards” and together with the 2019 Outperformance Awards, the “Outperformance Awards”). The 2022 Outperformance Awards may be earned based on the achievement of rigorous absolute TSR and relative TSR return thresholds over a three year performance period ending March 31, 2025. The 2022 Outperformance Awards provide that upon completion of 75% of the performance period, or June 30, 2024 (the “Interim Measurement Date”), performance achieved as of the Interim Measurement Date will be calculated consistent with the award terms. To the extent performance through the Interim Measurement Date would result in a payout if the performance period had ended on that date, a minimum of 50% of such hypothetical payout amounts will be guaranteed as a minimum level payout for the full performance period, so long as certain minimum levels of relative TSR are achieved for the full performance period. The final award achievement will be equal to the greater of the payouts determined based on the Interim Measurement Date and performance through March 31, 2025. Upon completion of the performance period, the dollar value of the awards earned under the absolute and relative TSR components will be separately calculated, and the number of earned 2022 Outperformance Awards will be determined based on the earned dollar value of the awards and the stock price at the performance certification date. Earned awards will vest 50% on the certification date and 50% on March 31, 2026, subject to continued employment. 2022 Outperformance Awards with an approximate aggregate $20,800 grant-date fair value have been issued and remain outstanding. The grant-date fair value was determined based on Monte-Carlo option pricing models which estimate the probability of achievement of the TSR thresholds, and it is amortized ratably over each vesting period.

Summary of Total Share-Based Awards

The following table summarizes activity related to non-vested time-vesting RSUs and PRSUs, other than Outperformance Awards, during the years ended December 31, 2022, 2021, and 2020:


	Time-Vesting Awards			PRSUs			Total Share-Based Awards(1)
	Number	Weighted Average Grant Date Fair Value (Actual $)		Number	Weighted Average Grant Date Fair Value (Actual $)		Number	Weighted Average Grant Date Fair Value (Actual $)




Balance, December 31, 2019	685,069	$	22.48	925,076	$	23.13	1,610,145	$	22.86
Granted	225,760	28.25		428,114	29.61		653,874	29.14
Vested(2)	(339,448)	(22.81)		(353,156)	(22.04)		(692,604)	(22.42)
Forfeited / canceled	(11,258)	(25.59)		(24,223)	(23.56)		(35,481)	(24.20)
Balance, December 31, 2020	560,123	24.54		975,811	26.36		1,535,934	25.70
Granted	252,249	30.30		626,325	27.44		878,574	28.26
Vested(2)	(396,185)	(23.44)		(436,493)	(23.31)		(832,678)	(23.37)
Forfeited / canceled	(19,102)	(29.83)		(68,106)	(23.25)		(87,208)	(24.69)
Balance, December 31, 2021	397,085	29.05		1,097,537	28.38		1,494,622	28.56
Granted	339,517	37.39		730,078	31.46		1,069,595	33.34
Vested(2)	(213,884)	(28.84)		(602,994)	(24.67)		(816,878)	(25.76)
Forfeited / canceled	(12,846)	(35.22)		(13,050)	(29.16)		(25,896)	(32.16)
Balance, December 31, 2022	509,872	$	34.54	1,211,571	$	32.08	1,721,443	$	32.81

(1)Total share-based awards excludes Outperformance Awards.

(2)All vested share-based awards are included in basic EPS for the periods after each award’s vesting date. The estimated fair value of share-based awards that fully vested during the years ended December 31, 2022, 2021, and 2020 was $21,154, $18,214, and $12,625, respectively. During the years ended December 31, 2022, 2021, and 2020, 3,084, 1,033, and 2,109 RSUs, respectively, were accelerated pursuant to the terms and conditions of the Omnibus Incentive Plan and related award agreements.

Grant-Date Fair Values

The grant-date fair values of the time-vesting RSUs and PRSUs with performance condition vesting criteria are generally based on the closing price of our common stock on the grant date. However, the grant-date fair values for share-based awards with market condition vesting criteria are based on Monte-Carlo option pricing models. The following table summarizes the significant inputs utilized in these models for such awards granted during the years ended December 31, 2022, 2021, and 2020:


	For the Years Ended December 31,
	2022	2021	2020
Expected volatility(1)	28.9% — 33.6%	33.2%	17.2% — 17.3%
Risk-free rate	1.72% — 2.59%	0.31%	0.85%
Expected holding period (years)	2.84 — 3.00	2.84	2.09 — 2.84

(1)Expected volatility was estimated based on the historical volatility of INVH’s realized returns and of the applicable index.

Summary of Total Share-Based Compensation Expense

During the years ended December 31, 2022, 2021, and 2020, we recognized share-based compensation expense as follows:


	For the Years Ended December 31,

	2022		2021		2020
General and administrative	$	22,469	$	21,743	$	13,579
Property management expense	6,493		5,427		3,511
Total	$	28,962	$	27,170	$	17,090

As of December 31, 2022, there is $37,157 of unrecognized share-based compensation expense related to non-vested share-based awards which is expected to be recognized over a weighted average period of 2.04 years.