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Stock-Based Compensation | 12 Months Ended
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Dec. 31, 2023
Share-Based Payment Arrangement [Abstract] |
Stock-Based Compensation | Stock-Based Compensation Total stock‑based compensation expense consists of the following:
| Year Ended December 31,
| 2023 |  | 2022 |  | 2021
Restricted stock and restricted stock units (“RSUs”) expense | $ | 54,606 |  |  | $ | 40,754 |  |  | $ | 19,917 |
Bonus Plan expense (see Note 11) | 14,801 |  |  | 28,571 |  |  | 23,121 |
ESPP expense (see Note 13) | 2,407 |  |  | 2,890 |  |  | 2,118 |
Stock grants expense | 600 |  |  | 450 |  |  | 445 |
Stock option expense | 343 |  |  | 2,150 |  |  | 3,271 |
DCP elective participant deferrals expense (1) (see Note 12) | 215 |  |  | 391 |  |  | 173 |
Total stock-based compensation expense (2) | $ | 72,972 |  |  | $ | 75,206 |  |  | $ | 49,045 |
(1)DCP elective participant deferrals expense excludes deferred incentive bonus payable pursuant to the Bonus Plan. (2)As of December 31, 2023 and 2022, $4,043 and $7,300 remained in Accruals and other current liabilities in the consolidated balance sheets, respectively. Total stock‑based compensation expense is included in the consolidated statements of operations as follows:
| Year Ended December 31,
| 2023 |  | 2022 |  | 2021
Cost of subscriptions and licenses | $ | 4,444 |  |  | $ | 2,781 |  |  | $ | 1,442 |
Cost of services | 3,196 |  |  | 2,055 |  |  | 1,257 |
Research and development | 19,380 |  |  | 27,209 |  |  | 19,740 |
Selling and marketing | 11,565 |  |  | 8,898 |  |  | 5,980 |
General and administrative | 34,387 |  |  | 34,263 |  |  | 20,626 |
Total stock-based compensation expense | $ | 72,972 |  |  | $ | 75,206 |  |  | $ | 49,045 |
Stock‑based compensation expense is measured at the grant date fair value of the award and is recognized ratably over the requisite service period, which is generally the vesting period. Specifically for performance‑based RSUs, stock‑based compensation expense is measured at the grant date fair value of the award and is recognized ratably over the requisite service period based on the number of awards expected to vest at each reporting date. The Company accounts for forfeitures of equity awards as those forfeitures occur. The fair value of the common stock during periods prior to the IPO was determined by the Board of Directors at each award grant date based upon a variety of factors, including the results obtained from independent third‑party valuations, the Company’s financial condition, and historical financial performance. Restricted Stock and RSUs Under the equity incentive plans, the Company may grant both time‑based and performance‑based shares of restricted Class B common stock and RSUs to eligible colleagues. Time‑based awards generally vest ratably on each of the first four anniversaries of the grant date. Performance‑based awards vesting is determined by the achievement of certain business growth targets, which include growth in ARR, as well as actual bookings for perpetual licenses and non‑recurring services. Performance targets are generally set for performance periods of one year to three years. The fair value of restricted stock and RSUs is determined by the product of the number of shares granted and the Company’s common stock price on the grant date. Shares of restricted stock have voting rights and, subject to the terms of the award agreements, the time‑based restricted stock awards generally accrue declared dividends which are paid upon vesting. RSUs, which may be cash or share‑settled depending on the award, do not have voting rights, but, subject to the terms of the award agreements, generally accrue declared dividends which are paid upon vesting. Beginning with the April 2021 grant, time‑based RSUs have dividend equivalent rights and do not accrue cash dividends. Certain historical RSUs granted in 2016 under the Company’s amended and restated 2015 Equity Incentive Plan (the “2015 Equity Incentive Plan”) have dividend equivalent rights and do not accrue cash dividends. Recipients of the Company’s outstanding performance‑based restricted stock awards and RSUs are paid dividends prior to vesting. The following is a summary of unvested restricted stock and RSU activity and related information under the Company’s applicable equity incentive plans:
|  |  |  |  |  |  | Time- |  | Performance-
|  |  |  |  |  |  | Based |  | Based
|  |  | Time- |  |  |  | Weighted |  | Weighted
| Total |  | Based |  |  |  | Average |  | Average
| Restricted |  | Restricted |  | Performance- |  | Grant Date |  | Grant Date
| Stock |  | Stock |  | Based |  | Fair Value |  | Fair Value
| and RSUs |  | and RSUs |  | RSUs |  | Per Share |  | Per Share
Unvested, December 31, 2022 | 3,068,851 |  |  | 2,706,078 |  | (3) | 362,773 |  | (4) | $ | 36.67 |  |  | $ | 38.21 |
Granted | 1,467,585 |  | (1) | 1,268,939 |  |  | 198,646 |  | (5) | 42.79 |  | 39.14
Vested | (997,938) |  |  | (840,778) |  |  | (157,160) |  |  | 35.36 |  |  | 38.20 |
Forfeited and canceled | (234,649) |  |  | (196,031) |  |  | (38,618) |  |  | 34.02 |  |  | 33.59 |
Unvested, December 31, 2023 | 3,303,849 |  | (2) | 2,938,208 |  |  | 365,641 |  |  | $ | 39.87 |  |  | $ | 39.21 |
(1)For the year ended December 31, 2023, the Company only granted RSUs. (2)Includes 55,905 RSUs which are expected to be settled in cash. (3)Includes 199,076 time‑based RSUs granted during the three months ended March 31, 2022 to certain officers and key employees, which cliff vest on January 31, 2025. (4)Primarily relates to the 2022 annual performance period, except for 185,186 performance‑based RSUs granted during the year ended December 31, 2022 with extraordinary terms, which are described below. (5)Primarily relates to the 2023 annual performance period, except for 13,367 additional shares earned based on the achievement of 2022 performance goals for performance‑based RSUs granted during the year ended December 31, 2022. During the year ended December 31, 2022, the Company granted 185,186 performance‑based RSUs to certain officers and key employees, which vest subject to the achievement of certain performance goals over a three‑year performance period (the “Performance Period”). For each year of the Performance Period, one‑third of the performance‑based RSUs will be subject to a cliff, whereby no vesting of that portion will occur unless the Company’s applicable margin metrics (which, for 2022, was Adjusted EBITDA margin and for 2023 and 2024, will be Adjusted OI w/SBC margin, excluding the impact of foreign currency exchange fluctuations) also equals or exceeds the relevant target level for such year. Provided that the applicable margin targets are met, the total number of performance‑based RSUs that will vest is determined by the achievement of growth targets, which include growth in ARR, as well as actual bookings for perpetual licenses and non‑recurring services. Final actual vesting will be determined on January 31, 2025. The 2023 Adjusted OI w/SBC margin target, excluding the impact of foreign currency exchange fluctuations, and the 2022 Adjusted EBITDA margin target for the performance-based RSUs were met. In 2016, the Company granted RSUs subject to performance‑based vesting as determined by the achievement of certain business growth targets. Certain colleagues elected to defer delivery of such shares upon vesting. During the years ended December 31, 2023, 2022, and 2021, 1,562, 10,888, and 10,864 shares, respectively, were delivered to colleagues, and 36, 30, and 45 additional shares, respectively, were earned as a result of dividends. As of December 31, 2023, 2022, and 2021, 7,837, 9,363, and 20,221 shares, respectively, of these vested and deferred RSUs remained outstanding. The weighted average grant date fair values of RSUs granted were $42.29, $38.18, and $52.48 for the years ended December 31, 2023, 2022, and 2021, respectively. For the years ended December 31, 2023, 2022, and 2021, restricted stock and RSUs were issued net of 161,841, 112,698, and 125,825 shares, respectively, which were sold back to the Company to settle applicable income tax withholdings of $7,299, $4,491, and $7,293, respectively. As of December 31, 2023, there was $82,891 of unrecognized compensation expense related to unvested time‑based restricted stock and RSUs, which is expected to be recognized over a weighted average period of approximately 1.7 years. As of December 31, 2023, there was $2,609 of unrecognized compensation expense related to unvested performance‑based RSUs, which is expected to be recognized over a weighted average period of approximately 1.0 years. Stock Grants Under the equity incentive plans, the Company may grant unrestricted, fully vested shares of Class B common stock. The fair value of stock grants is determined by the product of the number of fully vested Class B common stock granted and the Company’s common stock price on the grant date. The total expense related to stock grants is recognized on the grant date as the issued awards are fully vested. For the years ended December 31, 2023, 2022, and 2021, the Company granted 12,639, 13,632, and 7,824 fully vested shares of Class B common stock, respectively. Stock Options The fair value of each stock option award was estimated on the date of grant using the Black‑Scholes option pricing model. Stock options generally vest ratably on each of the first four anniversaries of the grant date. The Company did not grant stock options during the years ended December 31, 2023, 2022, and 2021. The following is a summary of stock option activity and related information under the Company’s applicable equity incentive plans:
|  |  |  |  | Weighted |  |
|  |  | Weighted |  | Average |  |
|  |  | Average |  | Remaining |  | Aggregate
| Stock |  | Exercise Price |  | Contractual |  | Intrinsic
| Options |  | Per Share |  | Life (in years) |  | Value
Outstanding, December 31, 2022 | 3,794,515 |  |  | $ | 5.57 |  |  |  |  |
Exercised | (2,860,586) |  |  | 5.52 |  |  |  |  |
Forfeited and expired | (17,500) |  |  | 5.68 |  |  |  |  |
Outstanding, December 31, 2023 | 916,429 |  |  | $ | 5.74 |  |  | 0.2 |  | $ | 42,559 |
Exercisable, December 31, 2023 | 916,429 |  |  | $ | 5.74 |  |  | 0.2 |  | $ | 42,559 |
For the years ended December 31, 2023, 2022, and 2021, the Company received cash proceeds of $11,715, $8,338, and $5,605, respectively, related to the exercise of stock options. The total intrinsic value of stock options exercised for the years ended December 31, 2023, 2022, and 2021 was $112,025, $101,643, and $270,614, respectively. As of December 31, 2023, there was no remaining unrecognized compensation expense related to unvested stock options. Acquisition Options In addition to stock options granted under the Company’s equity incentive plans, in connection with an acquisition completed in March 2018, the Company issued to certain selling shareholder entities options to acquire an aggregate of up to 900,000 shares of Class B common stock. As of December 31, 2020, the Company fully recognized the stock‑based compensation expense associated with these options. During the year ended December 31, 2022, 900,000 options were exercised. No acquisition options remain outstanding as of December 31, 2022. ESPP The ESPP is considered a compensatory plan as it provides eligible colleagues an option to purchase shares of the Company’s Class B common stock for 85% of the lower of the price of the first day of the offering period or the last day of the offering period (i.e., the purchase date). The fair value of each purchase right under the ESPP was calculated as the sum of its components, which includes the discount, a six‑month call option, and a six‑month put option. The call and put options were valued using the Black‑Scholes option pricing model. Stock‑based compensation expense is recognized ratably over the respective offering period. Equity Incentive Plans The Company’s 2020 Incentive Award Plan provides for the granting of stock, stock options, restricted stock, RSUs, and other stock‑based or performance‑based awards to certain directors, officers, colleagues, consultants, and advisors of the Company, and terminates in September 2030. The 2020 Incentive Award Plan provides that 25,000,000 shares of Class B common stock may be issued for equity awards. Equity awards that are expired, canceled, forfeited, or terminated for any reason will be available for future grant under the 2020 Incentive Award Plan. As of December 31, 2023, equity awards available for future grants under the 2020 Incentive Award Plan were 20,946,599. The Company also has equity awards outstanding under the 2015 Equity Incentive Plan, which terminates in November 2024. Following the completion of the IPO, no further awards may be granted under the 2015 Equity Incentive Plan.

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- Definition The entire disclosure for shareholders' equity and share-based payment arrangement. Includes, but is not limited to, disclosure of policy and terms of share-based payment arrangement, deferred compensation arrangement, and employee stock purchase plan (ESPP). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 505 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//505/tableOfContent Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 718 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//718/tableOfContent + Details
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