Stock-Based Compensation

6 Months Ended

Jun. 30, 2021

Share-based Payment Arrangement [Abstract]

Stock Options

A summary of activity in connection with our stock options for the six months ended June 30, 2021, is as follows (number of shares in thousands):


	Number of Shares	Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Life in Years
Options outstanding as of December 31, 2020	1,168	$	11.77	5.0
Options granted	—	—
Options exercised	(120)	5.37
Options cancelled/forfeited	—	—
Options outstanding as of June 30, 2021	1,048	$	12.50	3.2

Our stock-based compensation expense for stock options for the three and six months ended June 30, 2021 and 2020 was not material.

The fair value of stock options is estimated on their date of grant using the Black-Scholes option-pricing model. No stock options were granted during the six months ended June 30, 2021 or 2020.

Restricted Stock Units

A summary of activity in connection with our RSUs for the six months ended June 30, 2021, is as follows (number of shares in thousands):


	Number of Shares	Weighted Average Grant Date Fair Value per Share
Unvested as of December 31, 2020	483	$	80.20
Granted	194	140.30
Vested	(158)	60.18
Forfeited	(21)	105.98
Unvested as of June 30, 2021	498	$	108.77

During the six months ended June 30, 2021, we granted 159,000 RSUs that are subject to time-based vesting in equal annual installments over four years, and 35,000 PSUs that are subject to vesting based on the achievement of pre-established consolidated net revenue growth targets for the years ending December 31, 2022 and 2023, assuming continued employment throughout the performance period. The number of PSUs granted, as included in the above table, assumes achievement of the performance metric at 100% of the performance target. The actual number of shares to be issued at the end of the performance period will range from 0% to 100% of the initial target awards. Achievement of the performance metric between 100% and 150% of the performance target will result in a performance-based cash bonus payment between 0% and 65% of the initial target awards.

During the six months ended June 30, 2021, 50,000 PSUs vested based on the achievement of 106% of the pre-established consolidated net revenue growth performance target for the year ended December 31, 2020 and additional performance-based cash bonuses equal to 12% of the target value of such vested PSUs were also paid.

Included in the unvested RSUs as of June 30, 2021 are 34,000, 12,000, 31,000 and 35,000 PSUs granted in 2021, 2020, 2019 and 2018, respectively. Of these PSUs, 45,000 are subject to vesting based on the achievement of a pre-established consolidated net revenue growth target for the year ending December 31, 2021, 39,000 are subject to vesting based on the achievement of a pre-established consolidated net revenue growth target for the year ending December 31, 2022, and 28,000 are subject to vesting based on the achievement of a pre-established consolidated net revenue growth target for the year ending December 31, 2023. The number of PSUs granted assumes achievement of the performance metric at 100% of the performance target. The actual number of shares to be issued at the end of the performance period will range from 0% to 100% of the initial target awards. Achievement of the performance metric between 100% and 150% of the performance target will result in a performance-based cash bonus payment between 0% and 65% of the initial target awards.

We recognize expense for PSUs based on the grant date fair value of the PSUs that we determine are probable of vesting. Adjustments to compensation expense are made each period based on changes in our estimate of the number of PSUs that are probable of vesting. Our stock-based compensation expense for RSUs and PSUs for the three months ended June 30, 2021 and 2020 was $3.7 million and $3.2 million, respectively, and $6.8 million and $4.4 million for the six months ended June 30, 2021 and 2020, respectively.

During the six months ended June 30, 2021, we granted an award of 7,688 PSUs to an executive that vest based on achievement of certain pre-established individual performance metrics during fiscal year 2021, for which the achievement is approved on a pass/fail basis by the Board of Directors in its sole discretion after taking into account the recommendation of the President and Chief Executive Officer. The service inception date precedes the grant date for this award as (a) the award was authorized prior to establishing an accounting grant date, (b) the recipient began providing services prior to the grant date and (c) there are performance conditions that, if not met by the accounting grant date, will result in the forfeiture of the award. As the service inception date precedes the grant date, we recognize stock-based compensation expense on a straight-line basis over the requisite service period based on the fair value at each reporting date. Our stock-based compensation expense for this award for the six months ended June 30, 2021 was $0.5 million.

As of June 30, 2021, the total estimated remaining stock-based compensation expense for the aforementioned RSUs and PSUs was $39.4 million, which is expected to be recognized over a weighted average period of 2.6 years.

Restricted Stock Awards

A summary of activity in connection with our restricted stock awards for the six months ended June 30, 2021 is as follows (number of shares in thousands):


	Number of Shares	Weighted Average Grant Date Fair Value per Share
Unvested as of December 31, 2020	5	$	153.41
Granted	4	144.33
Vested	(3)	160.34
Forfeited	—	—
Unvested as of June 30, 2021	6	$	143.74

We have the right to repurchase any unvested restricted stock awards subject to certain conditions. Restricted stock awards vest over a one-year period. We recognized stock-based compensation expense for restricted stock awards of $0.2 million and $0.2 million for the three months ended June 30, 2021 and 2020, respectively, and $0.3 million and $0.3 million for the six months ended June 30, 2021 and 2020, respectively.

As of June 30, 2021, the total estimated remaining stock-based compensation expense for unvested restricted stock awards with a repurchase right was $0.7 million, which is expected to be recognized over a weighted average period of 0.9 years.