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Stock-Based Compensation | 12 Months Ended
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Dec. 31, 2024
Share-Based Payment Arrangement [Abstract] |
Stock-Based Compensation | (18) Stock-Based Compensation Employee Stock Purchase Plans The 2014 ESPP was adopted by the Board of Directors on February 10, 2014 and approved by the Company’s stockholders on May 5, 2014. The 2014 ESPP authorizes the issuance of up to an aggregate of 2.5 shares of common stock to participating employees. Offerings under the 2014 ESPP commence on June 1 and December 1 and terminate on November 30 and May 31, respectively. Under the 2014 ESPP, eligible employees can purchase shares of common stock through payroll deductions up to 10% of their compensation, up to a defined maximum annual amount. The price at which an employee’s purchase option is exercised for each offering period is the lower of (1) 90% of the closing price of the common stock on the Nasdaq Global Select Market on the day that the offering commences, or (2) 90% of the closing price of the common stock on the day that the offering terminates. The Company issued 0.1 shares of common stock during each of 2024, 2023 and 2022 to employees who participated in the 2014 ESPP at exercise prices of $102.28 and $75.77 per share in 2024, $74.95 and $74.30 per share in 2023, and $111.15 and $75.47 per share in 2022. The Company recorded an immaterial amount of compensation expense related to the 2014 ESPP in 2024, 2023 and 2022. As of December 31, 2024 there were 1.2 shares reserved for future issuance under the 2014 ESPP. Equity Incentive Plans Prior to May 10, 2022, the Company granted RSUs to employees and directors under the 2014 Stock Incentive Plan (the “2014 Plan”). Following shareholder approval of the 2022 Stock Incentive Plan (the “2022 Plan,” and together with the 2014 Plan, the “Plans”) on May 10, 2022, the Company discontinued granting RSUs to employees and directors under the 2014 Plan and began granting them under the 2022 Plan. The Plans are administered by the Compensation Committee of the Company's Board of Directors. The Plans are intended to attract and retain employees and directors, and to provide an incentive for these individuals to assist the Company to achieve long-range performance goals and enable these individuals to participate in the long-term growth of the Company. Up to 6.6 shares of common stock (subject to adjustment in the event of stock splits and other similar events) may be issued pursuant to awards granted under the 2022 Plan. The Company may grant options, RSUs, restricted stock, stock appreciation rights (“SARs”) and other stock-based awards to employees, officers, directors, consultants and advisors under the 2022 Plan. Any full-value awards granted under the 2022 Plan will be counted against the shares reserved for issuance under the 2022 Plan as 1.91 shares for each share of common stock subject to such award. Any award granted under the 2022 Plan that is not a full-value award (including, without limitation, any option or SAR) will be counted against the shares reserved for issuance under the plan on a one-for-one basis of common stock subject to such award. “Full-value award” means any restricted stock, RSUs, or other stock-based award with a per share price or per unit purchase price lower than 100% of fair market value on the date of grant. To the extent an award that is not a full-value award is returned to the 2022 Plan, the share reserve under the 2022 Plan will be credited with one share. To the extent that a full-value award is returned to the 2022 Plan, the share reserve under the 2022 Plan will be credited with 1.91 shares. As of December 31, 2024, there were 3.9 shares reserved for future issuance under the 2022 Plan. Time-based RSUs granted to employees generally vest 33% per year beginning on the first anniversary of the date of grant. Adjusted EBITDA RSUs granted to the Company’s executive officers in 2024, 2023 and 2022 were based on the Company’s achievement of adjusted EBITDA for each respective year, defined as GAAP operating income excluding any charges or income not related to the operating performance of the Company plus depreciation and stock compensation expense, set at varying revenue levels. The final number of Adjusted EBITDA RSUs that vest varies based on the level of performance achieved from 0% to 200% of the underlying target shares granted in 2024, 2023 and 2022. The Adjusted EBITDA RSUs earned generally vest 33% per year beginning on the first anniversary of the date of grant. For rTSR RSUs, the vesting is dependent on the Company's total shareholder return relative to a group of peers over the performance period. RSUs granted to certain employees who meet certain retirement eligibility requirements will vest in full upon each such employee’s retirement and are expensed immediately. RSUs granted to directors generally vest at the earliest of (1) one day prior to the next annual meeting, (2) 13 months from date of grant, or (3) the effective date of a change in control of the Company. The Company determines the fair value of time-based RSUs based on the closing market price of the Company’s common stock on the date of the award. The Company determines the original fair value of Adjusted EBITDA RSUs based upon the closing market price of the Company’s stock on the date of the award and adjusts the fair value quarterly during the first year based upon actual and forecasted results against Adjusted EBITDA targets. The Company estimates the fair value of rTSR RSUs using the Monte Carlo simulation model, which requires the use of highly subjective and complex assumptions, including the price volatility of the underlying stock. The Company recorded an immaterial amount of compensation expense related to the rTSR RSUs in 2024. Such values are recognized as expense on a straight-line basis for time-based awards and rTSR RSUs and using the accelerated graded vesting method for Adjusted EBITDA RSUs, all over the requisite service periods. The following tables present the activity for the RSUs under the Plans:
|  | Year Ended December 31, 2024 |
|  | Quantity |  |  | Weighted Average Grant Date Fair Value Per Share |
RSUs — beginning of period |  |  | 1.0 |  |  | $ | 98.36 |
Granted |  |  | 0.5 |  |  | $ | 121.24 |
Vested or forfeited |  |  | (0.6 | ) |  | $ | 106.42 |
RSUs — end of period |  |  | 0.9 |  |  | $ | 104.83 |
|  | Year Ended December 31, 2023 |
|  | Quantity |  |  | Weighted Average Grant Date Fair Value Per Share |
RSUs — beginning of period |  |  | 0.8 |  |  | $ | 118.96 |
Granted |  |  | 0.7 |  |  | $ | 87.03 |
Vested or forfeited |  |  | (0.5 | ) |  | $ | 117.10 |
RSUs — end of period |  |  | 1.0 |  |  | $ | 98.36 |
|  | Year Ended December 31, 2022 |
|  | Quantity |  |  | Weighted Average Grant Date Fair Value Per Share |
RSUs — beginning of period |  |  | 0.5 |  |  | $ | 127.93 |
RSUs issued in Atotech Acquisition |  |  | 0.1 |  |  | $ | 110.30 |
Granted |  |  | 0.5 |  |  | $ | 111.60 |
Vested |  |  | (0.3 | ) |  | $ | 118.06 |
RSUs — end of period |  |  | 0.8 |  |  | $ | 118.96 |
The total fair value of RSUs vested during 2024, 2023 and 2022 was approximately $66, $40 and $40, respectively. As of December 31, 2024, the unrecognized compensation cost related to RSUs was approximately $45 and will be recognized over an estimated weighted average amortization period of 1 year. Stock-Based Compensation Expense The Company recognized the full impact of its share-based payment plans in the consolidated statements of operations and comprehensive income (loss). The following table reflects the effect of recording stock-based compensation:
|  | Years Ended December 31, |
|  | 2024 |  |  | 2023 |  |  | 2022 |
Stock-based compensation expense by type of award: |  |  |  |  |  |  |  |  |
RSUs |  | $ | 46 |  |  | $ | 51 |  |  | $ | 42 |
Employee stock purchase plan |  |  | 2 |  |  |  | 3 |  |  |  | 3 |
Total stock-based compensation |  |  | 48 |  |  |  | 54 |  |  |  | 45 |
(Excess tax benefit)/shortfall from stock-based compensation |  |  | (5 | ) |  |  | 2 |  |  |  | (1 | )
Net effect on net income (loss) |  | $ | 43 |  |  | $ | 56 |  |  | $ | 44 |
Effect on net earnings (loss) per share: |  |  |  |  |  |  |  |  |
Basic |  | $ | 0.64 |  |  | $ | 0.84 |  |  | $ | 0.74 |
Diluted |  | $ | 0.64 |  |  | $ | 0.84 |  |  | $ | 0.73 |
The pre-tax effect within the consolidated statements of operations and comprehensive income (loss) of recording stock-based compensation was as follows:
|  | Years Ended December 31, |
|  | 2024 |  |  | 2023 |  |  | 2022 |
Cost of revenues |  | $ | 6 |  |  | $ | 6 |  |  | $ | 5 |
Research and development expense |  |  | 7 |  |  |  | 7 |  |  |  | 6 |
Selling, general and administrative expense |  |  | 35 |  |  |  | 41 |  |  |  | 34 |
Total pre-tax stock-based compensation expense |  | $ | 48 |  |  | $ | 54 |  |  | $ | 45 |

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