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Equity-Based Compensation
3 Months Ended
Mar. 31, 2022
Share-based Payment Arrangement [Abstract]  
Equity-Based Compensation Equity-Based Compensation
The Company has granted restricted stock awards (“RSAs”), restricted stock units (“RSUs”), performance share units (“PSUs”), leveraged stock units (“LSUs”) and phantom unit awards under the 2020 Long Term Incentive Plan. In accordance with the FASB’s authoritative guidance for share-based payments, the Company accounts for the RSAs, RSUs, PSUs and LSUs as equity classified awards and the phantom unit awards as liability classified awards.
Equity-based compensation expense from continuing operations is recognized in general and administrative expenses on the Company’s Consolidated Statements of Operations. The Company recognized as part of continuing operations $4.8 million and $1.7 million in equity-based compensation expense related to equity classified awards during the three months ended March 31, 2022 and 2021, respectively. Equity-based compensation expense related to liability classified awards was not material during the three months ended March 31, 2022 and 2021.
Equity-based compensation expense from discontinued operations is recognized in income from discontinued operations, net of income tax on the Company’s Consolidated Statements of Operations. Equity-based compensation expense related to equity classified awards was not material during the three months ended March 31, 2022 and 2021. The Company recognized $1.9 million in equity-based compensation expense related to liability classified awards attributable to discontinued operations during the three months ended March 31, 2022. Equity-based compensation expense related to liability classified awards attributable to discontinued operations was not material during the three months ended March 31, 2021.
Restricted stock awards. RSAs are legally issued shares which vest over a three-year period subject to a service condition. The fair value of RSAs is based on the closing sales price of the Company’s common stock on the date of grant or, if applicable, the date of modification. Compensation expense is recognized ratably over the requisite service period. No RSAs were granted during the three months ended March 31, 2022.
Restricted stock units. RSUs are contingent shares that are scheduled to vest 25% each year over a four-year period. The fair value is based on the closing price of the Company’s common stock on the date of grant or, if applicable, the date of modification. Compensation expense is recognized ratably over the requisite service period. No RSUs were granted during the three months ended March 31, 2022.
Performance share units. PSUs are contingent shares that may be earned over three-year and four-year performance periods. The number of PSUs to be earned is subject to a market condition, which is based on a comparison of the total shareholder return (“TSR”) achieved with respect to shares of the Company’s common stock against the TSR achieved by a defined peer group at the end of the applicable performance periods, with 50% of the PSU awards eligible to be earned based on performance relative to a certain group of the Company’s oil and gas peers and 50% of the PSU awards eligible to be earned based on performance relative to the broad-based Russell 2000 index. Depending on the Company’s TSR performance relative to the defined peer group, award recipients may earn between 0% and 150% of target. No PSUs were granted during the three months ended March 31, 2022.
Leveraged stock units. LSUs are contingent shares that may be earned over a three-year or four-year performance period. The number of LSUs to be earned is subject to a market condition, which is based on the TSR performance of the Company’s common stock measured against specific premium return objectives. Depending on the Company’s TSR performance, award recipients may earn between 0% and 300% of target; however, the number of shares delivered in respect to these awards during the grant cycle may not exceed ten times the fair value of the award on the grant date. No LSUs were granted during the three months ended March 31, 2022.