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SHARE-BASED COMPENSATION | 12 Months Ended
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Dec. 31, 2024
Share-Based Payment Arrangement [Abstract] |
SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION Stock Plan On May 3, 2023, the 2023 Omnibus Incentive Plan (“2023 Plan”) was approved by our shareholders to replace the 2017 Omnibus Incentive Plan and the 2017 Plan for Non-Employee Directors (the “2017 Plans”). The 2023 Plan authorizes the issuance of restricted stock units (“Service RSUs” or “RSUs”), nonqualified stock options (“Options”), time and performance-vesting restricted stock units (“Performance RSUs” or “PSUs”), and stock appreciation rights (“SARs”) to certain employees and directors. Pursuant to the 2023 Plan, 5,240,000 shares of our common stock are reserved for issuance. The 2017 Plans remain in place until all of the awards previously granted thereunder have been paid, forfeited or expired. Shares underlying awards that are canceled or forfeited under the 2017 Plans without the issuance of any shares are added to the 2023 Plan share pool. However, the shares which remained available for issuance under the 2017 Plans are no longer available for issuance, and all future awards will be granted pursuant to the 2023 Plan. On March 4, 2024, we filed a Registration Statement on Form S-8 to register 118,078 shares of common stock, par value $0.01 per share, of HGV’s Common Stock that may be issued under the 2023 Plan in accordance with, and subject to the terms and conditions of, an exception under Rule 303A.08 of the NYSE Listed Company Manual (“Rule 303A.08”). The shares of Common Stock registered represent the number of shares of Bluegreen common stock that were available for issuance under the Bluegreen’s 2021 Incentive Plan immediately prior to the Bluegreen Acquisition, as appropriately adjusted to reflect the Bluegreen Acquisition and assumed by HGV, in accordance with Rule 303A.08. On March 5, 2024, our Board of Directors approved transaction incentive awards (“Transaction Incentive Awards”) in connection with the Bluegreen Acquisition consisting of Performance RSUs and performance-based cash awards (the “Performance Cash Awards”) for certain executive officers and employees. The Transaction Incentive Awards were granted under, and pursuant to the terms and conditions of, the 2023 Plan, and the award agreements approved by the Compensation Committee. The Performance Cash Awards are payable based on the level of achievement of pre-established performance goals relating to run rate cost savings following an 18-month performance period commencing on the Bluegreen Acquisition Date, and ending on June 30, 2025. On September 30, 2024, due to achievement of certain run rate cost savings, fifty percent (50%) of the Performance Cash Awards vested and were payable to certain executive officers and employees. These performance cash awards were included within Acquisition and integration-related expense in our consolidated statements of income for the year ended December 31, 2024. As of December 31, 2024, there were 3,930,194 shares of common stock available for future issuance under the 2023 plan. We recognized share-based compensation expense of $45 million, $39 million and $46 million during the years ended December 31, 2024, 2023 and 2022, respectively. The total tax benefit recognized related to this compensation was $8 million, $6 million and $6 million for the years ended December 31, 2024, 2023 and 2022, respectively. In addition, we withheld common stock shares associated with net share settlements to cover tax withholding obligations upon the vesting of awards under our employee equity incentive program. For the years ended December 31, 2024, 2023 and 2022, we withheld approximately 445,000, 264,000 and 147,000 shares at a total cost of $21 million, $14 million and $8 million, respectively, through net share settlements. Shares withheld to cover tax withholding obligations are retired. As of December 31, 2024, unrecognized compensation cost for unvested awards was approximately $37 million, which is expected to be recognized over a weighted average period of 1.7 years. Service RSUs Service RSUs vest in annual installments over three years from the date of grant, subject to the individual’s continued employment through the applicable vesting date. Vested Service RSUs generally will be settled for common stock. The grant date fair value is equal to closing stock price on the date of grant. The following table provides information about our Service RSU grants for the last three fiscal years:
| Year Ended December 31,
| 2024 |  | 2023 |  | 2022
Number of shares granted | 717,858 |  |  | 537,964 |  |  | 800,378 |
Weighted average grant date fair value per share | $ | 44.00 |  |  | $ | 48.60 |  |  | $ | 44.12 |
Fair value of shares vested (in millions) | $ | 26 |  |  | $ | 23 |  |  | $ | 25 |
The following table summarizes the activity of our RSUs during the year ended December 31, 2024:
| Number of Shares |  | Weighted Average Grant Date Fair Value
Outstanding, beginning of period | 1,144,853 |  |  | 45.21 |
Granted | 717,858 |  |  | 44.00 |
Vested | (588,583) |  |  | 43.64 |
Forfeited | (47,747) |  |  | 45.47 |
Outstanding, end of period | 1,226,381 |  |  | 45.24 |
Options Options vest over three years in annual installments from the date of grant, subject to the individual’s continued employment through the applicable vesting date and will terminate 10 years from the date of grant or earlier on the unvested portion of an individual whose service was terminated. The exercise price is equal to the closing price of the common stock on the date of grant. The following table provides information about our option grants for the last three fiscal years:
| Year Ended December 31,
| 2024 |  | 2023 |  | 2022
Number of options granted | 388,084 |  |  | 301,215 |  |  | 389,536 |
Weighted average exercise price per share | $ | 44.45 |  |  | $ | 49.14 |  |  | $ | 44.09 |
Weighted average grant date fair value per share | $ | 22.63 |  |  | $ | 24.78 |  |  | $ | 20.08 |
The weighted-average grant date fair value of each of these options were determined using the Black-Scholes-Merton option-pricing model with the following assumptions: expected volatility is calculated using the historical volatility of our share price; risk-free rate is based on the Treasury Constant Maturity Rate closest to the expected life as of the grant date; and expected term is estimated using the vesting period and contractual term of the Options:
| Year Ended December 31,
| 2024 |  | 2023 |  | 2022
Expected volatility | 47.7 | % |  | 46.8 | % |  | 45.8 | %
Dividend yield(1) | — | % |  | — | % |  | — | %
Risk-free rate | 4.1% - 4.3% |  | 4.2 | % |  | 1.7 | %
Expected term (in years) | 6.0 |  | 6.0 |  | 6.0
(1)At the date of grant we had no plans to pay dividends during the expected term of these options. The following table summarizes the activity of our options during the year ended December 31, 2024:
| Number of Shares |  | Weighted Average Exercise Price Per Share
Outstanding, beginning of period | 2,417,718 |  |  | $ | 36.65 |
Granted | 388,084 |  |  | 44.45 |
Exercised | (205,463) |  |  | 30.38 |
Forfeited, canceled or expired | (23,361) |  |  | 45.45 |
Outstanding, end of period | 2,576,978 |  |  | 38.24 |
Exercisable, end of period | 1,885,026 |  |  | 35.51 |
As of December 31, 2024, we had 1,885,026 options outstanding that were exercisable with an aggregate intrinsic value of $10 million and weighted average remaining contractual term of approximately 4.9 years. The intrinsic value of all options exercised during the year was $3.1 million. Performance RSUs During the year ended December 31, 2024, we issued 156,809 Performance RSUs with a weighted-average grant date fair value of $44.54. The Performance RSUs are settled at the end of a 3-year performance period, with 50% of the Performance RSUs subject to achievement based on the Company’s adjusted earnings before interest expense, taxes and depreciation and amortization, further adjusted for net deferral and recognition of revenues and related direct expenses related to sales of VOIs of projects under construction. The remaining 50% of the Performance RSUs are subject to the achievement of certain contract sales targets. As part of the Transaction Incentive Awards, we issued 275,477 Performance RSUs with a grant date fair value of $44.32. These Performance RSUs are settled at the end of a 2-year performance period commencing as of the Bluegreen Acquisition Date, with 50% of the Performance RSUs subject to achievement based on the Company’s adjusted earnings before interest expense, taxes and depreciation and amortization, further adjusted for net deferral and recognition of revenues and related direct expenses related to sales of VOIs of projects under construction. The remaining 50% of the Performance RSUs are subject to the achievement of certain run rate cost savings. These Performance RSUs are subject to the executive’s continued employment with the Company. Compensation expense will be recorded through the end of the performance period if it is deemed probable that the performance goals will be met. If the performance goals are not met, no compensation cost will be recognized and any previously recognized compensation cost will be reversed. We determined that the performance conditions for our Performance RSUs are probable of achievement and we recognized compensation expense based on the number of Performance RSUs we expect to vest. The following table provides information about our Performance RSU grants for the last three fiscal years:
| Year Ended December 31,
| 2024 |  | 2023 |  | 2022
Number of shares granted | 432,286 |  |  | 119,887 |  |  | 93,064 |
Weighted average grant date fair value per share | $ | 44.40 |  |  | $ | 49.14 |  |  | $ | 44.09 |
Fair value of shares vested (in millions) | $ | 29 |  |  | $ | 8 |  |  | $ | — |
The following table summarizes the activity of our Performance RSUs during the year ended December 31, 2024:
| Number of Shares |  | Weighted Average Grant Date Fair Value
Outstanding, beginning of period | 560,167 |  |  | $ | 42.77 |
Granted | 432,286 |  |  | 44.40 |
Performance achievement shares adjustment (1) | 272,160 |  |  | 40.96 |
Vested | (714,604) |  |  | 41.03 |
Forfeited, canceled or expired | — |  |  | — |
Outstanding, end of period | 550,009 |  |  | 45.41 |
(1)Reflects the number of shares achieved above target, based on actual performance as determined at the completion of the performance period for the August 2021 and March 2022 Performance RSU grants Employee Stock Purchase Plan In March 2017, the Board of Directors adopted the Hilton Grand Vacations Inc. Employee Stock Purchase Plan (the “ESPP”), which became effective during 2017. In connection with the Plan, we reserved 2.5 million shares of common stock which may be purchased under the ESPP. The ESPP allows eligible employees to purchase shares of our common stock at a price per share not less than 95% of the fair market value per share of common stock on the purchase date, up to a maximum threshold established by the plan administrator for the offering period. For the year ended December 31, 2022, we issued 121,095 shares and recognized less than $1 million of compensation expense related to this plan. During the fourth quarter of 2022, the Board of Directors amended the ESPP plan to allow eligible employees to purchase shares of our common stock at a price per share not less than 85% of the fair market value per share of common stock on the first day of the Purchase Period or the last day of the Purchase Period, whichever is lower, up to a maximum threshold established by the plan administrator for the offering period. The amendment became effective in 2023. During the years ended December 31, 2024 and 2023, we issued 326,330 and 221,562 shares, respectively, and recognized $2 million and $1 million of compensation expense, respectively, related to this plan.

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