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Long-term Incentive Compensation | 9 Months Ended
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Sep. 30, 2024
Compensation Related Costs [Abstract] |
Long-term Incentive Compensation | Long-term incentive compensation In April 2022, Excelerate adopted the Excelerate Long-Term Incentive Plan (the “LTI Plan”). The LTI Plan was adopted to promote and closely align the interests of Excelerate's employees, officers, non-employee directors and other service providers and its stockholders by providing stock-based compensation and other performance-based compensation. The LTI Plan allows for the grant of up to 10.8 million shares, stock options, stock appreciation rights, alone or in conjunction with other awards; restricted stock and restricted stock units, including performance units; incentive bonuses, which may be paid in cash, stock or a combination thereof; and other stock-based awards. The share pool increases on January 1st of each calendar year by a number of shares equal to 4% of the outstanding shares of Class A Common Stock on the preceding December 31st. The LTI Plan is administered by the Compensation Committee of the Company’s board of directors. The Company’s stock option and restricted stock unit awards both qualify as equity awards and are amortized into selling, general and administrative expenses and cost of revenue and vessel operating expenses on the consolidated statements of income on a straight-line basis. Stock options were granted to certain employees of Excelerate, vest over five years and expire ten years from the date of grant. The Company also issued restricted stock units to directors and certain employees that vest ratably over one, two or three years. In 2023, the Company issued performance units to certain employees that cliff vest in three years. The performance units contain both a market condition related to Excelerate’s relative total shareholder return as compared to its peer group and a performance condition related to the Company’s EBITDA. In 2024, the Company issued performance units to certain employees that cliff vest in three years. The performance units contain two market conditions, one related to Excelerate’s relative total shareholder return as compared to its peer group and another related to the Company’s annualized absolute total shareholder return. For the three and nine months ended September 30, 2024 and 2023, the Company recognized long-term incentive compensation expense for all of its awards as shown below (in thousands):
|  | For the three months ended September 30, |  |  | For the nine months ended September 30, |
|  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
Stock-based compensation expense | $ | 1,966 |  |  | $ | 1,129 |  |  | $ | 5,263 |  |  | $ | 2,560 |
Stock options The following table summarizes stock option activity for the nine months ended September 30, 2024 and provides information for outstanding and exercisable options as of September 30, 2024:
|  | Number of Options |  |  | Weighted Average Exercise Price |  |  | Weighted Average Remaining Contractual Life |
|  |  |  |  | (per share) |  |  | (years) |
Outstanding at January 1, 2024 |  | 317,601 |  |  | $ | 24.00 |  |  |  |
Granted |  | — |  |  |  | — |  |  |  |
Exercised |  | — |  |  |  | — |  |  |  |
Forfeited or expired |  | (13,654 | ) |  |  | 24.00 |  |  |  |
Outstanding at September 30, 2024 |  | 303,947 |  |  | $ | 24.00 |  |  |  | 7.1 |
Exercisable at September 30, 2024 |  | 135,006 |  |  | $ | 24.00 |  |  |  | 6.5 |
As of September 30, 2024, the Company had $1.9 million in unrecognized compensation costs related to its stock options that it expects to recognize over a weighted average period of 2.5 years. Restricted stock unit awards The following table summarizes restricted stock unit activity for the nine months ended September 30, 2024 and provides information for unvested shares as of September 30, 2024:
|  | Number of Shares |  |  | Weighted Average Fair Value |
|  |  |  |  | (per share) |
Unvested at January 1, 2024 |  | 318,150 |  |  | $ | 20.88 |
Granted |  | 469,655 |  |  |  | 15.04 |
Vested |  | (107,956 | ) |  |  | 21.39 |
Forfeited |  | (5,744 | ) |  |  | 16.51 |
Unvested at September 30, 2024 |  | 674,105 |  |  | $ | 16.72 |
As of September 30, 2024 the Company had $8.5 million in unrecognized compensation costs related to its restricted stock unit awards that it expects to recognize over a weighted average period of 2.0 years. Performance units In 2023, the Company granted performance units that entitle the holder to between zero and two shares of the Company’s Class A Common Stock based on results as compared to performance and market conditions. The performance condition relates to the Company’s EBITDA and the market condition relates to Excelerate’s relative total shareholder return as compared to its peer group. Changes in the Company’s expected EBITDA performance as compared to award metrics will be recorded to the consolidated statement of income over the vesting period. In March 2024, the Company granted performance units that entitle the holder to between zero and two shares of the Company’s Class A Common Stock based on results as compared to two different market conditions, one related to Excelerate’s relative total shareholder return as compared to its peer group and another related to the Company’s annualized absolute total shareholder return. The fair value of the performance units granted in 2024 and 2023 is calculated based on a Monte Carlo simulation of the grant’s market condition, which requires management to make assumptions regarding the risk-free interest rates, expected dividend yields and the expected volatility of the Company’s stock calculated based on a period of time generally commensurate with the expected term of the award. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant. Expected volatility is based on the median of the historical volatility of the companies that comprise the Vanguard Energy ETF market index over the expected life of the granted units. The Company uses estimates of forfeitures to estimate the expected term of the grants. The reversal of any expense due to forfeitures is accounted for as they occur. The table below describes the assumptions used to value the awards granted in 2024 and 2023:
|  | 2024 |  |  | 2023 |
Risk-free interest rate |  | 4.4 | % |  |  | 3.9 | %
Expected volatility |  | 50.6 | % |  |  | 58.0 | %
Expected term | 2.82 years |  |  | 2.76 years |
The following table summarizes performance unit activity for the nine months ended September 30, 2024 and provides information for unvested performance units (reflected at target performance) as of September 30, 2024:
|  | Number of Units |  |  | Weighted Average Fair Value |
|  |  |  |  | (per unit) |
Unvested at January 1, 2024 |  | 84,699 |  |  | $ | 28.80 |
Granted |  | 247,073 |  |  |  | 16.90 |
Vested |  | (2,184 | ) |  |  | 20.39 |
Forfeited |  | (5,525 | ) |  |  | 27.15 |
Unvested at September 30, 2024 |  | 324,063 |  |  | $ | 19.97 |
As of September 30, 2024, the Company had $4.4 million in unrecognized compensation costs related to its performance units that it expects to recognize over a weighted average period of 1.9 years.

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- Definition The entire disclosure for compensation costs, including compensated absences accruals, compensated absences liability, deferred compensation arrangements and income statement compensation items. Deferred compensation arrangements may include a description of an arrangement with an individual employee, which is generally an employment contract between the entity and a selected officer or key employee containing a promise by the employer to pay certain amounts at designated future dates, usually including a period after retirement, upon compliance with stipulated requirements. This type of arrangement is distinguished from broader based employee benefit plans as it is usually tailored to the employee. Disclosure also typically includes the amount of related compensation expense recognized during the reporting period, the number of shares (units) issued during the period under such arrangements, and the carrying amount as of the balance sheet date of the related liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 710 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/710/tableOfContent Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 710 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482969/710-10-50-1 + Details
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