XML 29 R17.htm IDEA: XBRL DOCUMENT
v3.21.2

Stock Incentive Plans | 9 Months Ended
--- | ---
Sep. 30, 2021
Share-based Payment Arrangement [Abstract] |
Stock Incentive Plans | Stock Incentive Plans The following table summarizes the share-based compensation expense recognized for the different stock incentive plans discussed below:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2021 |  | 2020 |  | 2021 |  | 2020
Stock options(1) | $ | 22,180 |  |  | $ | 2,907 |  |  | $ | 47,322 |  |  | $ | 8,134 |
Secondary sales of common stock | — |  |  | 9,050 |  |  | 11,642 |  |  | 10,486 |
Restricted stock units | 15,882 |  |  | — |  |  | 45,948 |  |  | — |
Employee Stock Purchase Plan | 903 |  |  | — |  |  | 981 |  |  | — |
Total | $ | 38,965 |  |  | $ | 11,957 |  |  | $ | 105,893 |  |  | $ | 18,620 |
(1) Includes the share-based compensation expense recognized for employees, non-employees and the CEO Long-Term Performance Award. During the three and nine months ended September 30, 2021, share-based compensation expense recognized for the CEO Long-Term Performance Award was $13.4 million and $24.8 million, respectively.
2011 Equity Incentive Plan In 2011, the Company’s board of directors adopted, and its stockholders approved, the 2011 Equity Incentive Plan, which was most recently amended and restated in 2021 as the Amended and Restated 2011 Equity Incentive Plan, or the 2011 Plan. The 2011 Plan provided for the grant of share-based awards to employees, non-employee directors, and other service providers of the Company. The 2011 Plan was terminated in June 2021 in connection with the IPO, but continues to govern the terms of outstanding awards that were granted prior to the IPO. No further equity awards will be granted under the 2011 Plan. Upon the expiration, forfeiture, cancellation, hold back upon exercise or settlement of an award to satisfy the exercise price or tax withholding, or repurchase of any shares of Class B common stock underlying outstanding share-based awards granted under the 2011 Plan, an equal number of shares of Class A common stock will become available for grant under the 2021 Stock Option and Incentive Plan, or the 2021 Plan, that was established in connection with the IPO. 2021 Stock Option and Incentive Plan In May 2021, the Company’s board of directors adopted, and its stockholders approved, the 2021 Plan, which became effective in connection with the IPO. The 2021 Plan provides for the grant of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock awards, restricted stock units, or RSUs, and other forms of equity and cash compensation. A total of 60,000,000 shares of the Company’s Class A common stock were initially reserved for issuance under the 2021 Plan. The number of shares of Class A common stock reserved and available for issuance under the 2021 Plan will automatically increase each January 1, beginning on January 1, 2022, by 5% of the number of shares of the Company’s Class A and Class B common stock outstanding on the immediately preceding December 31, or such lesser number of shares as determined by the Company’s compensation committee of the Company’s board of directors. 2021 Employee Stock Purchase Plan In May 2021, the Company’s board of directors adopted, and its stockholders approved, the 2021 Employee Stock Purchase Plan, or the ESPP, which became effective in connection with the IPO. The ESPP authorizes the issuance of shares of the Company’s Class A common stock pursuant to purchase rights granted to employees. A total of 6,000,000 shares of the Company’s Class A common stock were initially reserved for issuance under the ESPP. The ESPP provides that the number of shares reserved and available for issuance will automatically increase each January 1, beginning on January 1, 2022, by the lesser of 12,000,000 shares of the Company’s Class A common stock, 1% of the number of shares of the Company’s Class A and Class B common stock outstanding on the immediately preceding December 31, or such lesser number of shares as determined by the Company’s compensation committee. The offering periods of the ESPP are six months long and begin on May 16 and November 16 of each year, except for the initial offering period. The initial offering period began on June 8, 2021 and will end on the last business day occurring on or before November 15, 2021. The price at which Class A common stock is purchased under the ESPP is equal to 85% of the fair market value of a share of the Company’s Class A common stock on the first or last day of the offering period, whichever is lower. Stock Options Under the 2011 Plan and the 2021 Plan, the exercise price of an incentive stock option shall not be less than the fair market value of one share of the Company’s Class A common stock on the date of grant (not less than 110% of the fair market value of one share of Class A common stock for grants to stockholders owning more than 10% of the total combined voting power of all classes of stock of the Company, or a 10% Stockholder. Options are exercisable over periods not to exceed ten years from the date of grant (five years for incentive stock options granted to 10% Stockholders). A summary of the Company's stock option activity under both stock incentive plans was as follows:
| Number of Options |  | Weighted-Average Exercise Price per Share |  | Weighted-Average Remaining Contractual Life |  | Aggregate Intrinsic Value(1)
Balance as of December 31, 2020(2) | 23,421,374 |  |  | $ | 1.35 |  |  | 8.33 years |  | $ | 248,002 |
Granted | 29,113,555 |  |  | 20.07 |  |  |  |  |
Exercised | (3,236,786) |  |  | 1.06 |  |  |  |  |
Canceled and forfeited | (3,241,591) |  |  | 2.89 |  |  |  |  |
Balance as of September 30, 2021(2) | 46,056,552 |  | $ | 13.09 |  |  | 8.66 years |  | $ | 417,075 |
Vested as of September 30, 2021 | 9,922,355 |  | $ | 1.43 |  |  | 6.73 years |  | $ | 219,482 |
(1) Intrinsic value is calculated based on the difference between the exercise price of in-the-money-stock options and the fair value of the common stock as of the respective balance sheet dates. (2) The 2011 Plan allows for early exercise of stock options and these balances include all exercisable stock options regardless of vesting status. As of September 30, 2021, unrecognized compensation costs related to unvested outstanding stock options, excluding the CEO Long-Term Performance Award, was $105.8 million. These costs are expected to be recognized over a period of 2.7 years. The fair value of stock options granted was estimated using the Black-Scholes option pricing model and the following weighted average assumptions:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2021 |  | 2020 |  | 2021 |  | 2020
Dividend yield | 0.0% |  | 0.0% |  | 0.0% |  | 0.0%
Expected volatility | 57.48% |  | 49.93% |  | 54.15% |  | 48.11%
Expected term (in years) | 6.08 |  | 6.02 |  | 6.73 |  | 6.02
Risk-free interest rate | 1.18% |  | 0.36% |  | 1.22% |  | 0.54%
Subsequent to the completion of the IPO, the fair value of the Company’s common stock is determined by the closing price, on the date of grant, of its Class A common stock, which is traded on the Nasdaq Global Select Market. Secondary Sales of Common Stock Prior to the completion of the IPO, certain economic interest holders acquired outstanding common stock from current or former employees for a purchase price greater than the Company's estimated fair value at the time of the transactions. During the three months ended September 30, 2021, the Company did not record any share-based compensation expense related to secondary sales of common stock. During the three months ended September 30, 2020, the Company recorded share-based compensation expense for the difference between the price paid and the estimated fair value on the date of the transaction of $9.0 million. During the nine months ended September 30, 2021 and 2020, the Company recorded share-based compensation expense for the difference between the price paid and the estimated fair value on the date of the transaction of $11.6 million and $10.5 million, respectively. CEO Long-Term Performance Award In April and May 2021, the Company’s board of directors granted the Company’s Chief Executive Officer equity incentive awards in the form of performance-based stock options covering 19,740,923 and 47,267 shares of our Class B common stock with an exercise price of $21.49 and $23.40 per share, respectively, or collectively, the CEO Long-Term Performance Award. The CEO Long-Term Performance Award vests upon the satisfaction of a service condition and the achievement of certain stock price hurdles over a seven year performance period following the expiration of the lock-up period associated with the IPO. The stock price hurdle will be achieved if the average closing price of a share of our Class A common stock during any 90 consecutive trading day period during the performance period equals or exceeds the Company stock price hurdle set forth in the table below. The CEO Long-Term Performance Award is divided into seven equal tranches which vest upon the achievement of the following Company stock price hurdles:
Tranche |  | Company Stock Price Hurdle |  | Number of Options Eligible to Vest
1 |  | $67.50 |  | 2,826,884
2 |  | $78.98 |  | 2,826,884
3 |  | $92.40 |  | 2,826,884
4 |  | $108.11 |  | 2,826,884
5 |  | $126.49 |  | 2,826,884
6 |  | $147.99 |  | 2,826,884
7 |  | $173.15 |  | 2,826,884
Total |  |  |  | 19,788,188
The grant date fair value of the CEO Long-Term Performance Award was estimated using a Monte Carlo simulation model that incorporated multiple stock price paths and probabilities that the Company stock price hurdles are met. The weighted-average grant date fair value of the seven tranches of the CEO Long-Term Performance Award was estimated to be $10.53 per option share. As of September 30, 2021, the aggregate unrecognized compensation cost of the CEO Long-Term Performance Award was $183.6 million, which is expected to be recognized over the remaining derived service period of 4.3 years. Restricted Stock Units Commencing in 2020, the Company began granting RSUs to employees. RSUs granted prior to April 1, 2021 vest upon the satisfaction of both a service condition and a liquidity condition. The service condition for these awards is satisfied over four years. On June 8, 2021, the Company completed its IPO and the liquidity condition for these awards was satisfied and the Company recognized $23.1 million of share-based compensation expense associated with RSUs that had service-vested as of the IPO completion date. Subsequent to the IPO, the unamortized grant date fair value of these RSUs will be recorded as share-based compensation expense over the remaining service period. RSUs granted on or after April 1, 2021, vest upon the satisfaction of a service condition. The service condition for these awards is satisfied over four years. In the three months ended September 30, 2021, the Company recognized $15.9 million of share-based compensation expense related to these RSUs. A summary of the Company's RSUs activity under both stock incentive plans was as follows:
| Number of Restricted Stock Units |  | Weighted-average grant date fair value per share |  |
Balance as of December 31, 2020 | 4,430,336 |  | $ | 4.93 |  |  |
Granted | 7,420,972 |  | 20.58 |  |  |
Vested | (1,985,645) |  | 7.60 |  |  |
Canceled and forfeited | (649,478) |  |  | 11.78 |  |  |
Balance as of September 30, 2021 | 9,216,185 |  | $ | 15.85 |  |  |
During the three and nine months ended September 30, 2021, share-based compensation expense recognized for RSUs was $15.9 million and $45.9 million, respectively. As of September 30, 2021, unrecognized compensation costs related to unvested RSUs was $136.4 million. These costs are expected to be recognized over a period of 3.2 years.

X
- Definition The entire disclosure for share-based payment arrangement. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 + Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsSharebasedPaymentsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration