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STOCKHOLDERS' EQUITY | 12 Months Ended
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Dec. 31, 2023
STOCKHOLDERS' EQUITY |
STOCKHOLDERS' EQUITY |
9. | STOCKHOLDERS’ EQUITY
Common Stock – As of December 31, 2023, our restated certificate of incorporation authorized us to issue 900,000,000 shares of common stock with a par value of $0.00001 per share. The following table represents a reconciliation of the Company’s issued common stock shares for the periods presented: ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year Ended December 31,
​ | ​ | 2023 | ​ | 2022 | ​ | 2021
Common stock: | ​ | ​ | ​ | ​ | ​ | ​
Balance, beginning of year | ​ | 171,656,030 | ​ | 155,516,284 | ​ | 146,677,786
Shares issued for stock options exercised | ​ | 832,993 | ​ | 2,105,237 | ​ | 3,155,170
Agent growth incentive stock compensation | ​ | 2,219,881 | ​ | 2,571,569 | ​ | 2,037,942
Agent equity stock compensation | ​ | 8,897,804 | ​ | 11,462,940 | ​ | 3,645,386
Balance, end of year | ​ | 183,606,708 | ​ | 171,656,030 | ​ | 155,516,284
​ The Company’s stockholder approved equity programs described below are administered under the 2015 Equity Incentive Plan. The purpose of the equity plan is to retain the services of valued employees, directors, officers, agents and consultants and to incentivize such persons to make contributions to the Company and motivate excellent performance. Agent Equity Program The Company provides agents and brokers the opportunity to elect to receive 5% of commissions earned from each completed residential real estate transaction in the form of common stock (the “Agent Equity Program” or “AEP”) at a 10% discount recognized by the Company. If agents and brokers elect to receive portions of their commissions in common stock, they are entitled to receive the equivalent number of shares of common stock, based on the fixed monetary value of the commission payable. For the years ended December 31, 2023, 2022 and 2021, the Company issued 8,897,804, 11,462,940 and 3,645,386 shares of common stock, respectively, to agents and brokers for $135,226, $164,104 and $144,437, respectively, net of discount. Agent Growth Incentive Program The Company administers an equity incentive program whereby agents and brokers become eligible to receive awards of the Company’s common stock through agent attraction and performance benchmarks (the “Agent Growth Incentive Program” or “AGIP”). The incentive program encourages greater performance and awards agents with common stock based on achievement of performance milestones. Awards typically vest after performance benchmarks are reached and three years of subsequent service is provided to the Company. Share-based performance awards are based on a fixed-dollar amount of shares based on the achievement of performance metrics. As such, the awards are classified as liabilities until the number of share awards becomes fixed once the performance metric is achieved. For the years ended December 31, 2023, 2022 and 2021, the Company’s stock compensation attributable to the AGIP was $43,178, $30,861 and $24,493, respectively. The total amount of stock compensation attributable to liability classified awards was $3,832, $2,056 and $4,977 for the years ended December 31, 2023, 2022 and 2021, respectively. The following table illustrates changes in the Company’s stock compensation liability for the periods presented:
​ | ​ | ​
​ | ​ | Amount
Stock grant liability balance at December 31, 2021 | ​ | $ 4,341
Stock grant liability increase year to date | ​ | 2,056
Stock grants reclassified from liability to equity year to date | ​ | (2,512)
Balance, December 31, 2022 | ​ | $ 3,885
Stock grant liability increase year to date | ​ | 3,832
Stock grants reclassified from liability to equity year to date | ​ | (2,717)
Balance, December 31, 2023 | ​ | $ 5,000
​ As of December 31, 2023, the Company had 6,706,280 unvested common stock awards and unrecognized compensation costs totaling $65,989 attributable to stock awards where the performance metric has been achieved and the number of shares awarded are fixed. The cost is expected to be recognized over a weighted average period of 1.92 years. The following table illustrates the Company’s stock activity for the Agent Growth Incentive Program for stock awards where the performance metric has been achieved for the following periods:
​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | Weighted Average
​ | ​ | ​ | ​ | Grant Date
​ |  | Shares |  | Fair Value
Balance, December 31, 2021 | ​ | 5,174,654 | ​ | $ 13.92
Granted | ​ | 3,829,990 | ​ | 15.29
Vested and issued | ​ | (2,542,696) | ​ | 6.28
Forfeited | ​ | (762,951) | ​ | 18.80
Balance, December 31, 2022 | ​ | 5,698,997 | ​ | $ 17.68
Granted | ​ | 4,642,035 | ​ | 15.04
Vested and issued | ​ | (2,219,881) | ​ | 11.73
Forfeited | ​ | (1,245,862) | ​ | 17.35
Balance, December 31, 2023 | ​ | 6,875,289 | ​ | $17.80
​ | ​ | ​ | ​ | ​
​ Agent Thrive Program Announced in October 2023, the Thrive program provides a stock incentive to the individual team leaders of teams of culturally aligned teams that join the Company as part of the program. After affiliating with the Company, the team leader becomes eligible to receive an award of the Company’s common stock through team performance benchmarks. Awards typically vest after production benchmarks are reached and three years of subsequent service is provided to the Company. Share-based performance awards are based on a fixed-dollar amount of shares based on the achievement of production metrics. As such, the awards are classified as liabilities until the number of share awards becomes fixed once the production metric is achieved. Stock Option Awards Stock options are granted to directors, officers, certain employees and consultants with an exercise price equal to the fair market value of common stock on the grant date and the stock options expire 10 years from the date of grant. These options have time-based restrictions with equal and periodically graded vesting over a three-year period. The fair value of the options issued was calculated using a Black-Scholes-Merton option-pricing model with the following assumptions: ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | 2023 | ​ | 2022 | ​ | 2021
Expected term | ​ | 5 - 6 years | ​ | 5 - 6 years | ​ | 5 - 6 years
Expected volatility | ​ | 73.64% - 76.78% | ​ | 72.84% - 76.49% | ​ | 68.85% - 86.33%
Risk-free interest rate | ​ | 3.28% - 4.86% | ​ | 1.49% - 4.10% | ​ | 0.44% - 1.33%
Dividend yield | ​ | 0.72% - 1.64% | ​ | 0.53% - 1.48% | ​ | 0.00% - 0.00%
​ | ​ | ​ | ​ | ​ | ​ | ​
​ The following table illustrates the Company’s stock option activity for the following periods: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Weighted
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Average
​ | ​ | ​ | ​ | Weighted | ​ | ​ | ​ | Remaining
​ | ​ | ​ | ​ | Average | ​ | ​ | ​ | Contractual Term
​ |  | Options |  | Exercise Price |  | Intrinsic Value |  | (Years)
Balance December 31, 2021 | ​ | 7,038,660 | ​ | $ 8.70 | ​ | $ 25.45 | ​ | 6.26
Granted | ​ | 1,234,847 | ​ | 19.25 | ​ | - | ​ | 9.37
Exercised | ​ | (2,083,016) | ​ | 0.68 | ​ | 18.10 | ​ | —
Forfeited | ​ | (415,969) | ​ | 13.68 | ​ | 8.74 | ​ | —
Balance at December 31, 2022 | ​ | 5,774,522 | ​ | $ 13.56 | ​ | $ 2.21 | ​ | 7.63
Granted | ​ | 2,468,299 | ​ | 14.81 | ​ | - | ​ | 8.46
Exercised | ​ | (832,993) | ​ | 5.90 | ​ | 14.97 | ​ | —
Forfeited | ​ | (1,198,706) | ​ | 17.77 | ​ | 2.27 | ​ | —
Expired | ​ | (12,578) | ​ | 35.54 | ​ | 0.29 | ​ | —
Balance at December 31, 2023 | ​ | 6,198,544 | ​ | $ 14.23 | ​ | $ 3.62 | ​ | 7.29
Exercisable at December 31, 2023 | ​ | 3,623,819 | ​ | $ 12.30 | ​ | $ 5.31 | ​ | 6.11
Vested at December 31, 2023 | ​ | 3,623,819 | ​ | $ 12.30 | ​ | $ 5.31 | ​ | 6.11
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | Weighted | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | Average | ​ | ​ | ​ | ​
​ | ​ | Options |  | Exercise Price | ​ | ​ | ​ | ​
Range of stock option exercise prices at December 31, 2023: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
$0.01 - $10.00 (average remaining life - 6.12 years) | ​ | 2,573,627 | ​ | $ 8.18 | ​ | ​ | ​ | ​
$10.01 - $30.00 (average remaining life - 8.20 years) | ​ | 3,315,284 | ​ | $ 16.59 | ​ | ​ | ​ | ​
$30.01 - $60.00 (average remaining life - 7.42 years) | ​ | 309,633 | ​ | $ 39.29 | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ The grant date fair value of options to purchase common stock is recorded as stock-based compensation over the vesting period. As of December 31, 2023, unrecognized compensation cost associated with the Company’s outstanding stock options was $22,897, which is expected to be recognized over a weighted-average period of approximately 1.32 years. Stock Repurchase Program In December 2018, the Company’s Board of Directors (the “Board”) approved a stock repurchase program authorizing the Company to purchase up to $25.0 million of its common stock, which was later amended in November 2019 increasing the authorized repurchase amount to $75.0 million. In December 2020, the Board approved another amendment to the repurchase plan, increasing the total amount authorized to be purchased from $75.0 million to $400.0 million. In May 2022, the Board approved an increase to the total amount of its buyback program from $400.0 million to $500.0 million. In June 2023, the Board approved an increase to the total amount of its buyback program from $500.0 million to $1.0 billion. Purchases under the repurchase program may be made in the open market or through a 10b5-1 plan and are expected to comply with Rule 10b-18 under the Exchange Act, as amended. The timing and number of shares repurchased depends upon market conditions. The repurchase program does not require the Company to acquire a specific number of shares. The cost of the shares that are repurchased is funded from cash and cash equivalents on hand. 10b5-1 Repurchase Plan The Company maintains an internal stock repurchase program with program changes subject to Board consent. From time to time, the Company adopts written trading plans pursuant to Rule 10b5-1 of the Exchange Act to conduct repurchases on the open market. On January 10, 2022, the Company and Stephens Inc. entered into a form of Issuer Repurchase Plan (“Issuer Repurchase Plan”) which authorized Stephens to repurchase up to $10.0 million of its common stock per month. On May 3, 2022, the Board approved a form of first amendment to the Issuer Repurchase Plan to increase monthly repurchases from $10.0 million of its common stock per month up to $20.0 million, which amendment was signed May 6, 2022. On September 27, 2022, the Board approved and the Company entered into, a form of second amendment to the Issuer Repurchase Plan, to decrease the monthly repurchases from $20.0 million of its common stock per month to $13.3 million, in anticipation of volume decreases in connection with the contraction in the real estate market. On December 27, 2022, the Board approved and the Company entered into, a form of third amendment to the Issuer Repurchase Plan, to decrease the monthly repurchases from $13.3 million of its common stock per month to $10.0 million, in connection with ongoing contractions in the real estate market. On May 10, 2023, the Board approved and, on May 11, 2023, the Company entered into, a form of fourth amendment to the Issuer Repurchase Plan, to increase the monthly repurchase amounts during 2023 due to actual and projected changes in the Company’s cash and cash equivalents; specifically, to permit purchases of up to: (i) $17.0 million during May 2023, (ii) $22.0 million during June 2023, (iii) $18.67 million during any calendar month commencing July 1, 2023 through and including September 30, 2023, and (iv) $12.0 million during any calendar month commencing October 1, 2023 through and including December 31, 2023. On June 26, 2023, the Board approved, and the Company entered into, a form of fifth amendment to the Issuer Repurchase Plan to increase the maximum aggregate buyback from $500.0 million to $1.0 billion in accordance with the repurchase program limit. On November 17, 2023, the Board approved, and the Company entered into, a form of sixth amendment to the Issuer Repurchase Plan to reduce the monthly repurchase from (i) $12.0 million to $8.0 million during November 2023, (ii) from $12.0 million to $6.0 million during any calendar month commencing December 1, 2023 through and including June 30, 2024. For accounting purposes, common stock repurchased under the stock repurchase programs is recorded based upon the settlement date of the applicable trade. Such repurchased shares are held in treasury and are presented using the cost method. These shares are considered issued but not outstanding. The following table shows the changes in treasury stock shares for the periods presented: ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year Ended December 31,
​ | ​ | 2023 | ​ | 2022 | ​ | 2021
Treasury stock: | ​ | ​ | ​ | ​ | ​ | ​
Balance, beginning of year | ​ | 18,816,791 | ​ | 6,751,692 | ​ | 2,534,494
Repurchases of common stock | ​ | 10,110,152 | ​ | 12,408,430 | ​ | 4,217,198
Forfeiture to treasury stock for acquisition | ​ | 10,728 | ​ | - | ​ | -
Issuance of treasury stock for acquisition | ​ | - | ​ | (343,331) | ​ | -
Balance, end of year | ​ | 28,937,671 | ​ | 18,816,791 | ​ | 6,751,692
​

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