EQUITY-BASED COMPENSATION

3 Months Ended

Mar. 31, 2023

Share-Based Payment Arrangement [Abstract]

Our stockholders most recently approved the Cable One, Inc. 2022 Omnibus Incentive Compensation Plan (the “2022 Plan”) at the annual meeting of stockholders held May 20, 2022. The 2022 Plan provides for grants of incentive stock options, non-qualified stock options, restricted stock awards, SARs, restricted stock units (“RSUs”), performance restricted stock units ("PRSUs"), cash-based awards, performance-based awards, dividend equivalent units (“DEUs” and, together with restricted stock awards, RSUs and PRSUs, “Restricted Stock”) and other stock-based awards, including deferred stock units and superseded and replaced the Amended and Restated Cable One, Inc. 2015 Omnibus Incentive Compensation Plan. Directors, officers, employees and consultants of the Company are eligible for grants under the 2022 Plan as part of the Company’s long-term incentive compensation programs. At March 31, 2023, 415,502 shares were available for issuance under the 2022 Plan.

Compensation expense associated with equity-based awards is recognized on a straight-line basis over the requisite service period, which is generally the vesting period of the award, with forfeitures recognized as incurred. The Company’s equity-based compensation expense, included within selling, general and administrative expenses in the condensed consolidated statements of operations and comprehensive income, was as follows (in thousands):


	Three Months Ended March 31,
	2023		2022
Restricted Stock	$	5,210	$	4,637
SARs	375		568
Total	$	5,585	$	5,205

The Company recognized excess tax shortfalls of $1.2 million and excess tax benefits of $0.6 million during the three months ended March 31, 2023 and 2022, respectively. The deferred tax asset related to all outstanding equity-based awards was $5.8 million and $6.6 million as of March 31, 2023 and December 31, 2022, respectively.

Restricted Stock. A summary of Restricted Stock activity during the three months ended March 31, 2023 is as follows:


	Restricted Stock	Weighted Average Grant Date Fair Value Per Share
Outstanding as of December 31, 2022	42,467	$	1,611.99
Granted	65,857	$	696.08
Forfeited	(6,316)	$	1,757.08
Vested and issued	(9,648)	$	1,586.62
Outstanding as of March 31, 2023	92,360	$	951.63

Vested and deferred as of March 31, 2023	6,726	$	866.52

At March 31, 2023, there was $46.5 million of unrecognized compensation expense related to Restricted Stock, which is expected to be recognized over a weighted average period of 2.1 years.

The significant inputs and resulting weighted average grant date fair value for market-based award grants were as follows:


		2023
Risk-free interest rate		4.1	%
Expected volatility		39.1	%
Simulation term		2.99 years
Weighted average grant date fair value	$	774.30

Stock Appreciation Rights. A summary of SARs activity during the three months ended March 31, 2023 is as follows:


	Stock Appreciation Rights	Weighted Average Exercise Price		Weighted Average Grant Date Fair Value		Aggregate Intrinsic Value (in thousands)		Weighted Average Remaining Contractual Term (in years)
Outstanding as of December 31, 2022	41,115	$	1,072.88	$	262.99	$	591	6.1


Forfeited	(375)	$	1,274.05	$	280.58

Outstanding as of March 31, 2023	40,740	$	1,071.03	$	262.83	$	494	5.8

Exercisable as of March 31, 2023	32,990	$	908.39	$	217.83	$	494	5.4

At March 31, 2023, there was $2.5 million of unrecognized compensation expense related to SARs, which is expected to be recognized over a weighted average period of 1.0 year.