Equity and Equity-Based Compensation

3 Months Ended

Mar. 31, 2022

Equity and Equity-Based CompensationCommon Stock Dividends—The board of directors did not declare a quarterly common stock dividend in 2022 or 2021. Restricted Stock—We incur stock-based compensation expense in connection with restricted stock awarded to certain employees of Ashford LLC and its affiliates. We also issue common stock to certain of our independent directors, which vests immediately upon issuance.

Performance Stock Units—The compensation committee of the board of directors of the Company may authorize the issuance of performance stock units (“PSUs”), which have a cliff vesting period of three years, to certain executive officers and directors from time to time. The award agreements provide for the grant of a target number of PSUs that will be settled in shares of common stock of the Company, if, when and to the extent the applicable vesting criteria have been achieved following the end of the performance and service period.

With respect to the 2020 award agreements, the number of PSUs actually earned may range from 0% to 200% of target based on achievement of specified absolute and relative total stockholder returns based on the formulas determined by the Company’s Compensation Committee on the grant date. The performance criteria for the PSUs are based on market conditions under the relevant literature. The corresponding compensation cost is recognized ratably over the service period for the award as the service is rendered, based on the grant date fair value of the award, regardless of the actual outcome of the market condition.

With respect to the 2021 and 2022 award agreements, the criteria for the PSUs are based on performance conditions and market conditions under the relevant literature. The corresponding compensation cost is recognized, based on the grant date fair value of the award, ratably over the service period for the award as the service is rendered, which may vary from period to period, as the number of PSUs earned may vary based on the estimated probable achievement of certain performance targets (performance conditions). The number of PSUs to be earned based on the applicable performance conditions is determined upon the final vesting date. The initial calculation of PSUs earned can range from 0% to 200% of target, which is further subjected to a specified absolute total stockholder return modifier (market condition) based on the formulas determined by the Company’s compensation committee on the grant date. This will result in an adjustment (75% to 125%) of the initial calculation for the number of PSUs earned based on the applicable performance targets resulting in a final award calculation ranging from 0% to 250% of the target amount.

In March 2022, 34,000 PSUs with a fair value of $344,000 and a vesting period of three years were grantedCommon Stock Resale Agreement—On September 9, 2021, the Company and M3A LP (“M3A”) entered into a purchase agreement (the “M3A Purchase Agreement”) pursuant to which the Company may issue or sell to M3A up to 6.0 million shares of the Company’s common stock from time to time during the term of the M3A Purchase Agreement. Meanwhile, both parties also entered into a registration rights agreement, pursuant to which the Company agreed to file a registration statement with the SEC covering the resale of shares of common stock that are issued to M3A under the M3A Purchase Agreement. The Company originally filed a registration statement on Form S-11 on September 10, 2021, which was declared effective by the SEC on September 29, 2021. In connection with the Company’s recent eligibility to use a Form S-3, the Company filed a registration statement on Form S-3, which was declared effective by the SEC on April 1, 2022, to replace the previous Form S-11 and to register for resale any future resales by M3A under the M3A Purchase Agreement. As of March 31, 2022, the Company had issued 900,000 shares. The Company did not issue any shares during the three months ended three months ended March 31, 2022 and 2021.

Preferred Dividends—The board of directors declared quarterly dividends per share as presented below:


	Three Months Ended March 31,
	2022		2021

8.45% Series D Cumulative Preferred Stock	$	0.5281	$	—
7.375% Series F Cumulative Preferred Stock	0.4609		—
7.375% Series G Cumulative Preferred Stock	0.4609		—
7.50% Series H Cumulative Preferred Stock	0.4688		—
7.50% Series I Cumulative Preferred Stock	0.4688		—

From December 8, 2020 through December 31, 2021, Ashford Trust entered into privately negotiated exchange agreements with certain holders of its 8.45% Series D Cumulative Preferred Stock, 7.375% Series F Cumulative Preferred Stock, 7.375% Series G Cumulative Preferred Stock, 7.50% Series H Cumulative Preferred Stock and 7.50% Series I Cumulative Preferred Stock in reliance on Section 3(a)(9) of the Securities Act of 1933, as amended (the “Securities Act”).

The table below summarizes the activity (in thousands):


	Three Months Ended March 31, 2021
		Preferred Shares Tendered	Common Shares Initially Issued	Common Shares Issued (1)
8.45% Series D Cumulative Preferred Stock		112	787	79
7.375% Series F Cumulative Preferred Stock		853	5,704	570
7.375% Series G Cumulative Preferred Stock		1,251	8,980	898
7.50% Series H Cumulative Preferred Stock		667	4,817	482
7.50% Series I Cumulative Preferred Stock		1,391	9,148	915
		4,274	29,436	2,944

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(1) Reflects the number of shares issued after the adjustment for the reverse stock split.

Stock Repurchases—On December 5, 2017, the board of directors reapproved a stock repurchase program (the “2017 Repurchase Program”) pursuant to which the board of directors granted a repurchase authorization to acquire shares of the Company’s common stock and preferred stock having an aggregate value of up to $200 million. The board of directors’ authorization replaced any previous repurchase authorizations. No shares of our common stock or preferred stock were repurchased under the 2017 Repurchase Program during the three months ended March 31, 2022 and 2021, respectively. On April 6, 2022 the board of directors approved a new stock repurchase program.