Equity and Equity-Based Compensation

9 Months Ended

Sep. 30, 2024

Common Stock Dividends—The board of directors did not declare a quarterly common stock dividend in 2024 or 2023.

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.

In May 2024, 4,000 shares of common stock were issued to independent directors with a fair value of approximately $54,000, which vested immediately upon grant and have been expensed during the nine months ended September 30, 2024.

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. 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 corresponding measurement 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.

At-the-Market-Equity Distribution Agreement—On April 11, 2022, the Company entered into an equity distribution agreement (the “Virtu Equity Distribution Agreement”) with Virtu Americas LLC (“Virtu”), to sell from time to time shares of the Company’s common stock having an aggregate offering price of up to $100 million. We will pay Virtu a commission of approximately 1% of the gross sales price of the shares of our common stock sold. The Company may also sell some or all of the shares of our common stock to Virtu as principal for its own account at a price agreed upon at the time of sale.

The table below summarizes the activity (in thousands):


	Three Months Ended September 30,		Nine Months Ended September 30,
	2024		2024

Common stock issued	120		736
Gross proceeds	$	1,245	$	9,427
Commissions and other expenses	12		94
Net proceeds	$	1,233	$	9,333

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


	Three Months Ended September 30,
	2024		2023

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

Ashford Trust entered into privately negotiated exchange agreements with certain holders of its preferred stock in reliance on Section 3(a)(9) of the Securities Act of 1933, as amended. The table below summarizes the activity (in thousands):


	Three Months Ended September 30, 2024			Nine Months Ended September 30, 2024
	Preferred Shares Tendered	Common Shares Initially Issued	Common Shares Issued (1)	Preferred Shares Tendered	Common Shares Initially Issued	Common Shares Issued (1)
8.45% Series D Cumulative Preferred Stock	49	1,007	101	49	1,007	101
7.375% Series F Cumulative Preferred Stock	58	1,126	113	138	1,863	187
7.375% Series G Cumulative Preferred Stock	30	586	58	59	1,020	102
7.50% Series H Cumulative Preferred Stock	49	896	89	129	1,623	162
7.50% Series I Cumulative Preferred Stock	70	1,346	135	127	2,102	210
	256	4,961	496	502	7,615	762

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

Stock Repurchases—On April 6, 2022, the board of directors approved a stock 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 the previous repurchase authorization that the board of directors authorized in December 2017. No shares of our common stock or preferred stock were repurchased subject to the repurchase program during the three and nine months ended September 30, 2024 and 2023, respectively.