Equity Compensation Plans

6 Months Ended

Jun. 30, 2023

Share-Based Payment Arrangement [Abstract]

During the three months ended June 30, 2023, Redwood shareholders approved an additional 9,650,000 shares of common stock for grant under our Incentive Plan. At June 30, 2023 and December 31, 2022, 12,202,334 and 2,896,604 shares of common stock, respectively, were available for grant under our Incentive Plan. The unamortized compensation cost of awards issued under the Incentive Plan, which are settled by delivery of shares of common stock, and purchases under the Employee Stock Purchase Plan, totaled $36 million at June 30, 2023, as shown in the following table.

Table 19.1 – Activities of Equity Compensation Costs by Award Type


	Six Months Ended June 30, 2023
(In Thousands)	Restricted Stock Units		Deferred Stock Units		Performance Stock Units		Employee Stock Purchase Plan		Total
Unrecognized compensation cost at beginning of period	$	5,068	$	19,849	$	15,271	$	—	$	40,188
Equity grants	1,992		6,825		—		422		9,239
Performance-based valuation adjustment	—		—		(1,719)		—		(1,719)
Equity grant forfeitures	(288)		(519)		—		—		(807)
Equity compensation expense	(2,100)		(6,554)		(2,394)		(212)		(11,260)
Unrecognized Compensation Cost at End of Period	$	4,672	$	19,601	$	11,158	$	210	$	35,641

At June 30, 2023, the weighted average amortization period remaining for all of our equity awards was less than two years.

Restricted Stock Units ("RSUs")

At June 30, 2023 and December 31, 2022, there were 677,297 and 806,119 RSUs outstanding, respectively. During the six months ended June 30, 2023, there were 250,852 RSUs granted, 351,099 RSUs distributed, and 28,575 RSUs forfeited. Unvested RSUs at June 30, 2023 vest through 2027.

Deferred Stock Units (“DSUs”)

At June 30, 2023 and December 31, 2022, there were 4,999,106 and 4,831,338 DSUs outstanding, respectively, of which 2,640,535 and 2,495,787, respectively, had vested. During the six months ended June 30, 2023, there were 912,128 DSUs granted, 726,392 DSUs distributed, and 17,968 DSUs forfeited. Unvested DSUs at June 30, 2023 vest through 2027.

Performance Stock Units (“PSUs”)

At June 30, 2023 and December 31, 2022, the target number of PSUs that were unvested was 2,078,171 and 2,354,002, respectively. Vesting for PSUs generally occurs three years from their respective grant dates based on various total shareholder return performance calculations, as discussed in Note 19 to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2022.

For 275,831 target PSU awards that were granted in December 2019, the performance vesting period ended on January 1, 2023. These 2019 PSU awards failed to reach a threshold level under their performance-based vesting criteria and resulted in the vesting of no shares of our common stock underlying these PSUs. During the three months ended June 30, 2023, for PSUs granted in 2021 and 2020, we adjusted the cumulative expected amortization expense down by $2 million to reflect our revised vesting estimate regarding the vesting of these awards in relation to the book value TSR performance condition for the second-year vesting tranche of the 2021 PSU grant and the third-year vesting tranche of the 2020 PSU grant.

Employee Stock Purchase Plan ("ESPP")

The ESPP allows a maximum of 850,000 shares of common stock to be purchased in aggregate for all employees. As of June 30, 2023 and December 31, 2022, 713,659 and 657,777 shares had been purchased, respectively, and there remained a negligible amount of uninvested employee contributions in the ESPP at June 30, 2023.