Stock-based Payments and Director Fees

6 Months Ended

Jun. 30, 2020

Share-based Payment Arrangement [Abstract]

Pursuant to the terms of the Management Agreement, the Company may pay a portion of the base fee to the Manager in shares of its common stock with the number of shares determined based on the average of the closing prices of its common stock on the NYSE on the five business days preceding the date on which the most recent regular quarterly dividend to holders of its common stock is paid. The Company recognized a base management fee to the Manager for the three and six months ended June 30, 2020 of $2.1 million and $3.9 million, of which none was payable in shares of its common stock as the Board of Directors approved the management fee to be paid in all cash. Comparatively, for the three and six months ended June 30, 2019, the Company recognized a base management fee of $1.6 million and $3.2 million, respectively, of which $0.8 million and $1.6 million, respectively, was payable in shares of its common stock.

In addition, through the first quarter of 2019, each of the Company’s independent directors received an annual retainer of $75,000, payable quarterly, half of which was paid in shares of the Company’s common stock on the same basis as the stock portion of the management fee payable to the Manager and half in cash. The annual fee was increased to $100,000, 40% of which is payable in shares of the Company's common stock and 60% in cash, which became effective as of April 1, 2019.

The following table sets forth the Company’s stock-based management fees and independent director fees ($ in thousands):

Stock-based Management Fees and Director Fees


	For the three months ended June 30,
	2020				2019
	Number of shares	Amount of expense recognized⁽¹⁾		Number of shares	Amount of expense recognized⁽¹⁾
Independent director fees	5,200	$	40	2,836	$	40
Management fees	—	—		58,398	824
Totals	5,200	$	40	61,234	$	864


	For the six months ended June 30,
	2020				2019
	Number of shares	Amount of expense recognized⁽¹⁾		Number of shares	Amount of expense recognized⁽¹⁾
Independent director fees	8,668	$	80	5,600	$	78
Management fees	—	—		120,699	1,552
Totals	8,668	$	80	126,299	$	1,630

(1)All management fees and independent director fees are fully expensed in the period in which the relevant service is received by the Company.

Restricted Stock

Each independent director is issued a restricted stock award of 2,000 shares of the Company’s common stock subject to a one-year vesting period upon initial appointment to the Company’s Board of Directors. On August 17, 2016, the Company granted 153,000 shares of restricted stock to employees of its Manager and Servicer, which was reduced in 2017 by forfeitures of 4,000 shares and in 2018 by forfeitures of 2,666 shares and in 2019 by forfeitures of 1,667 shares. On July 24, 2017, the Company granted 39,000 shares of restricted stock to employees of its Manager and Servicer, which was reduced in 2019 by forfeitures of 333 shares. On July 31, 2018, the Company granted 36,500 shares of restricted stock to employees of its Manager and Servicer, which was reduced in 2019 by forfeitures of 2,500 shares. On August 1, 2019, the Company granted 79,000 shares of restricted stock to employees of its Manager and Servicer. The shares vest over three years, with one third of the shares vesting on each of the first, second and third anniversaries of the grant date. The shares may not be sold until the third anniversary of the grant date. Grants of restricted stock use grant date fair value of the stock as the basis for measuring the cost of the grant.

The following table sets forth the activity in the Company’s restricted stock plans ($ in thousands, except per share amounts):


	Total Grants				Current period activity					Non-vested shares at June 30, 2020			Fully-vested shares at June 30, 2020
Three months ended June 30, 2020	Total shares granted	Total expected cost of grant		Shares granted during the year	Grant expense recognized for the three months ended June 30, 2020		Shares	Per share grant date fair value		Shares	Per share grant date fair value
Employee and Service Provider Grant 2017^(1,4)	38,667	$	539	—	$	44	12,667	$	13.95	26,000	$	13.95
Employee and Service Provider Grant 2018^(2,5)	34,000	462		—	38		22,667	13.58		11,333	13.58
Employee and Service Provider Grant 2019⁽³⁾	79,000	1,101		—	92		79,000	13.94		—	—
Totals	151,667	$	2,102	—	$	174	114,334	$	13.87	37,333	$	13.84

(1)Vesting is ratable over three-year period from grant date. Weighted average remaining life of grant at June 30, 2020 is 0.1 years.

(2)Vesting is ratable over three-year period from grant date. Weighted average remaining life of grant at June 30, 2020 is 1.1 years.

(3)Vesting is ratable over three-year period from grant date. Weighted average remaining life of grant at June 30, 2020 is 2.1 years.

(4)Total is shown net of 2019 forfeitures of 333 shares.

(5)Total is shown net of 2019 forfeitures of 2,500 shares.


	Total Grants				Current period activity					Non-vested shares at June 30, 2019			Fully-vested shares at June 30, 2019
Three months ended June 30, 2019	Total shares granted	Total expected cost of grant		Shares granted during the year	Grant expense recognized for the three months ended June 30, 2019		Shares	Per share grant date fair value		Shares	Per share grant date fair value
Directors’ Grants 2018⁽¹⁾	12,000	$	162	—	$	—	—	$	13.48	12,000	$	13.48
Employee and Service Provider Grant 2016^(2,5)	144,667	1,953		—	143		46,222	13.50		98,445	13.50
Employee and Service Provider Grant 2017⁽³⁾	39,000	544		—	45		26,000	13.95		13,000	13.95
Employee and Service Provider Grant 2018^(4,6)	34,000	462		—	31		34,000	13.58		—	—
Totals	229,667	$	3,121	—	$	219	106,222	$	13.64	123,445	$	13.55

(1)Half of the 12,000 shares granted vested immediately on the grant date while the remaining shares vest ratably over a one-year period. Grant is fully vested at June 30, 2019.

(2)Vesting is ratable over three-year period from grant date. Weighted average remaining life of grant at June 30, 2019 is 0.1 years.

(3)Vesting is ratable over three-year period from grant date. Weighted average remaining life of grant at June 30, 2019 is 1.1 years.

(4)Vesting is ratable over three-year period from grant date. Weighted average remaining life of grant at June 30, 2019 is 2.1 years.

(5)Total is shown net of 2017 forfeitures of 4,000 shares, 2018 forfeitures of 2,666 shares and 2019 forfeitures of 1,667 shares.

(6)Total is shown net of 2019 forfeitures of 2,500 shares.


	Total Grants				Current period activity					Non-vested shares at June 30, 2020			Fully-vested shares at June 30, 2020
Six months ended June 30, 2020	Total shares granted	Total expected cost of grant		Shares granted during the year	Grant expense recognized for the six months ended June 30, 2020		Shares	Per share grant date fair value		Shares	Per share grant date fair value
Employee and Service Provider Grant 2017^(1,4)	38,667	$	539	—	$	88	12,667	$	13.95	26,000	$	13.95
Employee and Service Provider Grant 2018^(2,5)	34,000	462		—	76		22,667	13.58		11,333	13.58
Employee and Service Provider Grant 2019⁽³⁾	79,000	1,101		—	184		79,000	13.94		—	—
Totals	151,667	$	2,102	—	$	348	114,334	$	13.87	37,333	$	13.84