Quarterly report pursuant to Section 13 or 15(d)

Stock-Based Compensation

v3.19.1
Stock-Based Compensation
3 Months Ended
Mar. 31, 2019
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Stock-Based Compensation
Stock-Based Compensation
As of March 31, 2019, the Company had three types of stock-based compensation under the Company's 2018 Long-Term Incentive Plan (i) restricted stock awards ("RSA") issued to directors (ii) restricted stock units (“RSU”) issued to executive officers and other key employees and (iii) performance stock units (“PSU”), which are RSUs with performance requirements, issued to executive officers and other senior management. Stock-based compensation issued prior to the Company’s IPO was subject to a dual component, one of which was the consummation of a specified transaction, which included a public offering. As the public offering occurred on February 9, 2018, there was no stock-based compensation expense recognized in periods prior to the IPO.
The following table summarizes stock-based compensation costs for the three months ended March 31, 2019 and 2018 (in thousands of dollars):
 
 
Three Months Ended March 31,
 
 
2019
 
2018
Restricted stock awards
 
$
166

 
$

Restricted stock units
 
2,131

 
9,886

Performance stock units
 
454

 

Stock-based compensation expense
 
$
2,751

 
$
9,886


i.
Restricted Stock Awards

In March 2018, the Company's Compensation Committee of the Board of Directors approved the issuance of RSAs to the Company's non-executive directors. During the second quarter 2018, we granted 57,145 RSAs, which had a grant date fair value of $8.75 per share. The stock awards fully vested in February 2019.

In January 2019, the Company's Compensation Committee of the Board of Directors approved the issuance of RSAs to the Company's non-executive directors. We granted 140,844 RSAs, which had a grant date fair value of $4.26 per share. The stock awards will fully vest in February 2020.
    
For the three months ended March 31, 2019 and 2018, the Company recognized $0.2 million and zero of non-cash stock compensation expense into earnings, respectively, which is presented within selling, general and administration expense in the condensed consolidated statement of operations.

As of March 31, 2019, the total unamortized compensation costs related to the non-executive RSAs was $0.5 million, which the Company expects to recognize over the remaining vesting period of 0.9 years.

ii.Restricted Stock Units

During the second quarter 2018, executive officers and key employees were granted a total of 476,042 RSUs under the 2018 Long-Term Incentive Plan. These RSUs vest ratably over a three-year service condition with one-third vesting on each anniversary of the Company’s IPO provided that the employee remains employed by the Company at the applicable vesting date.

During the first quarter 2019, executive officers and key employees were granted a total of 897,967 RSUs under the 2018 Long-Term Incentive Plan. These RSUs vest ratably over a three-year service condition with one-third vesting on each anniversary of the RSU's grant date provided that the employee remains employed by the Company at the applicable vesting date.

The Company recognized these RSUs at fair value based on the closing price of the Company's common stock on the date of grant. The compensation expense associated with these RSUs will be amortized into income on a straight-line basis over the vesting period.

Total RSU non-cash stock based compensation expense for the three months ended March 31, 2019 and 2018, was $2.1 million and $9.9 million, respectively, which is presented within selling, general and administrative expense in the condensed consolidated statements of operations.

As of March 31, 2019 and 2018 total unamortized compensation cost related to unvested restricted stock units were $18.3 million and $18.4 million, respectively, which the Company expects to recognize over the remaining weighted-average period of 2.35 years.

A summary of the status and changes during the three months ended March 31, 2019 of the Company’s shares of non-vested RSUs is as follows:
 
 
Number of Shares
(in thousands)
 
Grant Date Fair
Value per Share
 
Weighted Average
Remaining Life
(in years)
Outstanding at December 31, 2018
 
1,551

 
$
15.74

 
2.36
Granted
 
898

 
4.26

 
2.87
Forfeited
 
(13
)
 
15.46

 
 
Vested
 
(509
)
 
14.77

 
 
Outstanding at March 31, 2019
 
1,927

 
$
10.65

 
2.35


iii.Performance Stock Units

During the second quarter 2018, executive officers and senior management were granted a total of 425,083 PSUs under the 2018 Long-Term Incentive Plan. The PSUs were subject to both a performance and service requirement. The PSUs required the achievement of a certain performance as measured on December 31, 2018, based on (i) the Company’s performance with respect to relative total stockholder return and (ii) the Company’s performance with respect to absolute total stockholder return. Any PSUs that were not earned at the end of the performance period were forfeited. As a result of not fully achieving the performance measure, 297,558 PSUs were forfeited. The remaining 127,525 PSUs were earned and should the grantee satisfy the service requirement applicable to such earned performance share unit, vesting shall occur in equal installments on the first three anniversaries of the Company’s IPO.

During the first quarter 2019, executive officers and senior management were awarded a total of 646,966 PSUs under the 2018 Long-Term Incentive Plan. The PSUs are subject to both a performance and service requirement. Under current accounting guidance 323,483 of the awarded 646,966 PSU are accounted for as being granted. These 323,483 PSUs still require the achievement of a certain performance as measured on December 31, 2019, based on the Company’s performance with respect to relative total stockholder return and the other 323,483 PSUs, which were awarded but are not yet considered granted, are based on the performance of management and the Company during the period between January 1, 2019 and December 31, 2019 determined by the Board's compensation committee. Any PSUs that have not been earned at the end of a performance period will be forfeited. Should the grantee satisfy the service requirement applicable to such earned performance share unit, vesting shall occur in equal installments on the first three anniversaries of the award date.

The Company recognized the 323,483 PSUs deemed granted at their fair value determined using the Monte Carlo simulation model. The compensation expense associated with these PSUs will be amortized on a graded straight line basis over the vesting period. The PSUs that were awarded but not yet granted will be deemed granted on the date the Board's compensation committee determines how many PSUs have been earned. These additional earned PSUs will then be amortized on a straight line basis over the remaining vesting period, based on the grant date stock price. For the three months ended March 31, 2019 and 2018, the Company recognized $0.5 million and zero of non-cash stock compensation expense, which is presented within selling, general and administrative expense in the condensed consolidated statements of operations. As of March 31, 2019 and 2018, the total unamortized compensation cost related to unvested PSUs was $2.3 million and zero, respectively. The Company expects to recognize the expense over the remaining weighted-average period of 2.66 years.

A summary of the outstanding PSUs for the three ended of March 31, 2019 is as follows:
 
 
Number of Shares
(in thousands)
 
Grant Date Fair
Value per Share
 
Weighted Average
Remaining Life
(in years)
Outstanding at December 31, 2018
 
128

 
$
5.49

 
2.11

Granted
 
323

 
3.98

 
2.87

Forfeited
 
(1
)
 
5.49

 

Vested
 
(43
)
 
5.49

 

Outstanding at March 31, 2019
 
407

 
$
4.29

 
2.66