Compensation Plans |
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| Compensation Plans | COMPENSATION PLANS 2019 Equity Incentive Plan
On April 17, 2019, we adopted the 2019 Equity Incentive Plan (the “2019 Plan”). The 2019 Plan provides eligible participants with compensation opportunities in the form of cash and equity incentive awards. The 2019 Plan is designed to enhance our ability to attract, retain and motivate our employees, directors, and executive officers, and incentivizes them to increase our long-term growth and equity value in alignment with the interests of our stockholders. Under the 2019 Plan, we may grant up to 5,000,000 stock options and other equity-based awards to employees, directors and executive officers.
During the year ended December 31, 2020, we granted an aggregate of 949,126 options to our directors and certain employees. The stock options were granted with exercise prices ranging from $2.00 per share to $6.14 per share, and vesting periods ranging from six months to four years. During the year ended December 31, 2019, we granted an aggregate of 654,284 options to our directors and certain employees. The stock options were granted with exercise prices ranging from $6.42 per share to $17.00 per share, and vesting periods ranging from to ten years.
We recorded stock compensation expense of approximately $1.6 million and $1.1 million related to stock options during the year ended December 31, 2020 and 2019, respectively, which was included within "salaries, benefits and payroll taxes" in our consolidated statements of operations and comprehensive loss. As of December 31, 2020, total unrecognized compensation expenses related to unvested stock options was approximately $3.0 million, which we expect to recognize over a weighted-average period of 3.1 years.
The fair value of the stock option awards granted during the years ended December 31, 2020 and 2019 was determined on the grant date using the Black-Scholes valuation model based on the following ranges of weighted-average assumptions:
(1)Expected volatility is based on the historical volatility of a selected peer group over a period equivalent to the expected term.
(2)We assumed a dividend yield of zero as management has no plans to declare dividends in the foreseeable future.
(3)Expected term represents the estimated period of time until an award is exercised and was determined using the simplified method.
(4)The risk-free rate is an interpolation of yields on U.S. Treasury securities with maturities equivalent to the expected term.
A summary of stock option activity for the years ended December 31, 2020 and 2019 is as follows:
The weighted-average grant date fair value of options granted for the years ended December 31, 2020 and 2019 was $2.95 and $6.70, respectively. The total fair value of stock options vested during the years ended December 31, 2020 and 2019 was approximately $1.4 million and $0.1 million , respectively.
During the year ended December 31, 2020, we issued 15,000 restricted shares of our Class A common stock to certain executive officers under the 2019 Plan. Compensation expense related to these restricted shares was de minimis for the year ended December 31, 2020.
Common Units of the Operating Company Granted as Equity-Based Compensation
In connection with the closing of the IPO, we consummated certain organizational transactions with the Operating Company, as described in further detail in "Note 1—Business Operations and Organization," among which, the Operating Company reclassified unvested Class B membership interests and profits interests which had been granted as equity-based compensation into Common Units of the Operating Company.
During the year ended December 31, 2020, we recorded a net reversal compensation expense related to Common Units of approximately $0.8 million, which was comprised of compensation expense of approximately $1.9 million offset by a reversal of compensation expense for actual forfeitures that occurred during the period of approximately $2.7 million, which is included within "salaries, benefits and payroll taxes" in our consolidated statement of operations and comprehensive loss. During the year ended December 31, 2019, we recorded compensation expense of approximately $6.9 million related to Common Units. As of December 31, 2020, total unrecognized compensation expense related to unvested Common Units was approximately $0.8 million, which we expect to recognize over a weighted-average period of 1.9 years.
The following table provides a summary of the unvested Common Units outstanding and related transactions:
401(k) Plan
We have a 401(k) retirement savings plan. Eligible employees must be at least 18 years of age and have completed six months of service. Participants are eligible to receive a matching contribution from us up to the first 3% of compensation plus 50% of participant contributions between 3% and 5% of compensation. Matching contributions, other than safe-harbor contributions, vest 33% per year and are 100% vested after three years of service. Safe-harbor matching contributions are 100% vested as of the date of the contribution. Our matching contributions to the plan were approximately $0.5 million and $0.3 million for the years ended December 31, 2020 and 2019, respectively.
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