Allbirds, Inc.BIRD
Allbirds, Inc. Stock Compensation Disclosure
Stock-Based Compensation
2015 Equity Incentive Plan
In 2015, we adopted the 2015 Equity Incentive Plan (the “2015 Plan”) that authorized the granting of options for shares of common stock. Our 2015 Plan provided for the grant of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit (“RSU”) awards, and other stock awards. The 2015 Plan was terminated in connection with the adoption of the 2021 Equity Incentive Plan (the “2021 Plan”) in November 2021 in connection with the IPO, and we will not grant any additional awards under the 2015 Plan. However, the 2015 Plan will continue to govern the terms and conditions of the outstanding awards previously granted thereunder.
2021 Equity Incentive Plan
In September 2021, our board of directors adopted, and our stockholders approved, the 2021 Plan, which became effective in connection with the IPO in November 2021. The 2021 Plan provides for the grant of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock awards, RSU awards, performance awards, and other forms of equity compensation. The number of shares of our Class A common stock reserved for issuance under the 2021 Plan will automatically increase on January 1 of each year for a period of 10 years, beginning on January 1, 2022 and continuing through (and including) January 1, 2031, in an amount equal to 4% of the total number of share of our common stock (both Class A and Class B) outstanding on December 31 of the immediately preceding year, except that, before the date of any such increase, our board of directors may determine that the increase for such year will be the lesser number of shares. Additionally, to the extent that any stock options outstanding under the 2015 Plan expire, terminate prior to exercise, are not issued because the award is settled in cash, are forfeited because of the failure to vest, or are reacquired or withheld (or not issued) to satisfy a tax withholding obligation or the purchase or exercise price, if any, the shares of Class B common stock reserved for issuance pursuant to such equity awards will become available for issuance as shares of Class A common stock under the 2021 Plan. The maximum number of shares of our Class A common stock that may be issued on the exercise of incentive stock options under the 2021 Plan will be 100,000,000 shares.
2021 Employee Stock Purchase Plan
In September 2021, our board of directors adopted, and our stockholders approved, the 2021 Employee Stock Purchase Plan (the “2021 ESPP”), which became effective in connection with the IPO in November 2021. The 2021 ESPP authorizes the issuance of shares of Class A common stock pursuant to purchase rights granted to employees. A total of 316,554 shares of the Company’s Class A common stock have been reserved for future issuance under the 2021 ESPP as of December 31, 2024. The number of shares of our Class A common stock reserved for issuance will automatically increase on January 1 of each year for a period of 10 years, beginning on January 1, 2022 and continuing through (and including) January 1, 2031, by the lesser of (1) 1% of the total number of shares of our common stock (both Class A and Class B) outstanding on December 31 of the immediately preceding year and (2) 142,500 shares, except that, before the date of any such increase, our board of directors may determine that such increase will be less than the amount set forth in clauses (1) and (2). The price at which Class A common stock is purchased under the 2021 ESPP is equal to 85% of the fair market value of a share of the Company’s Class A common stock on the first day of the offering period or the date of purchase, whichever is lower. Offering periods are six months long and begin on November 3 and May 3 of each year. The initial offering period began on November 3, 2021.
Stock Options
A summary of the status of the 2015 Plan and the 2021 Plan as of December 31, 2024 and 2023, and changes during the periods then ended is presented below:
| Options Outstanding | |||||||||||||||||||||||
| Number of Options | Weighted-Average Exercise Price | Weighted-Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value (in thousands) | ||||||||||||||||||||
Outstanding at December 31, 2023 | 662,499 | $ | 72.00 | 6.50 | $ | 927 | |||||||||||||||||
| Granted | — | ||||||||||||||||||||||
| Exercised | (1,250) | 25.40 | 2 | ||||||||||||||||||||
| Forfeited | (9,844) | 79.83 | |||||||||||||||||||||
| Cancelled | (94,043) | 79.30 | |||||||||||||||||||||
Outstanding at December 31, 2024 | 557,362 | $ | 70.84 | 5.78 | $ | 221 | |||||||||||||||||
Vested and exercisable at December 31, 2024 | 432,857 | 77.23 | 5.13 | 221 | |||||||||||||||||||
For the years ended December 31, 2024 and 2023, the aggregate intrinsic value of stock options exercised under both equity incentive plans was $2 thousand and $1.8 million, respectively. Aggregate intrinsic value represents the difference between the exercise price of the options and the fair value of our common stock as of the reporting date.
There were no stock options granted for the year ended December 31, 2024. The weighted-average fair value of options granted during the year ended December 31, 2023 was $0.63 per share. We calculated the fair value of each option using an expected volatility over the expected life of the option, which was estimated using the average volatility of comparable publicly traded companies. The expected life of options granted is based on the simplified method to estimate the expected life of the stock options, giving consideration to the contractual terms and vesting schedules. The following weighted average assumptions were used for issuances during the year ended December 31, 2023 for employees and non-employees:
| December 31, 2023 | |||||
| Risk-free interest rate | 3.77 | % | |||
| Dividend yield | — | ||||
| Volatility | 42.43 | % | |||
| Expected lives (in years) | 6.0 | ||||
2021 ESPP
The following table summarizes the weighted-average assumptions used in estimating the fair value of the 2021 ESPP grants for the following offering periods, using the Black Scholes option-pricing model:
Offering Period - November 3, 2024 to May 2, 2025 | Offering Period - May 3, 2024 to November 2, 2024 | Offering Period - November 3, 2023 to May 2, 2024 | Offering Period - May 3, 2023 to November 2, 2023 | Offering Period - November 3, 2022 to May 2, 2023 | |||||||||||||||||||||||||
| Risk-free interest rate | 4.30 | % | 5.41 | % | 5.45 | % | 5.08 | % | 4.44 | % | |||||||||||||||||||
| Dividend yield | — | — | — | — | — | ||||||||||||||||||||||||
| Volatility | 37.13 | % | 37.13 | % | 43.12 | % | 45.59 | % | 43.42 | % | |||||||||||||||||||
| Expected lives (in years) | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 | ||||||||||||||||||||||||
RSUs
After completion of the IPO in November 2021, the Company began granting RSUs to certain employees. The RSUs granted had service-based vesting conditions. The service-based vesting condition for these awards is typically satisfied
over four years, with a cliff vesting period of one year and continued vesting quarterly thereafter. The service-based vesting condition for refresh grants of RSUs to existing employees is typically satisfied over three years with vesting occurring quarterly, subject to the employees’ continued service to us. RSUs and the related stock-based compensation are recognized on a straight-line basis over the requisite service period.
RSU activity during the year ended December 31, 2024 was as follows:
| Number of Shares | Weighted-Average Grant Date Fair Value per Share | ||||||||||
Unvested at December 31, 2023 | 513,205 | $ | 38.60 | ||||||||
| Granted | 266,008 | 13.92 | |||||||||
| Vested | (217,997) | 39.53 | |||||||||
| Forfeited | (97,051) | 40.70 | |||||||||
Unvested at December 31, 2024 | 464,165 | $ | 23.61 | ||||||||
Performance Stock Units
In May 2022, we granted a target amount of 40 thousand RSUs with market-based and service-based vesting conditions (“PSUs”) to certain executives. The market vesting criteria is based on achievement of certain total shareholder return (“TSR”) results relative to the S&P Total Market Consumer Discretionary Index (the “Index”) during a one-year, two-year, and three-year performance period, respectively, beginning on June 1, 2022, and ending on May 31, 2025. The fair value of PSUs is measured on the grant date using a Monte Carlo simulation model.
The total grant date fair value of the awards was determined to be $4.0 million. Stock-based compensation expense related to the PSUs is recognized on a straight-line basis over their requisite service periods, regardless of whether the market condition is ultimately satisfied. Stock-based compensation expense is not reversed if the achievement of the market condition does not occur. We recognized stock-based compensation expense of $0.8 million and $1.7 million as of December 31, 2024 and 2023, respectively, as selling, general and administrative expense in the condensed consolidated statements of operations and comprehensive loss related to these awards.
In March 2024, in connection with the appointment of our new CEO, we granted him approximately 30 thousand PSUs. The awards vest based on the achievement of certain stock price targets as well as his continued employment with us. The total grant date fair value of the awards was determined to be $0.1 million.
PSU activity for the year ended December 31, 2024 was as follows:
| Target Number of Shares | Weighted-Average Grant Date Fair Value per Share | ||||||||||
Unvested at December 31, 2023 | 26,255 | $ | 105.80 | ||||||||
| Granted | 32,743 | 2.61 | |||||||||
| Vested | — | — | |||||||||
| Forfeited | (13,128) | 102.20 | |||||||||
Unvested at December 31, 2024 | 45,870 | $ | 33.17 | ||||||||
Stock-based Compensation Expense
Stock-based compensation expense, included in selling, general, and administrative expense in the consolidated statements of operations and comprehensive loss, for the years ended December 31, 2024 and 2023 was comprised of the following:
| (in thousands) | December 31, 2024 | December 31, 2023 | |||||||||
Stock-based compensation, net of amounts capitalized | $ | 11,472 | $ | 19,346 | |||||||
| Capitalized stock-based compensation | 267 | 866 | |||||||||
Total stock-based compensation | $ | 11,739 | $ | 20,212 | |||||||
As of December 31, 2024, there was approximately $3.1 million of unrecognized compensation cost related to outstanding unvested stock options, $9.9 million of unrecognized compensation cost related to outstanding unvested RSUs, and $0.2 million of unrecognized compensation cost related to outstanding unvested PSUs under both equity incentive plans. The remaining unrecognized compensation costs are expected to be recognized over the weighted-average remaining vesting periods of 2.06 years, 2.39 years, and 1.69 years, respectively.
About Stock Compensation Disclosures
Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.
Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.