COLONY BANKCORP INCCBAN

COLONY BANKCORP INC Stock Compensation Disclosure

10-KFiled Mar 30, 20201 min read
NOTE
21
. STOCK-BASED COMPENSATION
 
In
August 2018,
the Company granted an award of
5,650
restricted shares of the Company’s common stock to T. Heath Fountain, the Company’s Chief Executive Officer (“CEO”), with a market price of
$17.73
per share. The restricted shares vest in equal installments on each of
July 30, 2019, 
2020
and
2021,
subject to continued service by Mr. Fountain through each applicable vesting date, or earlier upon the occurrence of a change in control. With the restricted stock, there will be
no
cash consideration to the Company for the shares. The CEO will have the right to vote all shares subject to such grant and receive all dividends with respect to such shares, whether or
not
the shares have vested.
 
Compensation expense for restricted stock is based on the market price of the Company stock at the time of the grant and amortized on a straight-line basis over the vesting period. The balance of unearned compensation related to these restricted shares as of
December 31, 2019
is
$52,000
which is expected to be recognized over a weighted-average of
1.58
years. The balance of unearned compensation related to these restricted shares as of
December 31, 2018
is
$86,000
which is expected to be recognized over a weighted-average of
2.58
years. Total compensation expense recognized for the restricted shares granted for the year ended
December 31, 2018
and
2019
was
$34,000
and
$14,000,
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.

Other Available Disclosures

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