GREEN DOT CORPGDOT
GREEN DOT CORP Stock Compensation Disclosure
Stock-Based Compensation
In June 2010, our board of directors adopted, and in July 2010 our stockholders approved, the 2010 Equity Incentive Plan, which replaced our 2001 Stock Plan, and the 2010 Employee Stock Purchase Plan. The 2010 Equity Incentive Plan authorizes the award of stock options, restricted stock awards, stock appreciation rights, restricted stock units, performance shares and stock bonuses. Options granted under the 2010 Equity Incentive Plan generally vest over four years and expire five years or ten years from the date of grant. The 2010 Employee Stock Purchase Plan enables eligible employees to purchase shares of our Class A common stock periodically at a discount. Our 2010 Employee Stock Purchase Plan is intended to qualify as an employee stock purchase plan under Section 423 of the Internal Revenue Code ("IRC"). Approximately 2.7 million shares are available for grant under the 2010 Equity Incentive Plan as of December 31, 2024.
Stock-based compensation for the years ended December 31, 2024, 2023, and 2022 includes expense related to awards of stock options, performance and service based restricted stock units and purchases under the 2010 Employee Stock Purchase Plan. Total stock-based compensation expense and the related income tax benefit were as follows:
| Year Ended December 31, | |||||||||||||||||
| 2024 | 2023 | 2022 | |||||||||||||||
| (In thousands) | |||||||||||||||||
| Total stock-based compensation expense | $ | 29,928 | $ | 33,744 | $ | 34,812 | |||||||||||
| Related income tax benefit | 1,432 | 5,769 | 4,417 | ||||||||||||||
Restricted Stock Units
The following table summarizes restricted stock units with only service conditions granted under our 2010 Equity Incentive Plan:
| Year Ended December 31, | |||||||||||||||||
| 2024 | 2023 | 2022 | |||||||||||||||
| (In thousands, except per share data) | |||||||||||||||||
| Restricted stock units granted | 2,272 | 1,586 | 933 | ||||||||||||||
| Weighted-average grant-date fair value | $ | 9.19 | $ | 16.67 | $ | 27.77 | |||||||||||
Restricted stock unit activity for the year ended December 31, 2024 was as follows:
| Shares | Weighted-Average Grant-Date Fair Value | ||||||||||
| (In thousands, except per share data) | |||||||||||
Outstanding at December 31, 2023 | 2,048 | $ | 21.66 | ||||||||
| Restricted stock units granted | 2,272 | 9.19 | |||||||||
| Restricted stock units vested | (1,040) | 22.62 | |||||||||
| Restricted stock units canceled | (203) | 20.09 | |||||||||
Outstanding at December 31, 2024 | 3,077 | $ | 12.23 | ||||||||
The total fair value of restricted stock vested for the years ended December 31, 2024, 2023 and 2022 was $9.8 million, $11.3 million and $15.8 million, respectively, based on the price of our Class A common stock on the vesting date.
Note 13—Stock-Based Compensation (continued)
Performance-Based Restricted Stock Units
We grant performance-based restricted stock units to certain employees that are subject to the attainment of pre-established internal performance conditions, market conditions, or a combination thereof (collectively referred to herein as "performance-based restricted stock units"). The actual number of shares subject to the award is determined at the end of the performance period and may range from zero to 200% of the target shares granted depending upon the terms of the award. Some awards may contain an additional service component after each performance period is concluded and the unvested balance of the shares after the performance metrics are achieved will vest over the remaining requisite service period. Compensation expense related to these awards is recognized using the accelerated attribution method over the vesting period based on the grant date fair value of the award.
The following table summarizes the performance-based restricted stock units granted under our 2010 Equity Incentive Plan:
| Year Ended December 31, | |||||||||||||||||
| 2024 | 2023 | 2022 | |||||||||||||||
| (In thousands, except per share data) | |||||||||||||||||
| Performance restricted stock units granted | 996 | 724 | 88 | ||||||||||||||
| Weighted-average grant-date fair value | $ | 8.98 | $ | 18.13 | $ | 27.74 | |||||||||||
Performance-based restricted stock unit activity for the year ended December 31, 2024 was as follows:
| Shares | Weighted-Average Grant-Date Fair Value | ||||||||||
| (In thousands, except per share data) | |||||||||||
Outstanding at December 31, 2023 | 988 | $ | 22.88 | ||||||||
| Performance restricted stock units granted (at target) | 996 | 8.98 | |||||||||
| Performance restricted stock units vested | (27) | 46.51 | |||||||||
| Performance restricted stock units canceled | (388) | 26.63 | |||||||||
Outstanding at December 31, 2024 | 1,569 | $ | 12.73 | ||||||||
The total fair value of all performance-based restricted stock vested for the years ended December 31, 2024, 2023 and 2022 was $0.3 million, $2.1 million and $4.2 million, respectively, based on the price of our Class A common stock on the vesting date.
Stock Options
Total stock option activity for the year ended December 31, 2024 was as follows:
| Options | Weighted-Average Exercise Price | Weighted-Average Remaining Contractual Life (in Years) | Aggregate Intrinsic Value | ||||||||||||||||||||
| (In thousands, except per share data and years) | |||||||||||||||||||||||
Outstanding at December 31, 2023 | 1,010 | $ | 23.78 | ||||||||||||||||||||
| Options canceled | (1,010) | 23.78 | |||||||||||||||||||||
Outstanding at December 31, 2024 | — | $ | — | — | $ | — | |||||||||||||||||
We have not issued any stock option awards from our 2010 Equity Incentive Plan during the year ended December 31, 2024 and no longer had any stock option awards outstanding at the end of the period.
As of December 31, 2024, there was $27.4 million of aggregate unrecognized compensation cost related to unvested restricted stock units (including performance-based awards) expected to be recognized in compensation expense in future periods, with a weighted-average period of 1.75 years.
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.