Getty Images Holdings, Inc.GETY
Getty Images Holdings, Inc. Stock Compensation Disclosure
EQUITY-BASED COMPENSATION
Equity-based compensation expense is recorded in “Selling, general and administrative expenses” in the Consolidated Statements of Operations, net of estimated forfeitures. The Company recognized equity-based compensation - net of estimated forfeitures of $24.0 million, $40.6 million, and $9.5 million for the years ended December 31, 2024, 2023 and 2022, respectively. The Company capitalized $2.2 million, $3.0 million and $0.3 million of stock-based compensation expense associated with the cost of developing internal-use software during the year ended December 31, 2024, 2023 and 2022, respectively.
Prior to the Business Combination, certain employees of the Company were granted equity awards under Legacy Getty’s Amended and Restated 2012 Equity Incentive Plan of the Parent (“Legacy Getty 2012 Plan”). Upon closing of the Business Combination, awards under the Legacy Getty 2012 Plan were converted at the Exchange Ratio, and the Company’s Board of Directors approved the Getty Images Holdings, Inc. 2022 Equity Incentive Plan (“2022 Plan”). The 2022 Plan provides for the grant of stock options, including incentive stock options and nonqualified stock
options, stock appreciation rights, restricted stock, dividend equivalents, restricted stock units (“RSU”), performance restricted stock units (“PSU”), and other stock or cash-based awards. Equity-based awards generally vest over or four years. Under the 2022 Plan, up to 51,104,577 shares of Class A common stock are reserved for issuance, of which 6,243,088 are available to be issued as of December 31, 2024.
Stock Options
The following tables presents a summary of the Company’s stock option activity for the year ended December 31, 2024 (in thousands except weighted average data and years):
| Number of awards | Weighted Average Exercise Price | Remaining Average Contractual Life (in Years) | |||||||||||||||
| Outstanding - December 31, 2023 | 27,791 | 3.45 | 5.12 | ||||||||||||||
| Granted | — | — | |||||||||||||||
| Exercised | (2,017) | 2.88 | |||||||||||||||
| Pre-vesting forfeitures | (44) | 5.79 | |||||||||||||||
| Post-vesting cancellations | (131) | 4.99 | |||||||||||||||
| Outstanding - December 31, 2024 | 25,599 | 3.48 | 4.22 | ||||||||||||||
| Exercisable - December 31, 2024 | 23,997 | $ | 3.30 | 3.97 | |||||||||||||
| Vested and expected to vest after December 31, 2024 | 25,597 | $ | 3.48 | 4.22 | |||||||||||||
Intrinsic value of stock options is calculated as the excess of market price of the Company’s common stock over the strike price of the stock options, multiplied by the number of stock options. The intrinsic value of the Company’s stock options is as follows (in thousands):
| December 31, | |||||||||||
| 2024 | 2023 | ||||||||||
| Stock options outstanding | $ | 104 | $ | 56,534 | |||||||
| Stock options exercisable | $ | 104 | $ | 54,944 | |||||||
| Stock options vested and expected to vest | $ | 104 | $ | 56,502 | |||||||
The intrinsic value of stock options exercised for the years ended December 31, 2024, December 31, 2023 and December 31, 2022 was approximately $1.9 million, $14.9 million and $14.8 million, respectively.
No stock options were granted during the year ended December 31, 2024. The weighted-average grant-date fair value of stock options, the valuation model used to estimate the fair value, and the assumptions input into that model, for awards granted were as follows:
| Year Ended December 31, | ||||||||||||||
| 2023 | 2022 | |||||||||||||
| Weighted average grant date fair value per award | $ | 2.20 | $ | 3.17 | ||||||||||
| Valuation model used | Black-Scholes | Black-Scholes | ||||||||||||
| Expected award price volatility | 50 | % | 50 | % | ||||||||||
| Risk-free rate of return | 3.70 | % | 4.15 | % | ||||||||||
| Expected life of awards | 5.89 years | 5.7 years | ||||||||||||
| Expected rate of dividends | None | None | ||||||||||||
The stock volatility assumption for award-based compensation is based on historical volatilities of the common stock of several public companies with characteristics similar to those of the Company since the Company’s common stock has only been trading in the public market for a short period of time.
The risk-free rate of return represents the implied yield available during the month the award was granted for a U.S. Treasury zero-coupon security issued with a term equal to the expected life of the awards.
The expected life is measured from the grant date and is based on the simplified method calculation.
As of December 31, 2024 there was $3.4 million of total unrecognized compensation expense related to outstanding stock options, which the Company expects to recognize over a weighted average period of approximately 1.2 years. During the years ended December 31, 2024, 2023 and 2022, the fair value of stock options that vested was $4.9 million, $3.8 million, and $7.9 million, respectively.
Restricted Stock Units
The following table presents a summary of RSU activity (in thousands except weighted average data):
| Number of awards | Weighted Average Grant-Date Fair Value | ||||||||||
| Outstanding — December 31, 2023 | 5,644 | $ | 5.12 | ||||||||
| Granted | 3,097 | $ | 3.49 | ||||||||
| Vested | (2,909) | $ | 5.06 | ||||||||
| Cancelled | (405) | $ | 5.15 | ||||||||
| Outstanding - December 31, 2024 | 5,427 | $ | 4.21 | ||||||||
As of December 31, 2024, the total unrecognized compensation expense related to RSUs is approximately $21.5 million, which is expected to be recognized over a weighted average period of approximately 1.82 years.
Performance Stock Units
The following table presents a summary of PSU activity (in thousands except weighted average data):
| Number of awards | Weighted Average Grant-Date Fair Value | ||||||||||
Outstanding — December 31, 20231 | 921 | $ | 4.77 | ||||||||
| Granted | 1,361 | $ | 4.35 | ||||||||
| Vested | — | $ | — | ||||||||
| Cancelled | (963) | $ | 4.78 | ||||||||
| Outstanding - December 31, 2024 | 1,319 | $ | 4.34 | ||||||||
1 Prior year amount has been reclassified to conform to the current year presentation.
The number of units subject to future vesting is based on annual Company achieved factors, such as Revenue growth and Adjusted EBITDA less Capital Expenditures growth. Unvested units are expected to vest at the determination date of March 20, 2025, and expense recognized is adjusted quarterly for expected achievement. In addition to the granted shares in the table above, the Company issued an incremental 1.24 million PSUs that will have an accounting grant date in future periods upon achieved factors being set. PSU achievement is at the discretion of the Compensation Committee of the Board of Directors.
Earn Out Plan
The Getty Images Holdings, Inc. Earn Out Plan (“Earn Out Plan”) provides for the grant of RSUs, which generally vest upon grant. Under the Earn Out Plan, up to 6.0 million shares of Class A common stock are reserved for issuance, of which 20,856 shares are available to be issued as of December 31, 2024.
| Number | |||||||||||
| of | Weighted Average | ||||||||||
| awards | Grant-Date Fair Value | ||||||||||
| Outstanding — December 31, 2023 | — | $ | — | ||||||||
| Granted | 1,411 | $ | 4.37 | ||||||||
| Vested | (1,411) | $ | (4.37) | ||||||||
| Cancelled | $ | — | |||||||||
| Outstanding — December 31, 2024 | — | $ | — | ||||||||
As of December 31, 2024, there is no unrecognized compensation expense related to RSUs granted from the Earn Out Plan, as all RSUs were fully vested upon grant.
Employee Stock Purchase Plan
The Getty Images Holdings, Inc. 2022 Employee Stock Purchase Plan (“ESPP”) provides for shares of Class A common stock to be purchased by eligible employees at six months intervals at 85% of the fair market value of the stock on either the first or last trading day of each six months period, whichever is lower. Eligible employees are allowed to contribute up to 10% of their compensation. The Company’s first six months period under the ESPP began on June 1, 2023. Under the ESPP, up to 5.0 million shares of Class A common stock are reserved for issuance, of which all 3.5 million shares are available to be issued as of December 31, 2024.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.