Genie Energy Ltd. Stock Compensation Disclosure

Note 14 — Stock-Based Compensation

 

Stock-Based Compensation Plan

 

The Company’s 2011 Stock Option and Incentive Plan (as amended, the "2011 Plan") is intended to provide incentives to executives, employees, directors and consultants of the Company. Incentives available under the Plan include stock options, stock appreciation rights, limited rights, deferred stock units, and restricted stock. The 2011 Plan expired in 2021 and no new grants are to be issued thereunder, however, outstanding grants are not impacted by the expiration of the plan.

On March 8, 2021, the Board of Directors adopted the Company's 2021 Stock Option and Incentive Plan (the "2021 Plan"), subject to the approval of the Company's stockholders. In May 2021, the 2021 Plan became effective and replaced the 2011 Plan. The 2021 Plan provides incentives to executives, employees, directors and consultants of the Company. Incentives available under the 2021 Plan provide for grants of stock options, stock appreciation rights, limited stock appreciation rights, deferred stock units, and restricted stock. The Plan is administered by the Compensation Committee of the Company’s Board of Directors. The maximum number of shares initially reserved for the grant of awards under the 2021 Plan is 1.0 million shares of Class B Common Stock. On May 10, 2023, the Company's stockholders approved an amendment to the 2021 Plan that, among other things, increased the number of shares of the Company’s Class B common stock available for the grant of awards thereunder by 0.5 million shares of Class B Common Stock. At December 31, 2024, the Company had 16,438 shares of Class B common stock available for future grants. 

Restricted Stock 

 

The fair value of restricted shares of the Company’s Class B common stock is determined based on the closing price of the Company’s Class B common stock on the grant date. Share awards generally vest on a graded basis over three years of service following the grant.

 

A summary of the status of the Company’s grants of restricted shares of Class B common stock is presented below: 

  

		Number of  Non-vested Shares				Weighted- Average Grant Date Fair  Value
		(in thousands)
Non-vested restricted shares at December 31, 2023			261			$	8.45
Granted			419				14.85
Vested			(144	)			8.81
Forfeited			—				—
NON-VESTED RESTRICTED SHARES AT DECEMBER 31, 2024			536			$	15.23

 

At December 31, 2024, there was $5.8 million of total unrecognized compensation cost related to non-vested restricted stock. The total unrecognized compensation cost is expected to be recognized over a weighted-average period of 2.5 years. The total grant date fair value of shares vested was $1.3 million, $1.5 million and $1.3 million in the years ended December 31, 2024, 2023 and 2022, respectively. The Company recognized compensation cost related to the vesting of the restricted stock of $1.8 million, $1.5 million and $1.3 million in the years ended December 31, 2024, 2023 and 2022, respectively.

 

Stock Options

 

Option awards are generally granted with an exercise price equal to the fair market value of the Company’s stock on the date of grant (which is determined by reference to the closing price for the Class B common stock on the New York Stock Exchange trading date immediately preceding the grant. Option awards generally vest on a graded basis over three years of service and have five-year contractual terms. Expected volatility is based on historical volatility of the Company’s Class B common stock and other factors. The Company uses historical data on exercise of stock options, post vesting forfeitures and other factors to estimate the expected term of the stock-based payments granted. The risk free rate is based on the U.S. Treasury yield curve in effect at the time of grant.

A summary of stock option activity for the Company is as follows:

 

		Number of Options (in thousands)				Weighted- Average Exercise  Price				Weighted- Average Remaining Contractual Term  (in years)				Aggregate Intrinsic Value  (in thousands)
Outstanding at December 31, 2023			126			$	8.05				0.1			$	2,534
Granted			—				—
Exercised			(126	)			8.05
Cancelled/Forfeited			—				—
OUTSTANDING AT DECEMBER 31, 2024			—				—				—			$	—
EXERCISABLE AT DECEMBER 31, 2024			—			$	—				—			$	—

 

The total intrinsic value of options exercised during the year ended December 31, 2024 was $1.4 million. At December 31, 2024, there was no unrecognized compensation cost related to non-vested stock options. There was no compensation cost related to vesting of the options in the years ended December 31, 2024, 2023 and 2022. 

  

Market Condition Awards

  

In February 2020 and February 2021, the Company granted certain employees and members of its Board of Directors an aggregate of 305,000 deferred stock units, which are subject to vesting in two tranches upon the achievement of a specified thirty-day average closing price of the Company's Class B common stock within specified periods of time ( the "market conditions") and the satisfaction of service-based vesting conditions. Each deferred stock unit entitles the grantee to receive, upon vesting, up to two shares of Class B common stock of the Company upon achievement of market conditions which will be subject to restrictions that will lapse annually over three years from grant. The grant-date fair value of the deferred stock units is amortized over approximately 3.5 years after the date of grant irrespective of whether the market conditions were met. The market conditions were not achieved and the deferred stock units expired in February 2021 and February 2022.

  

In February 2022, the Company granted certain employees and members of its Board of Directors an aggregate of 290,000 deferred stock units which were eligible to vest in two tranches contingent upon the achievement of a specified thirty-day average closing price of the Company's Class B common stock within a specified period of time (the "2022 market conditions") and the satisfaction of service-based vesting conditions. Each deferred stock unit entitled the recipient to receive, upon vesting, up to two restricted shares of Class B common stock of the Company depending on market conditions which restricted shares will be subject to restrictions that will lapse annually over three years from grant. The grant-date fair value of the deferred stock units is being amortized over approximately 3.5 years after the date of grant irrespective of whether the 2022 market conditions were met. In the second quarter of 2022, the 2022 market conditions were partially achieved and the Company issued 290,000 shares of its restricted Class B common stock. In February 2023, the remaining portion of the 2022 market condition was achieved and the Company issued an additional 290,000 restricted shares of its Class B common stock. The restricted shares to be issued will be subject to service-based vesting conditions as described above. 

  

The Company used a Monte Carlo simulation model to estimate the grant-date fair value of the awards. Assumptions and estimates utilized in the model include the risk-free interest rate, dividend yield, expected stock volatility based on a combination of the Company’s historical stock volatility. The Company recognized compensation costs related to the deferred stock units award of $0.6 million, $1.3 million and $1.6 million for the years ended December 31, 2024, 2023 and 2022, respectively. 

  

As of December 31, 2024, there were approximately $0.1 million of total unrecognized stock-based compensation costs related to outstanding and unvested equity-based grants. These costs are expected to be recognized over a weighted-average period of approximately 0.6 years.