Legacy Housing Corp Stock Compensation Disclosure
16. SHARE BASED COMPENSATION
Pursuant to the Legacy Housing Corporation 2018 Incentive Compensation Plan (the “Plan”), the Company may issue up to 10.0 million equity awards to employees, directors, consultants and nonemployee service providers in the form of stock options, stock and stock appreciation rights. Stock options may be granted with a contractual life of up to ten years. At December 31, 2023, the Company had 8.7 million shares available for grant under the Plan.
Restricted Stock
The following is a summary of restricted stock award activity for the year ending December 31, 2023 (in thousands, except per unit data):
Number of Units | Weighted Average Grant Date Fair Value Per Unit | ||||
Nonvested, January 1, 2022 | 35 | $ | 14.01 | ||
Granted | 517 | $ | 11.82 | ||
Vested | (160) | $ | 24.32 | ||
Canceled | (350) | $ | 5.99 | ||
Nonvested, December 31, 2022 | 42 | $ | 6.93 | ||
Nonvested, January 1, 2023 | 42 | $ | 6.93 | ||
Granted | 1 | $ | 23.26 | ||
Vested | (18) | $ | 14.98 | ||
Canceled | (17) | $ | 13.63 | ||
Nonvested, December 31, 2023 | 8 | $ | 17.09 |
As of December 31, 2023, approximately 8,000 shares of restricted stock remained unvested. Unrecognized compensation expense related to these restricted stock awards at December 31, 2023 was $78 and is expected to be recognized over 0.6 years. Compensation expense for restricted stock awards for the years ended December 31, 2023 and 2022 was $234 and $3,960, respectively.
Stock Options
The following is a summary of option award activity (in thousands, except per unit data):
| Number of Units |
| Weighted |
| Weighted |
| Weighted |
| Aggregate | ||||
Outstanding, January 1, 2022 | 83 | $ | 16.83 | $ | 12.27 | 9.36 | |||||||
Granted | 1,025 | $ | 40.59 | $ | 4.99 | 9.44 | |||||||
Exercised | — | $ | - | $ | - | — | |||||||
Forfeited | (83) | $ | 16.83 | $ | 12.27 | — | |||||||
Outstanding, December 31, 2022 | 1,025 | $ | 40.59 | $ | 4.99 | 9.44 | $ | ||||||
Exercisable, December 31, 2022 | — | $ | — | $ | — | — | $ | — | |||||
Outstanding, January 1, 2023 | 1,025 | $ | 40.59 | $ | 4.99 | 9.44 | |||||||
Granted | 43 | $ | 22.94 | $ | 15.32 | 4.70 | |||||||
Exercised | (6) | $ | 16.01 | $ | 8.57 | — | |||||||
Forfeited | (56) | $ | 16.01 | $ | 8.57 | — | |||||||
Outstanding, December 31, 2023 | 1,006 | $ | 41.35 | $ | 5.22 | 8.28 | $ | ||||||
Exercisable, December 31, 2023 | 96 | $ | 42.18 | $ | 4.76 | 8.44 | $ | — | |||||
As of December 31, 2023, approximately 1,006,000 options remain unvested. Unrecognized compensation expense related to these options at December 31, 2023 was $4,479 and is expected to be recognized over 8.3 years. Compensation expense for stock option awards for the years ended December 31, 2023 and 2022 was $535 and $348, respectively.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2023 | Mar 15, 2024 | Showing above |
| 2022 | Mar 15, 2023 | |
| 2020 | Mar 17, 2021 | |
| 2019 | Mar 30, 2020 | |
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.