LIVEPERSON INCLPSN
LIVEPERSON INC Stock Compensation Disclosure
Stockholders’ Equity
Common Stock
As of December 31, 2024, there were 200,000,000 shares of common stock authorized, 93,956,738 shares issued, and 91,190,665 shares outstanding. As of December 31, 2023, there were 200,000,000 shares of common stock authorized, 90,603,519 shares issued, and 87,837,446 shares outstanding. The par value for the common stock is $0.001 per share.
Preferred Stock
As of December 31, 2024 and 2023, there were 5,000,000 shares of preferred stock authorized, and no shares were issued or outstanding. The par value for the preferred stock is $0.001 per share.
Stock-Based Compensation
The Company’s stock-based compensation generally includes stock options, RSUs, PRSUs, and purchases under the Company’s 2019 ESPP. Stock-based compensation expense related to RSUs is based on the market value of the underlying stock on the date of grant and the related expense is recognized ratably over the requisite service period. The stock-based compensation expense related to PRSUs is estimated at the grant date based on the expectation that performance goals will be achieved at the stated target level. The amount of compensation cost recognized depends on the relative satisfaction of the performance condition based on performance to date.
Stock Incentive Plans
The Company’s 2019 Stock Incentive Plan became effective on April 11, 2019. The 2019 Stock Incentive Plan, as amended and restated, allows the Company’s employees and directors to participate in the Company’s future performance through grants of stock-based awards of stock options and RSUs at the discretion of the board of directors. The number of shares authorized for issuance under the 2019 Stock Incentive Plan as of December 31, 2024 was 46,967,744 shares in the aggregate, inclusive of 4,600,000 shares approved for issuance thereunder by the stockholders of the Company at the Company’s annual meeting on November 25, 2024. Options to acquire common stock granted under the 2019 Stock Incentive Plan have ten-year terms. As of December 31, 2024, approximately 3.5 million shares of common stock remained available for issuance (taking into account all stock option exercises and other equity award settlements through December 31, 2024).
Employee Stock Purchase Plan
The number of shares authorized for issuance under the ESPP as of December 31, 2024 was 4,500,000 shares, inclusive of 2,500,000 shares approved for issuance thereunder by the stockholders of the Company at the Company’s annual meeting on November 25, 2024. As of December 31, 2024, approximately 3.2 million shares of common stock remained available for issuance under the ESPP (taking into account all share purchases through December 31, 2024).
Inducement Plan
There are 15,412,342 shares of common stock authorized and reserved for issuance under the Inducement Plan, inclusive of 2,333,333 shares authorized for issuance during the fourth quarter of 2024. As of December 31, 2024, approximately 1.2 million shares of common stock remained available for issuance under the Inducement Plan (taking into account all option exercises and other equity award settlements through December 31, 2024).
CEO Inducement Award
As part of an equity compensation package negotiated to induce John Sabino, the Company’s Chief Executive Officer, to accept employment with the Company, pursuant to the terms of the employment agreement entered into between Mr. Sabino and the Company, the Company granted Mr. Sabino an option to purchase 1,000,000 shares of common stock (the “CEO Inducement Award”) that will vest upon the satisfaction of certain performance-based and time-based vesting conditions. On May 17, 2024, the Company’s board of directors authorized 1,000,000 shares for issuance under the CEO Inducement Award in compliance with and in reliance on Nasdaq Listing Rule 5635(c)(4). The CEO Inducement Award was a standalone award granted outside of the 2019 Stock Incentive Plan and 2018 Inducement Plan. As of December 31, 2024, no shares of common stock remained available for issuance under the CEO Inducement Award.
Stock Option Activity
The following table is a summary of the Company’s stock option activity and weighted average exercise prices for the years ended December 31, 2022, 2023 and 2024:
| Stock Option Activity | Weighted Average Remaining Contractual Term (In years) | Aggregate Intrinsic Value (In thousands) | |||||||||||||||||||||
| Options (In thousands) | Weighted Average Exercise Price | ||||||||||||||||||||||
| Balance outstanding as of December 31, 2021 | 4,782 | $ | 27.52 | ||||||||||||||||||||
| Granted | 993 | 20.34 | |||||||||||||||||||||
| Exercised | (264) | 5.07 | |||||||||||||||||||||
| Cancelled or expired | (1,052) | 41.56 | |||||||||||||||||||||
| Balance outstanding as of December 31, 2022 | 4,459 | $ | 24.25 | 6.08 | $ | 1,327 | |||||||||||||||||
| Options vested and expected to vest | 1,047 | $ | 29.80 | 8.06 | $ | 242 | |||||||||||||||||
Options exercisable as of December 31, 2022 | 2,758 | $ | 21.26 | 4.94 | $ | 986 | |||||||||||||||||
Balance outstanding as of December 31, 2022 | 4,459 | $ | 24.25 | ||||||||||||||||||||
| Granted | 18 | 11.37 | |||||||||||||||||||||
| Exercised | (67) | 2.62 | |||||||||||||||||||||
| Cancelled or expired | (1,273) | 22.69 | |||||||||||||||||||||
Balance outstanding as of December 31, 2023 | 3,137 | $ | 22.68 | 4.84 | $ | 40 | |||||||||||||||||
| Options vested and expected to vest | 379 | $ | 28.83 | 7.89 | $ | — | |||||||||||||||||
Options exercisable as of December 31, 2023 | 2,643 | $ | 21.67 | 4.20 | $ | 40 | |||||||||||||||||
Balance outstanding as of December 31, 2023 | 3,137 | $ | 22.68 | ||||||||||||||||||||
| Granted | 1,000 | 1.02 | |||||||||||||||||||||
| Cancelled or expired | (1,474) | 21.96 | |||||||||||||||||||||
Balance outstanding as of December 31, 2024 | 2,663 | $ | 22.93 | 3.95 | $ | 7 | |||||||||||||||||
| Options vested and expected to vest | 674 | $ | 4.91 | 8.93 | $ | 290 | |||||||||||||||||
Options exercisable as of December 31, 2024 | 1,595 | $ | 22.93 | 3.65 | $ | 7 | |||||||||||||||||
The total fair value of stock options exercised during the years ended December 31, 2024 was immaterial. The total fair value of stock options exercised during the years ended December 31, 2023 and 2022 was $3.4 million and $11.3 million, respectively. As of December 31, 2024, there was $1.2 million of total unrecognized compensation cost related to non-vested share-based compensation arrangements. That cost is expected to be recognized over a weighted average period of 5.85 years.
The per share weighted average fair value of stock options granted during the years ended December 31, 2024, 2023 and 2022 was $0.17, $6.54, and $10.20, respectively. The fair value of each option grant is estimated on the date of grant, adjusted for estimated forfeitures, using the Black-Scholes option pricing model with the following weighted average assumptions:
| Year Ended December 31, | |||||||||||||||||
| 2024 | 2023 | 2022 | |||||||||||||||
| Dividend yield | —% | —% | —% | ||||||||||||||
| Risk-free interest rate | 4.31% | 3.60% | 1.62% – 4.20% | ||||||||||||||
| Expected life (in years) | 10 | 5 | 5 | ||||||||||||||
| Historical volatility | 67.10% | 65.17% | 53.87% – 64.13% | ||||||||||||||
A description of the methods used in the significant assumptions used to estimate the fair value of stock-based-based compensation awards follows:
•Dividend yield – The Company uses 0% as it has never issued dividends and does not anticipate issuing dividends in the near term.
•Risk-free interest rate – The Company uses the market yield on U.S. Treasury securities at 5 years with constant maturity, representing the current expected life of stock options in years, with the exception of the 2024 grants, which had a 10-year life.
•Expected life – The Company uses historical data to estimate the expected life of a stock option.
•Historical volatility – The Company uses a trailing five year from grant date to determine volatility.
Restricted Stock Unit and Performance-Vesting Restricted Stock Unit Activity
The following table is a summary of the Company’s RSUs and PRSUs activity and weighted average grant date fair value, for the years ended December, 31, 2022, 2023 and 2024:
| Number of Shares | Weighted Average Grant Date Fair Value | Aggregate Fair Value | |||||||||||||||
| (In thousands) | (Per share) | (In thousands) | |||||||||||||||
| Balance outstanding as of December 31, 2021 | 3,732 | $ | 43.63 | $ | 133,308 | ||||||||||||
| Awarded | 4,927 | 18.61 | |||||||||||||||
| Released | (1,938) | 31.73 | |||||||||||||||
| Forfeited | (1,486) | 40.30 | |||||||||||||||
| Non-vested and outstanding as of December 31, 2022 | 5,235 | $ | 25.42 | $ | 53,080 | ||||||||||||
| Balance outstanding as of December 31, 2022 | 5,235 | $ | 25.42 | $ | 53,080 | ||||||||||||
| Awarded | 4,315 | 4.41 | |||||||||||||||
| Released | (2,707) | 15.86 | |||||||||||||||
| Forfeited | (1,779) | 25.21 | |||||||||||||||
| Non-vested and outstanding as of December 31, 2023 | 5,064 | $ | 12.53 | $ | 19,193 | ||||||||||||
| Balance outstanding as of December 31, 2023 | 5,064 | $ | 12.53 | $ | 19,193 | ||||||||||||
| Awarded | 11,929 | 0.97 | |||||||||||||||
| Released | (3,016) | 9.49 | |||||||||||||||
| Forfeited | (1,455) | 14.49 | |||||||||||||||
| Non-vested and outstanding as of December 31, 2024 | 12,522 | $ | 2.03 | ||||||||||||||
| Expected to vest | 9,591 | $ | 2.06 | $ | 14,578 | ||||||||||||
RSUs granted to employees generally vest over a 1 to 4-year period, or upon achievement of certain performance conditions. As of December 31, 2024, total unrecognized compensation cost, adjusted for estimated forfeitures, related to non-vested RSUs and PRSUs was $17.6 million and the weighted-average remaining vesting period was 0.8 years.
PRSUs granted are generally subject to both a service-based vesting condition and a performance-based vesting condition. PRSUs will vest upon the achievement of specified performance targets and subject to continued service through the applicable vesting dates. The associated compensation cost is recognized over the requisite service period when it is probable that the performance condition will be satisfied. There were no PRSU grants in 2024. PRSUs granted in years 2023 and 2022 were immaterial.
Total stock-based compensation costs included in the consolidated statements of operations for the periods presented are as follows:
| Year Ended December 31, | |||||||||||||||||
| 2024 | 2023 | 2022 | |||||||||||||||
| (In thousands) | |||||||||||||||||
| Cost of revenue | $ | 1,080 | $ | 1,456 | $ | 9,933 | |||||||||||
| Sales and marketing | 7,394 | 10,354 | 19,575 | ||||||||||||||
| General and administrative | 6,789 | (5,706) | 40,690 | ||||||||||||||
| Product development | 6,726 | 5,750 | 39,440 | ||||||||||||||
| Total | $ | 21,989 | $ | 11,854 | $ | 109,638 | |||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2024 | Mar 14, 2025 | Showing above |
| 2023 | Mar 4, 2024 | |
| 2022 | Mar 16, 2023 | |
| 2021 | Feb 28, 2022 | |
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.