American Strategic Investment Co.NYC
American Strategic Investment Co. Stock Compensation Disclosure
Share-Based Compensation
Restricted Share Plan
The Company has an employee and director incentive restricted share plan (the “RSP”). Until an amendment to the RSP in August 2017, (the “RSP Amendment”), the RSP provided for the automatic grant of 1,333 restricted shares of common stock (“restricted shares”) to each of the independent directors. Following the RSP Amendment, the number of restricted shares to be issued automatically in those circumstances is equal to $30,000 divided by the then-current Estimated Per-Share NAV. In November 2017, the RSP was amended and restated to reflect the RSP Amendment and certain clarifying changes.
These automatic grants are made without any further approval by the Company’s board of directors or the stockholders, after initial election to the board of directors and after each annual stockholder meeting, with such restricted shares vesting annually over a five-year period following the grant date in increments of 20.0% per annum. The RSP provides the Company with the ability to grant awards of restricted shares to the Company’s board of directors, officers and employees (if the Company ever has employees), employees of the Advisor and its affiliates, employees of entities that provide services to the Company, directors of the Advisor or of entities that provide services to the Company, certain consultants to the Company and the Advisor and its affiliates or to entities that provide services to the Company. The total number of shares granted as awards under the RSP shall not exceed 5.0% of the Company’s outstanding shares of common stock on a fully diluted basis at any time and in any event will not exceed 1.5 million shares (as such number may be adjusted for stock splits, stock dividends, combinations and similar events).
Restricted share awards entitle the recipient to receive shares of common stock from the Company under terms that provide for vesting over a specified period of time. For restricted share awards granted prior to July 1, 2015, such awards would typically be forfeited with respect to the unvested restricted shares upon the termination of the recipient’s employment or other relationship with the Company. For restricted share awards granted on or after July 1, 2015, such awards provide for accelerated vesting of the portion of the unvested restricted shares scheduled to vest in the year of the recipient’s voluntary termination or the failure to be re-elected to the Company’s board of directors. Restricted shares may not, in general, be sold or otherwise transferred until restrictions are removed and the shares have vested. Holders of restricted shares receive cash distributions on the same basis as distributions paid on shares of common stock prior to the time that the restrictions on the restricted shares have lapsed and thereafter. Any distributions payable in shares of common stock will be subject to the same restrictions as the underlying restricted shares.
The following table displays restricted share award activity during the years ended December 31, 2018, 2017 and 2016:
Number of Restricted Shares | Weighted-Average Issue Price | ||||||
Unvested, December 31, 2015 | 4,799 | $ | 22.50 | ||||
Granted | 5,332 | 22.50 | |||||
Vested | (1,066 | ) | 22.50 | ||||
Unvested, December 31, 2016 | 9,065 | 22.50 | |||||
Granted | 4,233 | 21.25 | |||||
Vested | (2,133 | ) | 22.50 | ||||
Unvested, December 31, 2017 | 11,165 | 22.14 | |||||
Granted | 4,440 | 20.26 | |||||
Vested | (2,979 | ) | 22.14 | ||||
Unvested, December 31, 2018 | 12,626 | 21.48 | |||||
As of December 31, 2018 and 2017, the Company had $0.3 million and $0.2 million of unrecognized compensation cost related to unvested restricted share awards granted under the Company’s RSP. The cost is expected to be recognized over a weighted-average period of 3.6 years, respectively. Restricted share awards are expensed in accordance with the service period required. Compensation expense related to restricted share awards was approximately $17,000, $74,000 and $61,000 for the years ended December 31, 2018, 2017 and 2016, respectively. Compensation expense related to restricted share awards is recorded as general and administrative expense in the accompanying consolidated statements of operations and comprehensive loss.
Other Share-Based Compensation
The Company may issue common stock in lieu of cash to pay fees earned by the Company’s board of directors at the respective director’s election. There are no restrictions on the shares issued. There were no shares of common stock issued in lieu of cash during the years ended December 31, 2018, 2017 and 2016.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2018 | Mar 15, 2019 | Showing above |
| 2017 | Mar 19, 2018 | |
| 2016 | Mar 28, 2017 | |
| 2015 | Mar 16, 2016 | |
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.