PLIANT THERAPEUTICS, INC.PLRX
PLIANT THERAPEUTICS, INC. Stock Compensation Disclosure
Stock-Based Compensation
Equity Incentive Plans
In 2015, the Company's Board of Directors adopted the 2015 Equity Incentive Plan, as amended in 2018, 2019 and 2020 (the “2015 Plan”), which provided for the grant of incentive stock options, nonqualified stock options or other awards including stock appreciation rights and restricted stock awards to the Company’s employees, officers, directors, advisors, and consultants. In May 2020, the Board of Directors adopted the 2020 Stock Option and Incentive Plan (the “2020 Plan”) and suspended the 2015 Plan. Awards outstanding under either the 2015 Plan or 2020 Plan that are cancelled, expire or otherwise terminated subsequent to May 2020 will become available for issuance as common stock under the 2020 Plan. Additionally, the 2020 Plan is subject to automatic increases on January 1 of each year beginning January 1, 2021. The number of shares added each January 1 will be equal to the lesser of: (i) 5% of the outstanding shares on the immediately preceding December 31 or (ii) such amount as determined by the compensation committee of the Board of Directors.
The 2020 Plan provides for the grant of incentive stock options, nonqualified stock options or other awards including stock appreciation rights, restricted stock awards and restricted stock units to the Company’s employees, officers, directors, advisors and consultants. As of December 31, 2024, the 2020 Plan had 4,212,229 shares of common stock available for future issuance.
In 2022, the Board of Directors adopted the 2022 Inducement Plan ("Inducement Plan"), under which the Company may grant nonqualified stock options or other awards including stock appreciation rights and restricted stock awards. As of December 31, 2024, 1,460,000 shares of common stock were available for issuance.
Options under the 2020 Plan and Inducement Plan may be granted for periods of up to 10 years and at prices no less than the market price of the Company’s common stock on the date of grant, provided, however, that the exercise price of an incentive stock option granted to a 10% shareholder shall not be less than 110% of the fair value of the shares on the date of grant and the option is not exercisable after the expiration of five years from the date of grant.
Incentive Stock Options and Nonqualified Stock Options
Stock options issued under either the 2015 Plan, the 2020 Plan or the Inducement Plan generally vest over four years and expire ten years from the date of grant. Certain options provide for accelerated vesting if there is a change in control, as defined in the respective plans.
The Company used Black-Scholes option pricing model to estimate stock-based compensation expense for stock option awards with the following assumptions:
| Year Ended December 31, | |||||||||||||||||||||||||||||||||||
| 2024 | 2023 | 2022 | |||||||||||||||||||||||||||||||||
| Min | Max | Min | Max | Min | Max | ||||||||||||||||||||||||||||||
| Expected volatility | 85.02% | 88.02% | 80.97% | 83.28% | 73.78% | 80.64% | |||||||||||||||||||||||||||||
| Risk-free interest rate | 3.45% | 4.60% | 3.42% | 4.68% | 1.64% | 4.16% | |||||||||||||||||||||||||||||
| Expected dividend | — | — | — | — | — | — | |||||||||||||||||||||||||||||
| Expected term (in years) | 5.31 | 6.08 | 5.31 | 6.08 | 5.33 | 6.08 | |||||||||||||||||||||||||||||
| Underlying common stock fair value | $11.09 | $17.44 | $15.25 | $34.65 | $4.92 | $24.23 | |||||||||||||||||||||||||||||
A summary of option activity under the 2015 Plan and the 2020 Plan is as follows:
| Number of Options | Weighted- Average Exercise Price per Share | Weighted- Average Remaining Contractual Term (in Years) | Aggregate Intrinsic Value (in thousands) | ||||||||||||||||||||
| Outstanding as of December 31, 2023 | 6,953,487 | $ | 17.95 | 7.7 | $ | 32,646 | |||||||||||||||||
| Granted | 2,541,819 | $ | 15.00 | ||||||||||||||||||||
| Exercised | (248,343) | $ | 7.29 | ||||||||||||||||||||
| Forfeited | (946,159) | $ | 19.18 | ||||||||||||||||||||
| Outstanding as of December 31, 2024 | 8,300,804 | $ | 17.23 | 7.5 | $ | 13,769 | |||||||||||||||||
| Exercisable as of December 31, 2024 | 4,733,737 | $ | 16.99 | 6.6 | $ | 11,734 | |||||||||||||||||
| Vested and expected to vest as of December 31, 2024 | 8,300,804 | $ | 17.23 | 7.5 | $ | 13,769 | |||||||||||||||||
As of December 31, 2024, there was $42.2 million of unrecognized compensation costs that is expected to be recognized over the weighted-average periods of 2.5 years related to stock options. The total intrinsic value of stock options exercised was $1.9 million, $11.4 million and $2.0 million for December 31, 2024, 2023 and 2022, respectively. Intrinsic value represents the difference between the current fair value of the underlying stock and the exercise price of the stock option at the respective balance sheet dates. The weighted-average grant date fair value of options granted during the years ended December 31, 2024, 2023 and 2022 was $15.00, $27.22 and $7.82 per share, respectively.
Restricted Stock Units
The service-based condition for restricted stock units ("RSUs") is generally satisfied over or three years. The following table sets forth the outstanding RSUs and related activity for the year ended December 31, 2024:
| Restricted Stock Units | Weighted Average Grant Date Fair Value | ||||||||||
| Unvested and outstanding as of December 31, 2023 | 874,748 | $ | 29.85 | ||||||||
| Granted | 599,011 | $ | 17.39 | ||||||||
| Released | (425,979) | $ | 25.93 | ||||||||
| Forfeited | (115,146) | $ | 24.63 | ||||||||
| Unvested and outstanding as of December 31, 2024 | 932,634 | $ | 24.28 | ||||||||
As of December 31, 2024, the Company had $13.4 million of unrecognized stock-based compensation expense related to outstanding RSUs expected to be recognized over a weighted-average period of 1.6 years.
Performance-Based Restricted Stock Units
In July 2022 the Company granted performance-based restricted stock units ("PSUs") that vest upon the achievement of market and performance conditions. Market conditions include the Company's total shareholder return ("TSR") relative to the NASDAQ Biotechnology Index over the term of the award ending on June 30, 2024, and performance conditions consist of multiple clinical development milestones associated with bexotegrast. The performance vesting conditions generally must be satisfied within a two-year period and are forfeited if the vesting conditions are not met. Additionally, the number of shares of common stock issued upon vesting will range from 0% to 200% of the PSUs based on achievement of certain targets.
The fair value of PSUs with clinical development vesting conditions were determined to be equal to the fair market value of the Company's share price on the date of grant. The fair value of the TSR PSUs were derived from a Monte Carlo simulation model that used the following key assumptions:
| Valuation date share price | $ | 17.57 | |||
| Award term (years) | 1.92 | ||||
| Volatility | 70.62 | % | |||
| Correlation coefficient | 0.3508 | ||||
| Average peer group volatility | 79.69 | % | |||
| Average peer group correlation coefficient | 0.4397 | ||||
| Risk free interest rate | 2.84 | % | |||
The following table sets forth the outstanding PSUs associated with the TSR goal and related activity for the years ended December 31, 2024 and 2023:
| Performance Stock Units | Weighted Average Grant Date Fair Value | ||||||||||
| Unvested balance as of December 31, 2022 | 354,532 | $ | 29.15 | ||||||||
| Forfeited | (25,782) | $ | 29.15 | ||||||||
| Unvested balance at December 31, 2023 | 328,750 | $ | 29.15 | ||||||||
| Vested | (155,290) | $ | 29.15 | ||||||||
| Forfeited | (173,460) | 29.15 | |||||||||
| Unvested balance at December 31, 2024 | — | $ | — | ||||||||
As of December 31, 2022, 177,266 PSUs, with a weighted average grant date fair value of $17.57, associated with clinical development milestones met their vesting conditions. In March and July 2023 the second and the third clinical development vesting conditions were achieved and the remaining 531,792 PSUs relating to clinical development vesting conditions vested. There are no remaining PSUs outstanding as of December 31, 2024.
2020 Employee Stock Purchase Plan
In June 2020, the Company adopted the 2020 Employee Stock Purchase Plan (the "2020 ESPP") and reserved 700,000 shares of common stock for future issuance under the plan. The 2020 ESPP is subject to automatic increases on January 1 of each calendar year, beginning January 1, 2021, by the lesser of (i) 1% of the outstanding shares on the immediately preceding December 31, (ii) 700,000 shares or (iii) such lesser amount as determined by, the compensation committee of the Board of Directors.
Under the 2020 ESPP, eligible employees may purchase shares of our common stock through payroll deductions that cannot exceed 15% of the employee’s salary. The 2020 ESPP provides for a six-month offering period. At the end of the purchase period, eligible employees are permitted to purchase shares of common stock at the lower of 85% of the fair market value at the beginning or end of the offering period subject to tax limitations on the total value of the purchase. The 2020 ESPP is considered a compensatory plan, and the Company recorded $0.5 million, $0.6 million and $0.4 million in stock-based compensation expense for years ended December 31, 2024, 2023 and 2022, respectively. During the years ended December 31, 2024, 2023 and 2022, 110,222 shares, 82,428 shares and 85,969 shares, respectively, of common stock were issued under the 2020 ESPP.
The Company used the Black-Scholes option pricing model to estimate stock-based compensation expense for the 2020 ESPP with the following assumptions:
| Year Ended December 31, | |||||||||||||||||
| 2024 | 2023 | 2022 | |||||||||||||||
| Risk-free interest rate | 4.80% - 5.27% | 5.20% -5.47% | 0.60% -3.34% | ||||||||||||||
| Expected term of options (in years) | 0.50 | 0.50 | 0.50 | ||||||||||||||
| Expected stock price volatility | 50.95% - 63.92% | 54.78% - 69.15% | 63.17% - 82.02% | ||||||||||||||
| Expected dividends | —% | —% | —% | ||||||||||||||
Stock-Based Compensation Expense
The following table presents the classification of stock-based compensation expense during the years ended December 31, 2024, 2023 and 2022 (in thousands):
| Year Ended December 31, | |||||||||||||||||
| 2024 | 2023 | 2022 | |||||||||||||||
| Restricted stock awards | $ | — | $ | — | $ | 36 | |||||||||||
| Stock options and ESPP | 24,764 | 21,313 | 13,280 | ||||||||||||||
| Restricted stock units | 11,585 | 11,149 | 1,892 | ||||||||||||||
| Performance-based restricted stock units | 1,277 | 12,021 | 7,390 | ||||||||||||||
| Total stock-based compensation expense | $ | 37,626 | $ | 44,483 | $ | 22,598 | |||||||||||
| Research and development expenses | $ | 14,108 | $ | 17,973 | $ | 8,730 | |||||||||||
| General and administrative expenses | $ | 23,518 | $ | 26,510 | $ | 13,867 | |||||||||||
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.