Priority Technology Holdings, Inc.PRTH
Priority Technology Holdings, Inc. Stock Compensation Disclosure
Stock-based Compensation
2018 Equity Incentive Plan
The 2018 Plan was approved by the Company's Board of Directors and shareholders in July 2018. The 2018 Plan provided for the issuance of up to 6,685,696 of the Company's Common Stock, and these shares were registered on a Form S-8 during 2018. Under the 2018 Plan, the Company's compensation committee may grant awards of non-qualified stock options, incentive stock options, SARs, restricted stock awards, RSUs, other stock-based awards (including cash bonus awards) or any combination of the foregoing. Any current or prospective employees, officers, consultants or advisors that the Company's compensation committee (or, in the case of non-employee directors, the Company's Board of Directors) selects, from time to time, are eligible to receive awards under the 2018 Plan. If any award granted under the 2018 Plan expires, terminates, or is canceled or forfeited without being settled or exercised, or if a SAR is settled in cash or otherwise without the issuance of shares, shares of the Company's Common Stock subject to such award will again be made available for future grants. In addition, if any shares are surrendered or tendered to pay the exercise price of an award or to satisfy withholding taxes owed, such shares will again be available for grants under the 2018 Plan. On March 17, 2022, the Company's Board of Directors unanimously approved an amendment to the 2018 Plan which was subsequently approved by our shareholders, to increase the number of shares authorized for issuance under the plan by 2,500,000 shares, resulting in 9,185,696 shares of the Company's Common Stock authorized for issuance under the plan. These additional shares were registered on Form S-8 in December 2022.
Stock-based compensation was as follows:
| Years Ended December 31, | |||||||||||||||||
| (in thousands) | 2024 | 2023 | 2022 | ||||||||||||||
| 2018 Equity Incentive Plan | |||||||||||||||||
| Restricted stock units compensation expense | $ | 5,897 | $ | 6,423 | $ | 6,182 | |||||||||||
| Stock options compensation expense | 4 | 7 | 7 | ||||||||||||||
| Total stock-based compensation under the 2018 Equity Incentive Plan | 5,901 | 6,430 | 6,189 | ||||||||||||||
| ESPP compensation expense | 56 | 50 | 39 | ||||||||||||||
| Incentive units compensation expense | 161 | 288 | — | ||||||||||||||
| Total | $ | 6,118 | $ | 6,768 | $ | 6,228 | |||||||||||
For the year ended December 31, 2024 and 2023, the Company's income tax expense for stock-based compensation was immaterial. For the year ended December 31, 2022, the Company recognized an income tax benefit of approximately and $0.7 million for stock-based compensation expense. No stock-based compensation has been capitalized.
A summary of the activity in stock units for the 2018 Plan is as follows:
| Common Stock available for issuance at January 1, 2022 | 3,363,040 | |||||||
| New shares authorized for issuance | 2,500,000 | |||||||
| Stock options forfeited | 221,733 | |||||||
| RSUs granted | (2,878,949) | |||||||
PSUs granted(2) | (345,000) | |||||||
| RSUs forfeited | 353,196 | |||||||
| PSUs forfeited | — | |||||||
Shares withheld for taxes(1) | 291,266 | |||||||
| Common Stock available for issuance at December 31, 2022 | 3,505,286 | |||||||
| Stock options forfeited | 129,380 | |||||||
| RSUs granted | (641,578) | |||||||
| PSUs granted | — | |||||||
| RSUs forfeited | 226,100 | |||||||
| PSUs forfeited | 37,500 | |||||||
Shares withheld for taxes(1) | 291,110 | |||||||
| Common Stock available for issuance at December 31, 2023 | 3,547,798 | |||||||
| Stock options forfeited | 14,302 | |||||||
| RSUs granted | (1,132,450) | |||||||
| PSUs granted | (10,753) | |||||||
| RSUs forfeited | 403,750 | |||||||
| PSUs forfeited | 1,666 | |||||||
Shares withheld for taxes(1) | 326,282 | |||||||
| Common Stock available for issuance at December 31, 2024 | 3,150,595 | |||||||
(1)The number of shares surrendered to satisfy withholding taxes owed are subsequently added back to the shares available for grant under the 2018 Plan.
(2)The shares were deemed granted to calculate remaining available shares when the participants were made aware of the award in 2022 to properly account for the number of shares available for issuance. However, they were not granted for accounting purposes until 2023 once the respective performance criteria were met.
Details about the time-based equity-classified stock options granted under the plan are as follows:
| Number of Shares | Weighted-average Exercise Price | Weighted-average Remaining Contractual Term | Aggregate Intrinsic Value (in thousands) | ||||||||||||||||||||
Outstanding, December 31, 2023 | 876,512 | $ | 6.87 | 4.9 years | $ | 16 | |||||||||||||||||
| Exercised | (267,384) | 6.95 | |||||||||||||||||||||
Forfeited(1) | (14,302) | 6.95 | |||||||||||||||||||||
Outstanding, December 31, 2024 | 594,826 | 6.84 | 3.9 years | $ | 2,922 | ||||||||||||||||||
Exercisable at December 31, 2024 | 594,826 | $ | 6.84 | 3.9 years | $ | 2,922 | |||||||||||||||||
(1)Forfeited includes awards for which the participant has been terminated but has 90 days from the date of termination to exercise the award based on the agreement.
There were no options granted in 2024, 2023, or 2022. The intrinsic value of options exercised in 2024 was $0.8 million. There were no options exercised in 2023 or 2022. As of December 31, 2024, there were no unrecognized compensation costs related to stock options.
Equity-classified Restricted Stock Units
Below is a summary of the Company's equity-classified RSUs and PSUs for the periods presented:
| Underlying Common Shares | Weighted-average Grant Date Fair Value | |||||||||||||
| Service-based vesting: | ||||||||||||||
| Unvested at January 1, 2022 | 879,250 | $ | 5.51 | |||||||||||
Granted(1) | 2,878,948 | $ | 6.14 | |||||||||||
| Forfeited | (353,196) | $ | 6.04 | |||||||||||
| Vested | (822,602) | $ | 5.44 | |||||||||||
| Unvested at December 31, 2022 | 2,582,400 | $ | 5.70 | |||||||||||
Granted(1) | 641,578 | $ | 3.81 | |||||||||||
| Forfeited | (226,100) | $ | 5.44 | |||||||||||
| Vested | (1,028,782) | $ | 5.60 | |||||||||||
| Unvested at December 31, 2023 | 1,969,096 | $ | 5.68 | |||||||||||
Granted(1) | 1,132,450 | $ | 4.37 | |||||||||||
| Forfeited | (403,750) | $ | 6.37 | |||||||||||
| Vested | (1,037,012) | $ | 5.06 | |||||||||||
| Unvested at December 31, 2024 | 1,660,784 | $ | 5.00 | |||||||||||
| Performance-based vesting: | ||||||||||||||
| Unvested at January 1, 2022 | 99,453 | $ | 4.46 | |||||||||||
Granted(2) | 64,366 | $ | 5.00 | |||||||||||
| Vested | (64,366) | $ | 6.90 | |||||||||||
| Unvested at December 31, 2022 | 99,453 | $ | 3.24 | |||||||||||
Granted(2) | 345,000 | $ | 5.31 | |||||||||||
| Forfeited | (37,500) | $ | 5.31 | |||||||||||
| Vested | (116,958) | $ | 5.12 | |||||||||||
| Unvested at December 31, 2023 | 289,995 | $ | 5.31 | |||||||||||
| Granted | 10,753 | $ | 9.30 | |||||||||||
| Forfeited | (1,666) | $ | 5.31 | |||||||||||
| Vested | (101,674) | $ | 5.31 | |||||||||||
| Unvested at December 31, 2024 | 197,408 | $ | 5.56 | |||||||||||
(1)Includes 175,720 shares with an estimated fair value of $0.6 million, 143,605 shares with an estimated fair value of $0.5 million and 228,347 shares with an estimated fair value of $1.1 million issued to non-employees in December 31, 2024, 2023 and 2022, respectively.
(2)Includes only the portions of grants for which the performance goals have been determined and communicated to the grant recipient. Any grants for which the required performance goals have not been determined and communicated to the grant recipient are not considered to have been granted for accounting purposes.
As of December 31, 2024, there was $5.5 million and $0.5 million of unrecognized compensation costs for equity-classified service-based RSUs and performance-based RSUs, respectively, which are expected to be recognized over a remaining
weighted-average period of 1.9 years and 1.0 year, respectively. The total fair value of RSUs and PSUs that vested in 2024, 2023, and 2022 was $5.8 million, $1.3 million and $0.9 million, respectively.
Employee Stock Purchase Plan
On April 16, 2021, the 2021 Stock Purchase Plan was authorized by the Company's Board of Directors. The maximum number of shares available for purchase under the 2021 Stock Purchase Plan is 200,000 shares. The shares issued under the 2021 Stock Purchase Plan may be authorized but unissued or reacquired shares of Common Stock. All employees of the Company who work more than 20 hours per week and have been employed by the Company for at least 30 days may participate in the 2021 Stock Purchase Plan.
Under the 2021 Stock Purchase Plan, participants are offered, on the first day of the offering period, the option to purchase shares of Common Stock at a discount on the last day of the offering period. The offering period shall be for a period of three months, and the first offering period began during the first quarter of 2022. The 2021 Stock Purchase Plan provides eligible employees the opportunity to purchase shares of the Company's Common Stock on a quarterly basis through payroll deductions at a price equal to 95% of the lesser of the fair value on the first and last trading day of each quarter.
As of December 31, 2024, the Company had 45,018 shares available under the 2021 Stock Purchase Plan.Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2024 | Mar 6, 2025 | Showing above |
| 2021 | Mar 17, 2022 | |
| 2020 | Mar 31, 2021 | |
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.