Sachem Capital Corp. Stock Compensation Disclosure
15. Stock-Based Compensation and Employee Benefits
Stock-Based Compensation
On October 27, 2016, the Company adopted the 2016 Equity Compensation Plan (the “Plan”), the purpose of which is to align the interests of the Company’s officers, other employees, advisors and consultants or any subsidiary, if any, with those of the Company’s shareholders and to afford an incentive to such officers, employees, consultants and advisors to continue as such, to increase their efforts on the Company’s behalf and to promote the success of the Company’s business. The Plan is administered by the Compensation Committee. The maximum number of Common Shares reserved for the grant of awards under the Plan is 1,500,000, subject to adjustment as provided in Section 5 of the Plan. The number of securities remaining available for future issuance under the Plan as of December 31, 2024 was 781,262. The number of shares issuable to any one individual in a plan year is also limited to 100,000 shares, subject to adjustment as provided for in the Plan.
The table below summarizes the Company’s awards granted, forfeited, or vested under the 2016 Plan during the years ended December 31, 2024 and 2023:
Restricted Stock | |||||
Weighted Average | |||||
| Number of Shares |
| Grant Date Fair Value | ||
Unvested shares at December 31, 2022 | 189,596 |
| $ | 4.94 | |
Granted | 196,056 |
| 3.87 | ||
Vested | (157,483) | 4.50 | |||
Forfeited | (5,333) |
| 3.54 | ||
Unvested shares at December 31, 2023 | 222,836 |
| 3.74 | ||
Granted | 212,857 |
| 3.86 | ||
Vested | (195,071) | 4.39 | |||
Forfeited | (333) |
| 2.56 | ||
Unvested shares at December 31, 2024 | 240,289 |
| $ | 1.35 | |
During the years ended December 31, 2024 and 2023, the Company granted an aggregate of 212,857 and 196,056, respectively, of restricted Common Shares under the Plan, including restricted Common Shares granted to the Company’s Chief Executive Officer (see Note 12). The fair value of each block of shares at the time of grant was approximately $0.8 million.
With respect to the restricted Common Shares granted during the year ended December 31, 2024, (i) 33,666 shares vested on May 9, 2024; (ii) 37,285 shares vested on January 1, 2025; (iii) 33,667 shares will vest on May 1, 2025, and , respectively; and (iv) 37,286 shares will vest on January 1, 2026 and , respectively.
Stock-based compensation for the years ended December 31, 2024 and 2023, was $0.9 million and $0.8 million, respectively. As of December 31, 2024, there was unrecognized stock-based compensation expense of $0.7 million. Additionally, during the years ended December 31, 2024 and 2023, the Company had 333 and 5,333, respectively, of unvested restricted Common Shares forfeited to the Company as a result of the ending of the relationship with former employees.
Employee Benefits
On April 16, 2018, the Board approved the adoption of the Sachem Capital Corp. 401(k) Profit Sharing Plan (the “401(k) Plan”). All employees who meet the participation criteria are eligible to participate in the 401(k) Plan. Under the terms of the 401(k) Plan, the Company is obligated to contribute 3% of a participant’s compensation to the 401(k) Plan on behalf of an employee-participant. For the years ended December 31, 2024, and 2023, the 401(k) Plan expense was $0.1 million and $0.2 million, respectively, and is included under Compensation and employee benefits in the Consolidated Statements of Operations.
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.