Wheels Up Experience Inc.UP
Wheels Up Experience Inc. Stock Compensation Disclosure
STOCKHOLDERS’ EQUITY AND EQUITY-BASED COMPENSATION
(1) The number of non-vested RSUs as of January 1, 2024, the number of forfeited RSUs and the related weighted-average grant date fair values include 68,376 RSUs granted under the 2022 Inducement Grant Plan, which were forfeited in September 2024.
Stockholders’ Equity
Authorized Shares
Pursuant to the Amended and Restated Certificate of Incorporation, we are authorized to issue up to 1,525,000,000 shares, consisting of up to 1,500,000,000 shares of Common Stock and 25,000,000 shares of preferred stock. Holders of Common Stock are entitled to one vote per share; provided, that by agreement: (i) certain parties to the Investor Rights Agreement that are not a “citizen of the United States” (as defined in 49 USC § 40102(a)(15)(C)) (collectively, the “Non-Citizen Investors”) may be afforded collective voting rights equal to 1% of all shares of Common Stock entitled to vote at a meeting of the Company’s stockholders; (ii) for so long as such Non-Citizen Investors collectively hold such shares of Common Stock, the shares of Common Stock held by CK Wheels in excess of 23.9% of all shares of Common stock entitled to vote at a meeting of the Company’s stockholders will not have voting rights (subject to ratable adjustment if the Non-Citizen Investors cease to own (beneficially or of record) a certain number of shares of Common Stock); and (iii) any shares of Common Stock
owned by Delta above 29.9% will be neutral shares with respect to voting rights and will be voted in proportion to all other votes cast (“for”, “against” or “abstain”) at a meeting of the Company’s stockholders by stockholders other than by Delta.
2023 Common Stock Issuances
Pursuant to the Original Investor Rights Agreement, the Company issued the Initial Lenders 141,313,671 Initial Shares in a private placement on the Credit Agreement Closing Date. The Initial Shares were issued such that each Initial Lender received a pro rata portion of the Initial Shares equal to the proportion of its participation in the Term Loan as of the Credit Agreement Closing Date. The amount recorded for the Initial Issuance was determined using the relative fair value basis, which resulted in allocated gross proceeds of $64.2 million for the Initial Issuance. Issuance costs of $4.9 million were recorded as a reduction to Additional paid-in capital.
In connection with entering into the First Investor Rights Agreement Amendment, and substantially concurrently therewith on the Final Credit Agreement Closing Date, the Company entered into the Investor Rights Agreement Joinders with each Incremental Term Lender (or its applicable affiliate). Thereafter, the Company issued 529,926,270 Deferred Shares to the Lenders in a private placement on the Final Credit Agreement Closing Date. The Investor Shares were issued such that after the Investor Issuances, each Lender was issued a number of shares equal to its pro rata portion of the Investor Shares based on its participation in the Term Loan.
The Company recorded the Deferred Issuance as a forward contract for Common Stock within Additional paid-in capital on the consolidated balance sheet during the three months ended September 30, 2023. The amount recorded for the Deferred Issuance was determined using the relative fair value basis, which resulted in allocated gross proceeds of $240.9 million for the Deferred Issuance. Issuance costs of $18.3 million were recorded as a reduction to Additional paid-in capital during the year ended December 31, 2023.
In connection with entering into the First Investor Rights Agreement Amendment and the Investor Rights Agreement Joinders, on the Final Credit Agreement Closing Date, the Reallocated Shares were issued to the Incremental Term Lenders. The Company recorded the Reallocated Shares within Additional paid-in capital on the consolidated balance sheet during the three months ended December 31, 2023. The amount recorded for the Reallocated Shares was determined using the relative fair value basis, which resulted in allocated gross proceeds of $30.6 million. Issuance costs of $2.2 million were recorded as a reduction to Additional paid-in capital during the year ended December 31, 2023.
Equity-Based Compensation
The Company’s outstanding equity-based compensation awards to its directors, executive officers, employees and other eligible personnel have been made pursuant to the Wheels Up Experience Inc. 2021 Long-Term Incentive Plan, as amended and restated effective April 1, 2023 (as amended by the LTIP Amendment (as defined below), the “Amended and Restated 2021 LTIP”), the Wheels Up Experience Inc. 2022 Inducement Grant Plan, dated June 30, 2022 (the “2022 Inducement Grant Plan”), the Wheels Up Experience Inc. Performance Award Agreement, dated as of November 30, 2023, granted to George Mattson (the “CEO Performance Award”), the Wheels Up Experience Inc. Performance Award Agreement, dated as of March 3, 2024, granted to our former Chief Financial Officer (the “Forfeited CFO Performance Award”), the Wheels Up Experience Inc. Performance Award Agreement, dated as of May 20, 2024, granted to David Harvey (the “CCO Performance Award” and, collectively with the CEO Performance Award and Forfeited CFO Performance Award, the “Executive Performance Awards”), and nine equity-based compensation plans (collectively, the “WUP Management Incentive Plan”) and the Wheels Up Partners Holdings LLC Option Plan (the “WUP Option Plan”), each of which were approved by the board of directors of WUP prior to the Business Combination. Additional details about these equity-based compensation arrangements are below.
WUP Management Incentive Plan
In March 2014, the WUP Management Incentive Plan was established, which provided for the issuance of WUP profits interests, restricted or unrestricted, to employees, consultants and other qualified persons. Following the consummation of the Business Combination, no new grants can be made under the WUP Management Incentive
Plan. As of December 31, 2024, an aggregate of 3.1 million profits interests had been authorized and issued under the WUP Management Incentive Plan. Vested WUP profits interests are eligible to be exchanged into shares of Common Stock before July 13, 2031. Amounts of WUP profits interests reported in the tables below represent the maximum number of WUP profits interests outstanding or that could be realized upon vesting and immediately exchanged for the maximum number of shares of Common Stock. The actual number of shares of Common Stock received upon exchange of such WUP profits interests will depend on the trading price per share of Common Stock at the time of such exchange.
The following table summarizes the WUP profits interests activity under the WUP Management Incentive Plan as of December 31, 2024:
| Number of WUP Profits Interests | Weighted-Average Grant Date Fair Value | ||||||||||
| (in thousands) | |||||||||||
| Outstanding WUP profits interests as of January 1, 2024 | 2,881 | $ | 4.16 | ||||||||
| Granted | — | — | |||||||||
| Exchanged | — | — | |||||||||
| Expired/forfeited | — | — | |||||||||
| Outstanding WUP profits interests as of December 31, 2024 | 2,881 | 4.16 | |||||||||
The weighted-average remaining contractual term as of December 31, 2024 for WUP profits interests outstanding was approximately 6.5 years. All WUP profits interests were vested as of December 31, 2023.
WUP Restricted Interests
WUP restricted interests were time- and performance-based awards that vested when both of the following conditions were met: (i) ratably over a four-year service period; and (ii) upon the first to occur of (A) a change of control of WUP and (B) the later to occur of (1) six months after an initial public offering of WUP and (2) 30 days after the expiration of any applicable lock-up period in connection with an initial public offering of WUP. As a result, we started recording compensation cost for WUP restricted interests on the Business Combination Closing Date. The WUP restricted interests lock-up period expired on February 8, 2022 and all remaining WUP restricted interests vested during the year ended December 31, 2022.
WUP Option Plan
In December 2016, the WUP Option Plan was established, which provided for the issuance of stock options to purchase WUP common interests at an exercise price based on the fair market value of the interests on the date of grant. Generally, WUP stock options granted vested over a four-year service period and expire on the th anniversary of the grant date. As of December 31, 2024, the number of WUP stock options authorized and issued in aggregate under the WUP stock option plan was 1.8 million. Each outstanding WUP stock option is exercisable for one share of Common Stock.
The following table summarizes the activity under the WUP Option Plan as of December 31, 2024:
| Number of WUP Stock Options | Weighted- Average Exercise Price | Weighted-Average Grant Date Fair Value | |||||||||||||||
| (in thousands) | |||||||||||||||||
| Outstanding WUP stock options as of January 1,2024 | 1,129 | $ | 75.45 | $ | 12.64 | ||||||||||||
| Granted | — | — | — | ||||||||||||||
| Exercised | — | — | — | ||||||||||||||
| Forfeited | (303) | 78.83 | 15.55 | ||||||||||||||
| Expired | — | — | — | ||||||||||||||
| Outstanding WUP stock options as of December 31, 2024 | 826 | 74.21 | 11.57 | ||||||||||||||
| Exercisable WUP stock options as of December 31, 2024 | 826 | $ | 74.21 | 11.57 | |||||||||||||
The aggregate intrinsic value as of December 31, 2024 for WUP stock options that were outstanding and exercisable was nil. The weighted-average remaining contractual term as of December 31, 2024 for WUP stock options that were outstanding and exercisable was approximately 4.2 years, respectively. All WUP stock options were vested as of December 31, 2023.
Amended and Restated 2021 LTIP & 2022 Inducement Grant Plan
In connection with the Business Combination, the Wheels Up Board of Directors (the “Board”) and stockholders of Wheels Up adopted the Wheels Up Experience Inc. 2021 Long-Term Incentive Plan (the “Original 2021 LTIP”), for employees, consultants and other qualified persons. Following approval by the Board, (i) at the 2023 annual meeting of the Company’s stockholders, the Company’s stockholders approved the Amended and Restated 2021 LTIP to increase the aggregate number of shares of Common Stock available for awards made thereunder by 2,415,000 shares and amend certain other plan provisions, and (ii) at the 2024 annual meeting of the Company’s stockholders (the “2024 Annual Meeting”), the Company’s stockholders approved Amendment No. 1 to the Amended and Restated 2021 LTIP (the “LTIP Amendment”), to increase the aggregate number of shares of Common Stock available for awards made under the Amended and Restated 2021 LTIP by 25,000,000 shares and extend the termination date of such plan to April 15, 2034. The Amended and Restated 2021 LTIP provides for the grant of incentive options, nonstatutory options, restricted stock, RSUs, PSUs, rights, dividend equivalents, other stock-based awards, performance awards, cash awards or any combination of the foregoing. As of December 31, 2024, an aggregate of 30.1 million shares were authorized for issuance under the Amended and Restated 2021 LTIP.
On June 30, 2022, the Board adopted the 2022 Inducement Grant Plan to be used for a one-time employment inducement grant, pursuant to New York Stock Exchange (“NYSE”) Rule 303A.08, to our former Chief Financial Officer, in connection with his appointment as Chief Financial Officer. The maximum number of awards that could be granted under the 2022 Inducement Grant Plan were 205,128 shares of Common Stock, which were all granted in the form of RSUs to our former Chief Financial Officer on July 1, 2022. RSU awards granted under the 2022 Inducement Grant Plan contained generally the same terms as other awards granted under the Original 2021 LTIP during the fiscal year ended December 31, 2022. Due to such similarities, the RSUs granted under the 2022 Inducement Grant Plan are consolidated with those issued under the Amended and Restated 2021 LTIP in the discussion of RSUs below. Upon the departure of our former Chief Financial Officer from the Company in September 2024, the 2022 Inducement Grant Plan terminated and all unvested RSUs thereunder were forfeited.
RSUs
RSUs granted under the Amended and Restated 2021 LTIP generally vest at intervals up to a four-year service period, subject to the grantee’s continued service to the Company through the applicable vesting date. The following table summarizes the activity under the Amended and Restated 2021 LTIP and 2022 Inducement Grant Plan related to RSUs as of December 31, 2024:
Number of RSUs(1) | Weighted-Average Grant Date Fair Value | ||||||||||
| (in thousands) | |||||||||||
| Non-vested RSUs as of January 1, 2024 | 1,848 | $ | 9.35 | ||||||||
| Granted | 10,606 | 2.54 | |||||||||
| Vested | (1,178) | 8.29 | |||||||||
| Forfeited | (1,142) | 5.61 | |||||||||
| Non-vested RSUs as of December 31, 2024 | 10,134 | 2.76 | |||||||||
The total unrecognized compensation cost related to non-vested RSUs was $22.3 million as of December 31, 2024 and is expected to be recognized over a weighted-average period of 2.7 years.
PSUs
Under the terms of the PSUs granted to certain employees, upon the achievement of certain pre-determined performance objectives, each PSU may settle into shares of our Common Stock. The PSUs will vest, if at all, upon the actual achievement of the related performance objectives, subject to specified change of control exceptions and the grantee’s continued service to the Company through the applicable vesting date.
The following table summarizes the activity under the Amended and Restated 2021 LTIP related to PSUs as of December 31, 2024:
| Number of PSUs | Weighted-Average Grant Date Fair Value | ||||||||||
| (in thousands) | |||||||||||
| Non-vested PSUs as of January 1, 2024 | 18 | $ | 2.89 | ||||||||
| Granted | 482 | 3.07 | |||||||||
| Vested | — | — | |||||||||
| Forfeited | (113) | 3.03 | |||||||||
| Non-vested PSUs as of December 31, 2024 | 387 | 3.05 | |||||||||
Compensation expense associated with PSUs is recognized over the vesting period of the awards that are ultimately expected to vest when the achievement of the related performance objectives becomes probable. As of December 31, 2024, the achievement of the performance objectives associated with certain non-vested PSUs was deemed not probable of being achieved and no expense has been recognized associated with those awards. The total unrecognized compensation cost related to non-vested PSUs deemed probable of being achieved was $0.4 million as of December 31, 2024, and is expected to be recognized over a weighted-average period of 1.9 years.
Market-Based RSUs
The Company previously granted RSUs subject to market-based vesting conditions (“Market-Based RSUs”) to certain employees, which were settleable into shares of Common Stock. Market-Based RSUs were subject to
vesting, if at all, based on the closing trading price per share of our Common Stock over any 30 consecutive trading day-period that occurred prior to the end date specified in the underlying award agreement, subject to continued service through each such vesting date. Based on the Common Stock trading price, the market conditions for the outstanding Market-Based RSUs were not met, and no shares had vested as of June 30, 2023. All outstanding unvested Market-Based RSUs were forfeited and cancelled during the three months ended June 30, 2023.
Wheels Up Stock Options
Wheels Up stock options granted under the Amended and Restated 2021 LTIP vest quarterly over a three-year service period and expire on the th anniversary of the grant date. The following table summarizes the activity under the Amended and Restated 2021 LTIP related to Wheels Up stock options as of December 31, 2024:
| Number of Wheels Up Stock Options | Weighted- Average Exercise Price | Weighted-Average Grant Date Fair Value | |||||||||||||||
| (in thousands) | |||||||||||||||||
| Outstanding Wheels Up stock options as of January 1, 2024 | 77 | $ | 100.00 | $ | 47.52 | ||||||||||||
| Granted | — | — | — | ||||||||||||||
| Exercised | — | — | — | ||||||||||||||
| Forfeited | — | — | — | ||||||||||||||
| Expired | — | — | — | ||||||||||||||
| Outstanding Wheels Up stock options as of December 31, 2024 | 77 | 100.00 | 47.52 | ||||||||||||||
| Exercisable Wheels Up stock options as of December 31, 2024 | 77 | 100.00 | 47.52 | ||||||||||||||
The aggregate intrinsic value as of December 31, 2024 for Wheels Up stock options that were outstanding and exercisable was nil. The weighted-average remaining contractual term as of December 31, 2024 for Wheels Up stock options that were outstanding and exercisable was approximately 2.9 years.
Executive Performance Awards
The Compensation Committee of the Board approved the CEO Performance Award granted to George Mattson, the Company’s Chief Executive Officer, Forfeited CFO Performance Award granted to our former Chief Financial Officer, and CCO Performance Award granted to David Harvey, the Company’s Chief Commercial Officer, on November 30, 2023, March 3, 2024 and May 20, 2024, respectively. Except as set forth in Section III.A of the Amended and Restated 2021 LTIP, the Executive Performance Awards incorporate the terms of the Amended and Restated 2021 LTIP, as it may be amended from time-to-time. Each Executive Performance Award is intended to constitute a standalone equity incentive plan and any shares of Common Stock issued under such awards will not be issued under, or count against the number of shares of Common Stock reserved pursuant to, any of the Company’s other equity-based compensation plans or awards. Upon the departure of our former Chief Financial Officer from the Company in September 2024, the Forfeited CFO Performance Award was terminated and any right to receive shares of Common Stock or cash payments thereunder in the future was forfeited. No shares of Common Stock had been issued or cash payments made to our former Chief Financial Officer under the Forfeited CFO Performance Award prior to forfeiture. In addition, all compensation expense associated with the Forfeited CFO Performance Award was reversed during the year December 31, 2024.
The issuance of any shares under the Executive Performance Awards upon vesting is contingent upon receipt of the approval of each standalone plan by the Company’s stockholders. At the 2024 Annual Meeting, the Company’s stockholders approved the CEO Performance Award and the potential issuance of up to 73.0 million shares of Common Stock thereunder, subject to the satisfaction of the applicable performance- and service-based vesting conditions under such award, if at all. The Company currently intends to obtain approval of the CCO Performance Award as a standalone plan by the Company’s stockholders at a future meeting of the Company’s stockholders or by written consent of the Company’s stockholders. If on any Determination Date (as defined below) there is not a sufficient amount of shares authorized by the Company’ stockholders to deliver the number of shares due under the
Executive Performance Awards or any such Executive Performance Award has not been approved by the Company’s stockholders, then upon vesting, if at all, any amounts payable under any such Executive Performance Award will not be paid in the form of the issuance of new shares of Common Stock and instead will be payable in cash.
The Executive Performance Awards are one-time performance awards granted to our Chief Executive Officer and Chief Commercial Officer in lieu of future annual equity compensation grants and are intended to provide each of them with the opportunity to share in the long-term growth of the value of the Company. The Executive Performance Awards consist of a contingent right to receive a number of newly issued shares of Common Stock upon: (i) repayment of $390.0 million of the Company’s borrowings under the Term Loan, plus any additional amounts drawn on the Term Loan, if at all; and (ii) satisfaction of service-based vesting conditions, which provide that 25% of each Executive Performance Award will be eligible to vest on each of September 20, 2024, 2025, 2026 and 2027, so long as such officer remains employed with the Company as of such dates. A “Repayment Event” includes certain refinancings of the Term Loan on or before September 20, 2028, the scheduled maturity date of the Term Loan. Subject to the satisfaction of the applicable performance- and service-based vesting conditions described above, the number of shares of Common Stock that may vest and be issued under any Executive Performance Award will first be determined on December 31st of the year in which a Repayment Event occurs, and then on December 31st of each subsequent year (each such date, a “Determination Date”) until December 31, 2028 (the “Final Determination Date”). At any Determination Date following a Repayment Event, the number of shares of Common Stock issuable under any Executive Performance Award in connection with such Determination Date, if any, will be determined using the then applicable percentage associated with the service-based vesting condition (the “Service Vested Percentage”).
The number of shares of Common Stock subject to vesting and issuance, if any, under any Executive Performance Award on each Determination Date following a Repayment Event is based on a formula that aligns the number of shares of Common Stock issuable under such Executive Performance Award with the repayment or refinancing of the Term Loan and Revolving Credit Facility, the then applicable dollar value of the shares of Common Stock issued to the Lenders under the Investor Rights Agreement and the volume weighted average price per share of Common Stock during the 60 trading day period prior to the applicable Determination Date. The number of shares of Common Stock, if any, issuable under the Executive Performance Awards will vary depending on, among other things: (i) the occurrence and timing of a Repayment Event; (ii) the Total Investor Return (as defined in the Executive Performance Awards) as a multiple of the aggregate principal amount of the Term Loan and any borrowings under the Revolving Credit Facility as of the applicable Determination Date, if any; and (iii) the Service Vested Percentage as of the applicable Determination Date. There can be no assurance that the performance- and service-based vesting conditions under the Executive Performance Awards will be satisfied or that the foregoing variables will result in the vesting and issuance of any shares of Common Stock or cash payments pursuant to the Executive Performance Awards.
As of December 31, 2024, the performance-based vesting conditions for the outstanding and unvested Executive Performance Awards were not met and no shares had vested under the plans. As of December 31, 2024, the achievement of the related performance objective was deemed probable of being achieved on September 20, 2028, the scheduled maturity date of the Term Loan. The grant-date fair value of the CCO Performance Award as of May 20, 2024, using a Monte Carlo simulation model, was $43.9 million.
The total unrecognized compensation cost related to the outstanding and unvested Executive Performance Awards was $154.6 million as of December 31, 2024 and is expected to be recognized over 4.0 years. As of December 31, 2024, the carrying amount of the CEO Performance Award was classified as equity in the consolidated balance sheet under Additional paid-in capital; however, since we have not obtained approval from the Company’s stockholders of the CCO Performance Award as a standalone plan and for the issuance of any shares of Common Stock to satisfy settlement of shares of Common Stock issuable thereunder, the carrying amount associated with the plan has been classified as mezzanine equity in the consolidated balance sheet under Contingent performance awards.
Fair Value Estimates
We estimated fair value to measure compensation cost of the Executive Performance Awards on the date of grant using techniques that are considered to be consistent with the objective of measuring fair value. In selecting the appropriate technique, management considered, among other factors, the nature of the instrument, the market risks that it embodies, and the expected means of settlement.
Estimating fair values of the Executive Performance Awards requires the development of significant and subjective estimates that may, and are likely to, change over the duration of the instrument with related changes in internal and external factors. In addition, option-pricing models are highly volatile and sensitive to changes.
The following table summarizes the significant assumptions used to estimate the fair value on the date of grant for the outstanding and unvested Executive Performance Awards:
2024(1) | 2023 (2) | ||||||||||
| Expected term (in years) | 4.7 | 5.2 | |||||||||
| Volatility | 70% | 60% | |||||||||
| Risk-free rate | 4.4% | 4.3% | |||||||||
| Expected dividend rate | —% | —% | |||||||||
(1) Assumptions used in the Monte Carlo simulation related to the CCO Performance Award, which was granted on May 20, 2024.
(2) Assumptions used in the Monte Carlo simulation related to the CEO Performance Award, which was granted on November 30, 2023.
Equity-Based Compensation Expense
Compensation expense for WUP profits interests recognized in the consolidated statements of operations was nil, $0.1 million and $1.3 million for the years ended December 31, 2024, 2023 and 2022, respectively.
Compensation expense for WUP restricted interests recognized in the consolidated statements of operations was nil, nil and $4.3 million for the years ended December 31, 2024, 2023 and 2022, respectively.
Compensation expense for WUP stock options under the WUP Option Plan and Wheels Up stock options under the Amended and Restated 2021 LTIP recognized in the consolidated statements of operations was nil, $1.1 million and $7.7 million for the years ended December 31, 2024, 2023 and 2022, respectively.
Compensation expense for RSUs and PSUs under the Amended and Restated 2021 LTIP recognized in the consolidated statements of operations was $10.9 million, $16.7 million and $41.1 million for the years ended December 31, 2024, 2023 and 2022, respectively.
Compensation expense for the Executive Performance Awards recognized in the consolidated statements of operations was $35.1 million, $2.5 million and nil for the years ended December 31, 2024, 2023 and 2022, respectively.
The following table summarizes equity-based compensation expense recognized by consolidated statement of operations line item (in thousands):
| Year Ended December 31, | |||||||||||||||||
| 2024 | 2023 | 2022 | |||||||||||||||
| Cost of revenue | $ | 2,228 | $ | 3,927 | $ | 14,456 | |||||||||||
| Technology and development | 1,302 | 2,096 | 3,180 | ||||||||||||||
| Sales and marketing | 661 | 1,764 | 11,009 | ||||||||||||||
| General and administrative | 41,786 | 17,846 | 60,334 | ||||||||||||||
| Total equity-based compensation expense | $ | 45,977 | $ | 25,633 | $ | 88,979 | |||||||||||
Earnout Shares
As part of the Business Combination, existing holders of WUP equity, including certain holders of WUP profits interests and restricted interests under the WUP Management Incentive Plan, but excluding holders of WUP stock options, have the right to receive up to 0.9 million additional shares of Common Stock (the “Earnout Shares”) that will vest, if at all, upon the achievement of separate market conditions. One-third of the Earnout Shares will meet the market conditions when the closing Common Stock price is greater than or equal to $125.00 for any 20 trading days within a period of 30 consecutive trading days on or before July 13, 2026. An additional one-third will vest when the Common Stock is greater than or equal to $150.00 over the same measurement period. The final one-third will vest when the Common Stock is greater than or equal to $175.00 over the same measurement period.
Earnout Shares are attributable to vested WUP profits interests and restricted interests as of the date each of the Earnout Share market conditions are met. No Earnout Shares had been issued as of December 31, 2024.
The grant-date fair value of the Earnout Shares attributable to the holders of WUP profits interests and restricted interests, using a Monte Carlo simulation model, was $57.9 million. The derived service period began on the Business Combination Closing Date and had a weighted-average period of 1.7 years.
Based on the Common Stock trading price, the market conditions were not met and no Earnout Shares vested as of December 31, 2024. Compensation expense for Earnout Shares recognized in the consolidated statements of operations was nil, $1.4 million and $38.5 million for the years ended December 31, 2024, 2023 and 2022, respectively.
Treasury Stock
As of December 31, 2024, we had 439,451 shares of treasury stock. The increase in treasury stock during the year ended December 31, 2024 reflects shares of Common Stock withheld to settle employee taxes due upon the vesting of RSUs. During the year ended December 31, 2024, we did not cancel or reissue any shares of Common Stock held as treasury stock.
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.