Via Renewables, Inc.VIASP
Via Renewables, Inc. Stock Compensation Disclosure
11. Stock-Based Compensation
Restricted Stock Units
We maintain a Long-Term Incentive Plan ("LTIP") for employees, consultants and directors of the Company and its affiliates who perform services for the Company. The purpose of the LTIP is to provide a means to attract and retain individuals to serve as directors, employees and consultants who provide services to the Company by affording such individuals a means to acquire and maintain ownership of awards, the value of which is tied to the performance of the Company’s Class A common stock. The LTIP provides for grants of cash payments, stock options, stock appreciation rights, restricted stock or units, bonus stock, dividend equivalents, and other stock-based awards with the total number of shares of stock available for issuance under the LTIP not to exceed 2,750,000 shares.
Restricted stock units granted to our officers, employees, non-employee directors and certain employees of our affiliates who perform services for the Company vest over approximately one year for non-employee directors and ratably over approximately to four years for officers, employees, and employees of affiliates, with the initial vesting date occurring in May of the subsequent year. Each restricted stock unit is entitled to receive a dividend equivalent when dividends are declared and distributed to shareholders of Class A common stock. These dividend equivalents are retained by the Company, reinvested in additional restricted stock units effective as of the record date of such dividends and vested upon the same schedule as the underlying restricted stock unit.
The Company measures the cost of awards classified as equity awards based on the grant date fair value of the award, and the Company measures the cost of awards classified as liability awards at the fair value of the award at each reporting period. The Company has utilized an estimated 10% annual forfeiture rate of restricted stock units in determining the fair value for all awards excluding those issued to executive level recipients and non-employee directors, for which no forfeitures are estimated to occur. The Company has elected to recognize related compensation expense on a straight-line basis over the associated vesting periods.
Although the restricted stock units allow for cash settlement of the awards at the sole discretion of management of the Company, management intends to settle the awards by issuing shares of the Company’s Class A common stock.
Merger and Delisting of Class A Common Stock
On June 13, 2024, we consummated the previously announced Merger, following which Mr. Maxwell and his affiliates became the owners of all of the issued and outstanding shares of Class A common stock and Class B common stock. Effective as of the end of trading on June 13, 2024, the Class A common stock ceased to trade on NASDAQ. For a more detailed description of the Merger, please see Note 2 “Basis of Presentation and Summary of Significant Accounting Policies” in the notes to our consolidated financial statements.
As a result of the Merger, all of the Company’s outstanding restricted stock units were converted into $11.00 per share (other than those owned by Mr. Maxwell, which were cancelled for no consideration). The total payout for the settlement of restricted stock units was $0.6 million, which was paid by Retailco. This was recorded as contribution from non-controlling interest.
Total stock-based compensation expense for the years ended December 31, 2024, 2023 and 2022 was $2.4 million, $2.3 million and $3.2 million. Of the $2.4 million stock-based compensation for 2024, $1.7 million was recorded as accelerated expense due to conversion as a result of merger transaction. Total income tax expense/(benefit) related to stock-based compensation recognized in net income (loss) was $0.2 million, $0.2 million and less than $0.1 million for the years ended December 31, 2024, 2023 and 2022.
Equity Classified Restricted Stock Units
Restricted stock units issued to employees and officers of the Company are classified as equity awards. The fair value of the equity classified restricted stock units is based on the Company’s Class A common stock price as of the grant date. The Company recognized stock based compensation expense of $2.4 million, $2.3 million and $3.1 million for the years ended December 31, 2024, 2023 and 2022, respectively of which $1.6 million was recorded as accelerated expense due to conversion as a result of the Merger. This expense was recorded in general and administrative expense with a corresponding increase to additional paid in capital. The following table summarizes equity classified restricted stock unit activity for the year ended December 31, 2024:
| Number of Shares (in thousands) | Weighted Average Grant Date Fair Value | |||||||
| Unvested at December 31, 2023 | 136 | $ | 23.21 | |||||
| Granted | 16 | 11.00 | ||||||
| Dividend reinvestment issuances | — | — | ||||||
| Vested | (88) | 10.96 | ||||||
| Forfeited | (64) | 11.00 | ||||||
| Unvested at December 31, 2024 | — | $ | — | |||||
For the year ended December 31, 2024, 88,004 restricted stock units vested, with 33,883 shares of Class A common stock distributed to the holders of these units and 54,121 shares of Class A common stock withheld by the Company to cover taxes owed on the vesting of such units. As of December 31, 2024, there was zero unrecognized compensation cost related to the Company’s equity classified restricted stock units.
Change in Control Restricted Stock Units
In 2018, the Company granted Change in Control Restricted Stock Units ("CIC RSUs") to certain officers that vest upon a "Change in Control", if certain conditions are met. The CIC RSUs vested upon completion of the Merger. The equity classified restricted stock unit table above includes 16,465 CIC RSUs as the conditions for Change in Control was met. The Company recognized $0.2 million stock compensation accelerated expense related to the CIC RSUs during for the year ended December 31, 2024.
Liability Classified Restricted Stock Units
Restricted stock units issued to non-employee directors of the Company and employees of certain of our affiliates are classified as liability awards as the awards are either to a) non-employee directors that allow for the recipient to choose net settlement for the amount of withholding taxes dues upon vesting or b) to employees of certain affiliates of the Company and are therefore not deemed to be employees of the Company. The fair value of the liability classified restricted stock units is based on the Company’s Class A common stock price as of the reported period ending date. The Company recognized stock based compensation expense of $0.1 million, less than $0.1 million, and $0.1 million for the year ended December 31, 2024, 2023 and 2022 of which less than $0.1 million was recorded as accelerated expense due to conversion as a result of Merger for the year ended December 31, 2024. The following table summarizes liability classified restricted stock unit activity for the year ended December 31, 2024. The following table summarizes liability classified restricted stock unit activity and unvested restricted stock units for the year ended December 31, 2024:
| Number of Shares (in thousands) | Weighted Average Reporting Date Fair Value | |||||||
| Unvested at December 31, 2023 | 17 | $ | 9.40 | |||||
| Granted | — | — | ||||||
| Dividend reinvestment issuances | — | — | ||||||
| Vested | (8) | 10.96 | ||||||
| Forfeited | (9) | 11.00 | ||||||
| Unvested at December 31, 2024 | — | $ | — | |||||
For the year ended December 31, 2024, 7,588 restricted stock units vested, with 7,588 shares of Class A common stock distributed to the holders of these units and zero shares of Class A common stock withheld by the Company to cover taxes owed on the vesting of such units. As of December 31, 2024, there was zero of total unrecognized compensation cost related to the Company’s liability classified restricted stock units.
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.