STOCK-BASED COMPENSATION

9 Months Ended

Sep. 30, 2021

Share-based Payment Arrangement [Abstract]

Summary of Stock-Based Compensation Plans—The Company maintains equity incentive plans that provide for the grant of stock-based awards to its directors, officers and employees. The 2007 Equity Incentive Plan, as amended (the “2007 Plan”), provides for the grant of non-qualified and incentive stock options, as well as restricted stock units, restricted stock and other stock-based awards. Exercise prices for non-qualified and incentive stock options are not less than the fair value of the underlying common stock on the date of grant. Equity awards typically vest ratably, generally over four years for time-based restricted stock units (“RSUs”) and stock options and three years for performance-based restricted stock units (“PSUs”). Stock options generally expire ten years from the date of grant. As of September 30, 2021, the Company had the ability to grant stock-based awards with respect to an aggregate of 5.9 million shares of common stock under the 2007 Plan. In addition, the Company maintains an employee stock purchase plan (the “ESPP”) pursuant to which eligible employees may purchase shares of the Company’s common stock on the last day of each bi-annual offering period at a 15% discount from the lower of the closing market value on the first or last day of such offering period. The offering periods run from June 1 through November 30 and from December 1 through May 31 of each year.

During the three and nine months ended September 30, 2021 and 2020, the Company recorded and capitalized the following stock-based compensation expense:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021 (1)		2020 (2)		2021 (1)		2020 (2)
Stock-based compensation expense	$	28.1	$	24.1	$	98.0	$	99.0

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(1)For the three and nine months ended September 30, 2021, stock-based compensation expense consisted of $28.1 million and $98.0 million, respectively, included in selling, general, administrative and development expense.

(2)For the three and nine months ended September 30, 2020, stock-based compensation expense consisted of (i) $0.4 million and $1.4 million, respectively, included in Property costs of operations, (ii) $0.3 million and $0.9 million, respectively, included in Services costs of operations and (iii) $23.4 million and $96.7 million, respectively, included in selling, general, administrative and development expense. For the three and nine

months ended September 30, 2020, stock-based compensation expense capitalized as property and equipment was $0.4 million and $1.3 million, respectively.

Stock Options—As of September 30, 2021, there was no unrecognized compensation expense related to unvested stock options.

The Company’s option activity for the nine months ended September 30, 2021 was as follows (shares disclosed in full amounts):


						Number of Options
Outstanding as of January 1, 2021						2,016,261

Exercised						(629,515)
Forfeited						—
Expired						—
Outstanding as of September 30, 2021						1,386,746

Restricted Stock Units—As of September 30, 2021, total unrecognized compensation expense related to unvested RSUs granted under the 2007 Plan was $149.9 million and is expected to be recognized over a weighted average period of approximately two years. Vesting of RSUs is subject generally to the employee’s continued employment or death, disability or qualified retirement (each as defined in the applicable RSU award agreement).

Performance-Based Restricted Stock Units—During the nine months ended September 30, 2021, the Company’s Compensation Committee (the “Compensation Committee”) granted an aggregate of 98,694 PSUs (the “2021 PSUs”) to its executive officers and established the performance metrics for these awards. During the years ended December 31, 2020 and 2019, the Compensation Committee granted an aggregate of 110,925 PSUs (the “2020 PSUs”) and 114,823 PSUs (the “2019 PSUs”), respectively, to its executive officers and established the performance metrics for these awards. Threshold, target and maximum parameters were established for the metrics for a three-year performance period with respect to each of the 2021 PSUs, the 2020 PSUs and the 2019 PSUs and will be used to calculate the number of shares that will be issuable when each award vests, which may range from zero to 200% of the target amounts. At the end of each three-year performance period, the number of shares that vest will depend on the degree of achievement against the pre-established performance goals. PSUs will be paid out in common stock at the end of each performance period, subject generally to the executive’s continued employment or death, disability or qualified retirement (each as defined in the applicable PSU award agreement). PSUs will accrue dividend equivalents prior to vesting, which will be paid out only in respect of shares that actually vest.

Restricted Stock Units and Performance-Based Restricted Stock Units—The Company’s RSU and PSU activity for the nine months ended September 30, 2021 was as follows (shares disclosed in full amounts):


	RSUs	PSUs
Outstanding as of January 1, 2021 (1)	1,245,075	320,510
Granted (2)	546,698	98,694
Vested and Released (3)	(564,397)	(162,882)
Forfeited	(46,649)	—
Outstanding as of September 30, 2021	1,180,727	256,322
Vested and deferred as of September 30, 2021 (4)	17,121	—

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(1)PSUs consist of the target number of shares issuable at the end of the three-year performance period for the outstanding 2020 PSUs and the outstanding 2019 PSUs, or 70,739 and 86,889 shares, respectively, and the shares issuable at the end of the three-year performance period for the

PSUs granted in 2018 (the “2018 PSUs”) based on achievement against the performance metrics for the three-year performance period, or 162,882 shares.

(2)PSUs consist of the target number of shares issuable at the end of the three-year performance period for the 2021 PSUs, or 98,694 shares.

(3)This includes 58,204 and 96,048 of previously vested and deferred RSUs and PSUs, respectively. PSUs consist of shares vested pursuant to the 2018 PSUs. There are no additional shares to be earned related to the 2018 PSUs.

(4)Vested and deferred RSUs are related to deferred compensation for certain former employees.

During the three and nine months ended September 30, 2021, the Company recorded $6.8 million and $16.4 million, respectively, in stock-based compensation expense for equity awards in which the performance goals have been established and were probable of being achieved. The remaining unrecognized compensation expense related to these awards at September 30, 2021 was $7.5 million based on the Company’s current assessment of the probability of achieving the performance goals. The weighted average period over which the cost will be recognized is approximately two years.