Stock-Based Compensation

12 Months Ended

Dec. 31, 2021

Share-based Payment Arrangement [Abstract]


13. Stock-based Compensation

Employee stock-based compensation plans

Under the 2016 Equity and Incentive Compensation Plan Amended and Restated as of June 10, 2021 (the "2016 Equity Plan"), we may grant incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock, restricted stock units, other stock awards and cash incentive awards to employees, directors and consultants. Our Compensation Committee of the Board of Directors administers this plan and the stock-based awards are granted under terms determined by it.

The total number of authorized stock-based awards available under our plan was 3,500,423 as of December 31, 2021. We issue common stock from our pool of authorized stock upon exercise of stock options and stock appreciation rights, vesting of restricted stock units or upon granting of restricted stock.

Historically, we have issued four types of awards under our plans: restricted stock awards, restricted stock units, stock options and stock appreciation rights ("SARs"). There have been no new stock options or SARs granted since 2005 and 2013, respectively. The following table sets forth the number of awards outstanding for each award type as of:


	Outstanding at December 31,
Award type	2021	2020
Restricted stock awards	1,192,810	1,277,109
Restricted stock units	1,279,270	1,170,885

Options and SARs granted under the 2016 Equity Plan have a 10-year contractual term. Awards granted to our executive officers and certain members of management are subject to accelerated vesting upon a change in control as defined in the employees’ retention agreement.

Expense recognition

We recognize compensation expense associated with stock options and awards with performance or market based vesting conditions on an accelerated basis over the requisite service period of the individual grantees, which generally equals the vesting period. We recognize compensation expense associated with restricted stock awards and SARs on a straight-line basis over the requisite service period of the individual grantees, which generally equals the vesting period. We recognize the effect of awards for which the requisite service period is not rendered when the award is forfeited (that is, we recognize the effect of forfeitures in compensation cost when they occur). Previously recognized compensation cost for an award is reversed in the period that the award is forfeited.

Stock-based compensation expense is allocated to cost of revenue and operating expenses on the consolidated statements of comprehensive income based on where the associated employee’s compensation is recorded. The following table summarizes stock-based compensation expense:


	Years ended December 31,
(in thousands)	2021		2020		2019
Included in cost of revenue:
Cost of recurring	$	12,405	$	5,793	$	1,879
Cost of one-time services and other	7,547		7,581		1,487
Total included in cost of revenue	19,952		13,374		3,366
Included in operating expenses:
Sales, marketing and customer success	20,283		15,514		11,203
Research and development	27,080		18,527		11,115
General and administrative	53,064		39,842		32,949
Total included in operating expenses	100,427		73,883		55,267
Total stock-based compensation expense	$	120,379	$	87,257	$	58,633

The total amount of compensation cost related to unvested awards not recognized was $97.8 million at December 31, 2021. It is expected that this amount will be recognized over a weighted average period of 1.3 years.

Restricted stock awards

We have granted shares of common stock subject to certain restrictions under the 2016 Equity Plan. Restricted stock awards granted to employees vest in equal annual installments generally over 3 years from the grant date subject to the recipient’s continued employment with us. Restricted stock awards granted to non-employee directors vest after one year from the date of grant or, if earlier, immediately prior to the next annual election of directors, provided the non-employee director is serving as a director at that time. The fair market value of the stock at the time of the grant is amortized on a straight-line basis to expense over the period of vesting. Recipients of restricted stock awards have the right to vote such shares and receive dividends, if declared.

The following table summarizes our unvested restricted stock awards as of December 31, 2021, and changes during the year then ended:


Restricted stock awards	Restricted stock awards	Weighted average grant-date fair value		Aggregate intrinsic value(1) (in thousands)
Unvested at January 1, 2021	1,277,109	$	79.54
Granted	596,763	77.39
Vested	(486,342)	79.21
Forfeited	(194,720)	78.67
Unvested at December 31, 2021	1,192,810	78.73		$	94,208

(1)The intrinsic value is calculated as the market value as of the end of the fiscal period.

The total fair value of restricted stock awards that vested during the years ended December 31, 2021, 2020 and 2019 was $38.5 million, $39.9 million and $37.5 million, respectively. The weighted average grant-date fair value of restricted stock awards granted during the years ended December 31, 2020 and 2019 was $77.16 and $78.39, respectively.

Restricted stock units

We have also granted restricted stock units subject to certain restrictions under the 2016 Equity Plan. Restricted stock units granted to employees vest in equal annual installments generally over 3 years from the grant date subject to the recipient’s continued employment with us. We have also granted restricted stock units for which vesting is subject to meeting certain performance and/or market conditions. Restricted stock units granted with a market condition had a fair market value assigned at the grant date based on the use of a Monte Carlo simulation model. The fair market value of the stock at the time of the grant is amortized to expense on a straight-line basis over the period of vesting except for awards with market or performance conditions, which are amortized on an accelerated basis over the period of vesting.

The following table summarizes our unvested restricted stock units as of December 31, 2021, and changes during the year then ended:


Restricted stock units	Restricted stock units	Weighted average grant-date fair value		Aggregate intrinsic value(1) (in thousands)
Unvested at January 1, 2021	1,170,885	$	63.62
Granted	1,126,266	73.47
Forfeited	(110,722)	66.11

Vested	(907,159)	59.83
Unvested at December 31, 2021	1,279,270	74.77		$	101,037

(1)The intrinsic value is calculated as the market value as of the end of the fiscal period.

The total fair value of restricted stock units that vested during the years ended December 31, 2021, 2020 and 2019 was $54.3 million, $18.9 million, and $19.2 million, respectively. The weighted average grant date fair value of restricted stock units granted for the years ended December 31, 2020 and 2019 was $59.59 and $77.90, respectively.

Stock appreciation rights

All SARs previously granted were fully vested as of December 31, 2017. There were no SARs exercised during 2021 and 2020. The total intrinsic value of SARs exercised during the year ended December 31, 2019 was $3.6 million. SARs granted with a market condition had a fair market value assigned at the grant date based on the use of a Monte Carlo simulation model. All other SARs granted had a fair market value assigned at the grant date based on the use of the Black-Scholes option pricing model.