Employee Incentive Plans

6 Months Ended

Jun. 30, 2020

The Company’s 2014 Equity Incentive Plan (EIP) provides for granting awards, including restricted stock units (RSUs), performance-based restricted stock units (PBRSUs) and stock options to employees, officers and directors.

Stock-based Compensation

Stock-based compensation expense was as follows for the periods presented:



	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
RSUs and PBRSUs	$	13,975	$	19,859	$	31,681	$	37,044
Stock options	229		560		652		1,275
ESPP	—		132		—		484
Total stock-based compensation expense	$	14,204	$	20,551	$	32,333	$	38,803

The following table presents the Company’s stock-based compensation expense recorded in the Condensed Consolidated Statements of Operations:



	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Sales and marketing	$	731	$	1,540	$	2,394	$	3,111
Origination and servicing	722		846		1,358		1,770
Engineering and product development	2,668		5,475		7,283		10,706
Other general and administrative	10,083		12,690		21,298		23,216
Total stock-based compensation expense	$	14,204	$	20,551	$	32,333	$	38,803

The Company capitalized $1.3 million and $2.9 million of stock-based compensation expense associated with developing software for internal use during the second quarter and first half of 2020, respectively. The Company capitalized $1.7 million and $3.6 million of stock-based compensation expense associated with developing software for internal use during the second quarter and first half of 2019, respectively.

Restricted Stock Units

The following table summarizes the activities for the Company’s RSUs during the first half of 2020:



	Number of Units		Weighted- Average Grant Date Fair Value
Unvested at December 31, 2019	9,597,404		$	16.78
Granted	10,047,445		$	9.56
Vested	(2,048,657	)	$	16.95
Forfeited/expired	(3,917,787	)	$	13.86
Unvested at June 30, 2020	13,678,405		$	12.29

During the first half of 2020, the Company granted 10,047,445 RSUs with an aggregate fair value of $96.1 million.

As of June 30, 2020, there was $159.2 million of unrecognized compensation cost related to unvested RSUs, which is expected to be recognized over the next 3.1 years.

Performance-based Restricted Stock Units

PBRSUs are equity awards that are earned, and eligible for time-based vesting, based upon the achievement of certain pre-established performance metrics over a specific performance period. Depending on the level of achievement of the pre-established performance targets, the PBRSUs earned and eligible for time-based vesting can range from 0% to 200% of the target amount. PBRSUs granted under the Company’s EIP generally have a one-year performance period with the earned shares, if any, vesting over an additional approximately two-year period. Over the performance period, the number of PBRSUs that may be earned and the related stock-based compensation expense that is recognized is adjusted upward or downward based upon the probability of achieving the pre-established performance metrics.

The following table summarizes the activities for the Company’s PBRSUs during the first half of 2020:



	Number of Units		Weighted- Average Grant Date Fair Value
Unvested at December 31, 2019	471,589		$	16.94
Vested	(102,905	)	$	18.06
Forfeited/expired ⁽¹⁾	(203,400	)	$	16.70
Unvested at June 30, 2020	165,284		$	16.24


⁽¹⁾	Primarily relates to the portion of PBRSUs granted in 2018 and 2019 that were unearned as a result of not achieving certain pre-established performance metrics during the performance period.

For the second quarter and first half of 2020, the Company recognized $0.3 million and $1.1 million in stock-based compensation expense related to PBRSUs, respectively. For the second quarter and first half of 2019, the Company recognized $1.6 million and $2.5 million in stock-based compensation expense related to PBRSUs, respectively.

As of June 30, 2020, there was $1.0 million of unrecognized compensation cost related to unvested PBRSUs, which is expected to be recognized over the next 1.2 years.

Employee Stock Purchase Plan

In connection with the Company’s cost structure simplification efforts, future purchases through the Company’s employee stock purchase plan (ESPP) were suspended effective upon the completion of the most recent offering period on May 10, 2019.