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Stock-Based Compensation
6 Months Ended
Jun. 30, 2023
Share-Based Payment Arrangement [Abstract]  
Stock-Based Compensation Disclosures STOCK-BASED COMPENSATION
Non-performance Based Restricted Stock Units
The following table summarizes the activity of our time-vested restricted stock units (“RSUs”):
Six Months Ended June 30,
20232022
SharesWeighted Average Grant Date Fair ValueSharesWeighted Average Grant Date Fair Value
Beginning balance 146,239 $100.93 117,874 $80.85 
   Granted38,165 $105.37 37,159 $118.34 
   Vested(44,189)$64.70 (40,100)$57.03 
   Forfeited(2,647)$113.57 (1,151)$87.20 
Ending balance137,568 $113.56 113,782 $101.42 
We recognized $1.3 million and $1.1 million of stock-based compensation expense related to outstanding RSUs for the three months ended June 30, 2023 and 2022, respectively. We recognized $2.4 million and $1.9 million of stock-based compensation expense related to outstanding RSUs for the six months ended June 30, 2023 and 2022, respectively. Generally, the RSUs cliff vest on the third anniversary of the grant date and can only be settled in shares of our common stock. At June 30, 2023, we had unrecognized compensation cost of $9.5 million related to unvested RSUs, which is expected to be recognized over a weighted average period of 2.2 years.
Performance-Based Restricted Stock Units
The Compensation Committee of the Board has granted awards of performance-based RSUs (“PSUs”) under the Amended and Restated LGI Homes, Inc. 2013 Equity Incentive Plan to certain members of senior management based on three-year performance cycles. The PSUs provide for shares of our common stock to be issued based on the attainment of certain performance metrics over the applicable three-year periods. The number of shares of our common stock that may be issued to the recipients for the PSUs range from 0% to 200% of the target amount depending on actual results as compared to the target performance metrics. The terms of the PSUs provide that the payouts will be capped at 100% of the target number of PSUs granted if absolute total stockholder return is negative during the performance period, regardless of EPS performance; this market condition applies for amounts recorded above target. The compensation expense associated with the PSU grants is
determined using the derived grant date fair value, based on a third-party valuation analysis, and expensed over the applicable period. The PSUs vest upon the determination date for the actual results at the end of the three-year period and require that the recipients continue to be employed by us through the determination date. The PSUs can only be settled in shares of our common stock.
The following table summarizes the activity of our PSUs for the six months ended June 30, 2023:
Period GrantedPerformance PeriodTarget PSUs Outstanding at December 31, 2022Target PSUs GrantedTarget PSUs ForfeitedTarget PSUs VestedTarget PSUs Outstanding at June 30, 2023Weighted Average Grant Date Fair Value
20202020 - 202284,435 — — (84,435)— $59.81 
2021 2021 - 202344,011 — (852)— 43,159 $141.00 
20222022 - 202464,382 — (1,078)— 63,304 $118.80 
20232023 - 2025— 72,443 — — 72,443 $104.36 
Total192,828 72,443 (1,930)(84,435)178,906 
At June 30, 2023, management estimates that the recipients will receive approximately 120.8%, 50.0% and 74.5% of the 2023, 2022 and 2021 target number of PSUs, respectively, at the end of the applicable three-year performance cycle based on projected performance compared to the target performance metrics. We recognized $0.7 million and $2.2 million of total stock-based compensation expense related to outstanding PSUs for the three months ended June 30, 2023 and 2022, respectively. We recognized $2.3 million and $4.5 million of total stock-based compensation expense related to outstanding PSUs for the six months ended June 30, 2023 and 2022, respectively. The 2020 - 2022 performance period PSUs vested and issued on February 27, 2023 at 200% of the target number. At June 30, 2023, we had unrecognized compensation cost of $11.0 million, based on the probable amount, related to unvested PSUs, which is expected to be recognized over a weighted average period of 2.3 years.