Stock-based Compensation

12 Months Ended

Dec. 31, 2019

Share-based Payment Arrangement [Abstract]

Stock-based Compensation

KREF is externally managed by the Manager and does not currently have any employees. However, as of December 31, 2019, the Manager, certain individuals employed by the Manager and affiliates of the Manager, and certain members of KREF's board of directors were compensated, in part, through the issuance of stock-based awards.

As of December 31, 2019, KREF had restricted stock unit (“RSU”) awards outstanding under the KKR Real Estate Finance Trust Inc. 2016 Omnibus Incentive Plan that was adopted on February 12, 2016 and amended and restated on November 17, 2016 (the "Incentive Plan") to certain members of KREF’s board of directors and employees of the Manager or its affiliates, none of whom are KREF employees. RSUs awarded to employees of the Manager or its affiliates, generally vest over three consecutive one-year periods and awards to certain members of KREF's board of directors vest over a one-year period, pursuant to the terms of the respective award agreements and the terms of the Incentive Plan. RSU awards are not entitled to dividends until KREF issues shares of its common stock, which are issuable on a one-to-one basis upon the RSU award vesting.

The following table summarizes the activity in KREF’s outstanding RSUs and the weighted-average grant date fair value per RSU:



	Restricted Stock Units		Weighted Average Grant Date Fair Value Per RSU^(A)
Unvested as of December 31, 2018	459,179		$	19.33
Granted	362,832		20.64
Vested	(175,566	)	19.49
Forfeited/ cancelled	(5,231	)	19.68
Unvested as of December 31, 2019	641,214		$	20.02


(A)	The grant-date fair value is based upon the last sale price of KREF’s common stock at the date of grant.

KREF expects the unvested RSUs outstanding to vest during the following years:



Year		Restricted Stock Units
2020		292,165
2021		232,383
2022		116,666
Total		641,214

Upon adoption of ASU No. 2018-07 in June 2018, KREF recognizes the compensation cost of RSUs awarded to employees of the Manager, or one or more of its affiliates, on a straight-line basis over the awards’ term at their grant date fair value, consistent with the RSUs awarded to certain members of KREF's board of directors.

During the years ended December 31, 2019, 2018 and 2017, KREF recognized $4.0 million, $2.0 million and $0.1 million, respectively, of stock-based compensation expense included in “General and administrative” expense in the Consolidated Statements of Income. As of December 31, 2019, there was $11.3 million of total unrecognized stock-based compensation expense related to unvested share-based compensation arrangements. This cost is expected to be recognized over a weighted average period of 1.3 years.

During the year ended December 31, 2019, KREF delivered 103,175 shares of common stock for 175,566 vested RSUs. Upon any payment of shares as a result of restricted stock unit vesting, the related tax withholding obligation will generally be satisfied by KREF, reducing the number of shares to be delivered by a number of shares necessary to satisfy the related applicable tax withholding obligation. The amount results in a cash payment related to this tax liability and a corresponding adjustment to additional paid in capital in the Consolidated Statement of Changes in Stockholders' Equity. The adjustment was $1.4 million for the year ended December 31, 2019, and is included as a reduction of capital related to the Company's equity incentive plan in the Consolidated Statement of Changes in Stockholders' Equity.

Refer to Note 12 for additional information regarding the Incentive Plan.