Share-Based Compensation

6 Months Ended

Jun. 30, 2024

Share-Based Payment Arrangement [Abstract]

Our board of directors adopted, and our stockholders approved, the Invitation Homes Inc. 2017 Omnibus Incentive Plan (the “Omnibus Incentive Plan”) to provide a means through which to attract and retain key associates and to provide a means whereby our directors, officers, associates, consultants, and advisors can acquire and maintain an equity interest in us, or be paid incentive compensation, including incentive compensation measured by reference to the value of our common stock, and to align their interests with those of our stockholders. Under the Omnibus Incentive Plan, we may issue up to 16,000,000 shares of common stock.

Our share-based awards consist of restricted stock units (“RSUs”), which may be time vesting, performance based vesting, or market based vesting, and Outperformance Awards (defined below). Time-vesting RSUs are participating securities for earnings (loss) per share (“EPS”) purposes, and performance and market based RSUs (“PRSUs”) and Outperformance Awards are not. For a detailed discussion of RSUs and PRSUs issued prior to January 1, 2023, refer to our Annual Report on Form 10-K for the year ended December 31, 2023.

Share-Based Awards

The following summarizes our share-based award activity during the six months ended June 30, 2024.

Annual Long Term Incentive Plan (“LTIP”):

•Annual LTIP Awards Granted: During the six months ended June 30, 2024, we granted 807,140 RSUs pursuant to LTIP awards. Each award includes components which vest based on time-vesting conditions, market based vesting conditions, and performance based vesting conditions, each of which is subject to continued employment through the applicable vesting date.

LTIP time-vesting RSUs vest in three equal annual installments based on an anniversary date of March 1st. LTIP PRSUs may be earned based on the achievement of certain measures over a three year performance period. The number of PRSUs earned will be determined based on performance achieved during the performance period for each measure at certain threshold, target, or maximum levels and corresponding payout ranges. In general, the LTIP PRSUs are earned after the end of the performance period on the date on which the performance results are certified by our compensation and management development committee (the “Compensation Committee”).

All of the LTIP Awards are subject to certain change in control and retirement eligibility provisions that may impact these vesting schedules.

•PRSU Results: During the six months ended June 30, 2024, certain LTIP PRSUs vested and achieved performance in excess of the target level, resulting in the issuance of an additional 193,615 shares of common stock. Such awards are reflected as an increase in the number of awards granted and vested in the table below.

Other Award Activity

•Director Awards: During the six months ended June 30, 2024, we granted 47,970 time-vesting RSUs to members of our board of directors, which will fully vest on the date of INVH’s 2025 annual stockholders meeting, subject to continued service on the board of directors through such date.

Outperformance Awards

On May 1, 2019, the Compensation Committee approved equity based awards in the form of PRSUs and OP Units (the “2019 Outperformance Awards”). The 2019 Outperformance Awards included market based vesting conditions related to absolute and relative total shareholder returns (“TSRs”) over a three year performance period that ended on March 31, 2022. In April 2022, the absolute TSR and the relative TSR were separately calculated, and the Compensation Committee certified achievement of each at maximum achievement. The number of earned 2019 Outperformance Awards was then determined based on the earned dollar value of the awards (at maximum) and the stock price at the performance certification date, resulting in 311,425 earned PRSUs and 498,224 earned OP Units. Earned awards vested 50% on the certification date in April 2022, 25% vested on March 31, 2023, and the remaining 25% vested on March 31, 2024. The estimated fair value of 2019 Outperformance Awards that fully vested during the six months ended June 30, 2024 was an aggregate $2,808. The aggregate $12,160 grant-date fair value of the 2019 Outperformance Awards that were earned was determined based on Monte-Carlo option pricing models which estimated the probability of achievement of the TSR thresholds. The grant-date fair value was amortized ratably over each vesting period.

On April 1, 2022, the Compensation Committee granted equity based awards with market based vesting conditions in the form of PRSUs and OP Units (the “2022 Outperformance Awards” and together with the 2019 Outperformance Awards, the “Outperformance Awards”). The 2022 Outperformance Awards may be earned based on the achievement of rigorous absolute TSR and relative TSR return thresholds over a three year performance period ending March 31, 2025. The 2022 Outperformance Awards provide that upon completion of 75% of the performance period, or June 30, 2024 (the “Interim Measurement Date”), performance achieved as of the Interim Measurement Date was calculated consistent with the award terms. To the extent performance through the Interim Measurement Date resulted in a payout if the performance period had ended on that date, a minimum of 50% of such hypothetical payout amount is guaranteed as a minimum level payout for the full performance period, so long as certain minimum levels of relative TSR are achieved for the full performance period. As of the Interim Measurement Date, the relative TSR component of the 2022 Outperformance Awards was calculated at maximum achievement, while the absolute TSR component was below threshold. As such, overall performance as of the Interim Measurement Date results in a 50% payout of the 2022 Outperformance Awards, or a guaranteed minimum payout of 25% provided that certain minimum levels of relative TSR are achieved for the full performance period.

The final award achievement will be equal to the greater of the payouts determined based on the Interim Measurement Date and performance through March 31, 2025. Upon completion of the performance period, the dollar value of the awards earned under the absolute and relative TSR components will be separately calculated, and the number of earned 2022 Outperformance Awards will be determined based on the earned dollar value of the awards and the stock price at the performance certification date. Earned awards will vest 50% on the certification date and 50% on March 31, 2026, subject to continued employment. As of June 30, 2024, 2022 Outperformance Awards with an approximate aggregate $17,500 grant-date fair value have been issued and remain outstanding. The grant-date fair value was determined based on Monte-Carlo option pricing models which estimate the probability of achievement of the TSR thresholds, and it is amortized ratably over each vesting period.

Summary of Total Share-Based Awards

The following table summarizes activity related to non-vested time-vesting RSUs and PRSUs, other than Outperformance Awards, during the six months ended June 30, 2024:


	Time-Vesting Awards			PRSUs			Total Share-Based Awards(1)
	Number	Weighted Average Grant Date Fair Value (Actual $)		Number	Weighted Average Grant Date Fair Value (Actual $)		Number	Weighted Average Grant Date Fair Value (Actual $)












Balance, December 31, 2023	610,719	$	33.44	1,364,942	$	31.48	1,975,661	$	32.09
Granted	310,156	34.71		738,569	34.24		1,048,725	34.38
Vested(2)	(249,339)	(32.49)		(625,315)	(28.84)		(874,654)	(29.88)
Forfeited / canceled	(6,074)	(35.01)		(5,023)	(30.57)		(11,097)	(33.00)
Balance, June 30, 2024	665,462	$	34.38	1,473,173	$	33.99	2,138,635	$	34.11

(1)Total share-based awards excludes Outperformance Awards.

(2)All vested share-based awards are included in basic EPS for the periods after each award’s vesting date. The estimated aggregate fair value of share-based awards that fully vested during the six months ended June 30, 2024 was $27,541. During the six months ended June 30, 2024, 112 RSUs were accelerated pursuant to the terms and conditions of the Omnibus Incentive Plan and related award agreements.

Grant-Date Fair Values

The grant-date fair values of the time-vesting RSUs and PRSUs with performance condition vesting criteria are generally based on the closing price of our common stock on the grant date. However, the grant-date fair values for share-based awards with market condition vesting criteria are based on Monte-Carlo option pricing models. The following table summarizes the significant inputs utilized in these models for such awards granted or modified during the six months ended June 30, 2024:


						For the Six Months Ended June 30, 2024


Expected volatility(1)						20.7% — 24.6%
Risk-free rate						4.25%
Expected holding period (years)						2.83

(1)Expected volatility was estimated based on the historical volatility of INVH’s realized returns and of the applicable index.

Summary of Total Share-Based Compensation Expense

During the three and six months ended June 30, 2024 and 2023, we recognized share-based compensation expense as follows:


	For the Three Months Ended June 30,				For the Six Months Ended June 30,

	2024		2023		2024		2023
General and administrative	$	5,818	$	4,624	$	12,120	$	9,162
Property management expense	1,674		1,442		3,272		3,402
Total	$	7,492	$	6,066	$	15,392	$	12,564

As of June 30, 2024, there is $43,420 of unrecognized share-based compensation expense related to non-vested share-based awards which is expected to be recognized over a weighted average period of 1.91 years.