Equity Incentive Plans

6 Months Ended

Jun. 30, 2023

Share-Based Payment Arrangement [Abstract]

On June 2, 2022, the Company’s stockholders approved the adoption of the Granite Point Mortgage Trust Inc. 2022 Omnibus Incentive Plan, or the 2022 Plan. The 2022 Plan permits the granting of stock options, stock appreciation rights, restricted stock, restricted stock units (both non-performance-based, or RSUs, and performance-based, or PSUs), dividend equivalent rights, other stock-based awards and other cash-based awards to employees, certain consultants of the Company and members of the board of directors. As of June 30, 2023, the Company had 7,182,964 shares of common stock available for future issuance under the 2022 Plan.

With the adoption of the 2022 Plan, no new equity awards may be granted under the Granite Point Mortgage Trust Inc. 2017 Equity Incentive Plan, or the 2017 Plan, but previously granted RSUs and PSUs remain outstanding under the 2017 Plan. As of June 30, 2023, the Company had 1,650,317 shares of common stock available for future issuance under the 2017 Plan.

The Company accounts for equity-based awards under ASC 718 - Compensation - Stock Compensation, which requires the Company to expense the cost of services received in exchange for equity-based awards based on the grant-date fair value of the awards. This expense is recognized ratably over the requisite service period following the date of grant. The fair value of awards of the Company’s RSUs is typically equivalent to the closing stock price on the grant date. The unrecognized

compensation cost relating to such awards is recognized as an expense over the awards’ remaining vesting periods.

For the six months ended June 30, 2023, the Company recognized the remaining $47.5 thousand of compensation expense associated with awards of restricted stock, compared to $0.1 million and $0.4 million for the three and six months ended June 30, 2022, respectively, within compensation and benefits expense on the condensed consolidated statements of income. No compensation expense associated with awards of restricted stock were recognized during the three months ended June 30, 2023. As of June 30, 2023, all awards of restricted stock had vested.

As of June 30, 2023, there was $8.8 million of total unrecognized compensation cost for awards of RSUs that will be recognized over the grants’ remaining weighted average vesting period of 0.9 years. For the three and six months ended June 30, 2023, the Company recognized $1.7 million and $3.2 million of compensation expense associated with these awards, respectively, compared to $1.5 million and $2.8 million for the three and six months ended June 30, 2022, respectively, within compensation and benefits expense on the condensed consolidated statements of income.

Awards of PSUs have a three-year cliff vesting with the number of performance-based stock units vesting at the end of the three-year period based upon the Company’s performance with respect to metrics set in the applicable award agreements. Between 0% and 200% of the target number of units granted in early 2021 and 2022 may vest at the end of their respective performance periods based (i) 50% against the predetermined internal Company performance goal for “core” return on average equity, or ROAE and (ii) 50% against the Company’s performance ranking for “core” ROAE among a peer group of commercial mortgage REIT companies. Between 0% and 200% of the target number of units granted in March 2023 may vest at the end of the performance period based (i) 25% against the predetermined internal Company performance goal “run-rate” ROAE, (ii) 25% against the Company’s performance ranking for “run-rate” ROAE among a peer group of commercial mortgage REIT companies, (iii) 25% against the predetermined internal Company performance goal for change in book value per share, and (iv) 25% against the Company’s performance ranking for change in book value per share among a peer group of commercial mortgage REIT companies. The commercial mortgage REIT peer group used to measure relative “core” ROAE, “run-rate” ROAE and change in book value per share includes publicly traded commercial mortgage REITs, which the Company believes derive the majority of their revenues from commercial real estate balance sheet lending activities and meet certain market capitalization criteria.

As of June 30, 2023, there was $4.7 million of total unrecognized compensation cost for awards of PSUs that will be recognized over the grants’ remaining weighted average vesting period of 1.1 years. For the three and six months ended June 30, 2023, the Company recognized $0.7 million and $1.1 million of compensation expense associated with these awards, respectively, compared to $0.2 million and $0.9 million for the three and six months ended June 30, 2022, respectively, within compensation and benefits expenses on the condensed consolidated statements of income.

The following table summarizes the grants, vesting and forfeitures of restricted stock, RSUs and PSUs for the three and six months ended June 30, 2023:


	Restricted Stock	RSUs	PSUs	Weighted Average Grant Date Fair Market Value
















Outstanding at December 31, 2022	92,585	1,238,439	660,434	11.83
Granted	—	1,095,521	734,223	5.04
Vested	(92,585)	(213,304)	—	13.05
Forfeited	—	(114,306)	—	10.84
Outstanding at March 31, 2023	—	2,006,350	1,394,657	8.1
Granted	—	159,561	—	4.81
Vested	—	(51,802)	—	10.32
Forfeited	—	(15,234)	—	11.06
Outstanding at June 30, 2023	—	2,098,875	1,394,657	7.9

Below is a summary of restricted stock, RSU and PSU vesting dates as of June 30, 2023:


Vesting Year	Restricted Stock	RSUs	PSUs	Total Awards
2023	—	—	347,896	347,896
2024	—	849,974	312,538	1,162,512
2025	—	886,100	734,223	1,620,323
2026	—	362,801	—	362,801
Total	—	2,098,875	1,394,657	3,493,532