Stock Based Compensation

9 Months Ended

Sep. 30, 2021

Share-based Payment Arrangement [Abstract]

The following table sets forth the components of our stock-based compensation and expected tax benefit for the three and nine months ended September 30, 2021 and 2020 related to the plans in effect during the respective period:


	Three months ended September 30,				Nine months ended September 30,
Stock-based compensation expense:	2021		2020		2021		2020
Restricted stock and restricted stock units	$	5.3	$	1.0	$	12.9	$	1.0
Stock options	1.0		1.7		2.1		21.7
Incentive units	2.7		7.0		8.7		15.9
Total compensation expense	$	9.0	$	9.7	$	23.7	$	38.6

Expected tax benefit:
Restricted stock and restricted stock units	$	0.9	$	0.7	$	2.2	$	0.7
Stock options	0.1		5.6		(0.2)		5.6
Total expected tax benefit	$	1.0	$	6.3	$	2.0	$	6.3

On June 30, 2020, in connection with our IPO, certain directors were granted 4,160,000 options to purchase shares of common stock of Dun & Bradstreet Holdings, Inc. at $22.00 per share, which were vested immediately. In addition, 3,840,000 stock options were granted to certain executives which will vest ratably over three years, commencing on the first anniversary of the grant date. All stock options expire seven years from the date of the grant. Total compensation expense of $39.9 million associated with these grants is recognized ratably over the three-year vesting period. We estimated the option fair value at the date of grant using Black-Scholes valuation model. The assumptions are set forth in the following table:


Weighted average assumptions
Weighted average expected stock price volatility	28	%
Weighted average expected dividend yield	0.0	%
Weighted average expected life of option (in years)	3.98
Weighted average risk-free interest rate	0.23	%
Weighted average black scholes value	$4.99
Weighted average exercise price	$22.00

Expected stock price volatility was derived from the historical volatility of companies in our peer group. The risk-free interest rate assumption corresponds to the time to liquidity assumption and was based on the U.S. Treasury yield curve in effect on each grant date.

The following table summarizes the restricted stock and restricted stock units granted in 2021:


Date	Number of shares granted	Grant date fair value per share	Vesting period (in years)	Vesting criteria
Restricted Stock & RSU's: (1)
February 11, 2021	65,790	$22.80	2.4	Service
March 10, 2021	67,021	$22.01	1.0	Service
March 10, 2021 (2)	2,203,390	$22.01	3.0	Service & Performance
March 31, 2021	13,440	$23.81	3.0	Service
June 30, 2021	329,904	$21.37	3.0	Service
August 4, 2021	6,607	$18.92	1.0	Service
September 30, 2021 (2)	224,886	$16.81	3.0	Service & Performance
September 30, 2021	116,004	$16.81	3.0	Service

(1)Employee awards generally vest ratably over three years and director awards vest 100% after one year.

(2)These awards are also subject to an annual performance target. Vesting of these awards are dependent on the satisfaction of the annual performance target.

We accounted for stock-based compensation based on grant date fair value. For restricted stock, grant date fair value was based on the closing price of our stock on the date of grant.

The following tables summarize the restricted stock, restricted stock units and stock options activity in 2021:


	Restricted stock & Restricted stock units
	Number of shares	Weighted-average grant date fair value	Weighted-average remaining contractual term (in years)	Aggregate intrinsic value (in millions)
Balances, January 1, 2021	702,899	$25.95	1.3	$17.5
Granted	3,027,042	$21.37
Forfeited	(659,970)	$23.03
Vested	(267,034)	$25.70
Balances, September 30, 2021	2,802,937	$21.72	1.5	$47.1


	Stock options
	Number of options	Weighted-average exercise price	Weighted-average remaining contractual term (in years)	Aggregate intrinsic value (in millions)
Balances, January 1, 2021	7,650,000	$22.00	6.5	$22.2
Granted	—	$—
Forfeited	(1,211,667)	$22.00
Vested	—	$—
Balances, September 30, 2021	6,438,333	$22.00	5.7	$0.0

The following table sets forth the unrecognized equity-based compensation cost as of September 30, 2021:


Equity-based compensation:	Unrecognized compensation		Weighted-average amortization period (in years)
Restricted stock & Restricted stock units	$	49.6	2.4
Stock options	6.7		0.5
Incentive units	5.3		0.5
Total unrecognized compensation expense	$	61.6	1.4

Employee Stock Purchase Plan ("ESPP")

Effective December 2020, we adopted the Dun & Bradstreet Holdings, Inc. Employee Stock Purchase Plan that allows eligible employees to voluntarily make after-tax contributions ranging from 3% to 15% of eligible earnings. The Company contributes varying matching amounts to employees, as specified in the plan document, after a one year holding period. During the holding period, ESPP purchased shares are not eligible for sale or broker transfer. The first purchases for this program started in January 2021. We recorded the associated expense of approximately $1 million and $4 million for the three and nine months ended September 30, 2021, respectively.