STOCK-BASED COMPENSATION

12 Months Ended

Dec. 31, 2023

Share-Based Payment Arrangement [Abstract]

Description of equity plan

Vimeo currently has one active equity plan, the Vimeo, Inc. 2021 Stock and Annual Incentive Plan (including an Israeli Appendix), amended and restated as of June 6, 2023 (the "2021 Plan"), which was adopted in connection with the Spin-off. The 2021 Plan replaced the Vimeo, LLC 2012 Incentive Plan, the Vimeo, Inc. 2017 Incentive Plan and the Vimeo, Inc. 2019 Incentive Plan (including an Israeli Appendix), collectively referred to as the “Prior Plans.” The Prior Plans were automatically terminated and replaced and superseded by the 2021 Plan upon the completion of the Spin-off. Any and all awards granted under the Prior Plans, remain in effect on their pre Spin-off terms pursuant to the 2021 Plan, subject to adjustment in connection with the Spin-off and the Vimeo Merger. The 2021 Plan also covers Vimeo stock options that were granted as a result of vested IAC stock options in connection with the Spin-off.

The 2021 Plan authorizes the Company to deliver equity awards to its employees, officers, directors and consultants covering an aggregate of up to 20.0 million shares of the Company's common stock (in addition to previously-awarded shares). At December 31, 2023, there were 16.1 million shares available for delivery under the 2021 Plan.

Equity awards provided for in the 2021 Plan include SARs, stock options, RSUs, and other stock-based awards related to shares of Vimeo common stock. The exercise price of stock options and SARs cannot be less than the market value of Vimeo common stock on the grant date. In connection with the settlement of stock-based awards, shares of Vimeo common stock may be issued either from authorized but unissued shares or from treasury stock. SARs and stock options issued to date generally vest three years from the grant date or in equal annual installments over a three or four‑year period. RSUs issued to date generally vest either one year or three years from the grant date or in equal annual installments over a three-year period.

Stock-based compensation expense

Vimeo recorded stock-based compensation expense of $12.0 million, $64.3 million, and $44.9 million for the years ended December 31, 2023, 2022, and 2021, respectively. No income tax benefit was recognized in the accompanying consolidated statement of operations for the years ended December 31, 2023, 2022, and 2021 related to equity awards because Vimeo has recorded a full valuation allowance against the related deferred tax asset. At December 31, 2023, there was $43.0 million of unrecognized compensation cost, net of estimated forfeitures, related to equity awards, which is expected to be recognized over a weighted-average period of 1.8 years.

Stock appreciation rights and stock options

The weighted average grant date fair value of SARs and stock options granted during the year ended December 31, 2023 was $1.87. The key assumptions in determining the grant date fair value included the expected volatility of 52.0%, risk-free interest rate of 3.6%, expected term of 6.5 years, and dividend yield of 0%. There were no SARs or stock options granted during the years ended December 31, 2022 and 2021.

The table below summarizes information about SARs and stock options exercised:


	Years Ended December 31,
	2023		2022		2021







	(In thousands)
Intrinsic value	$	157	$	1,427	$	49,383
Cash received	$	759	$	18	$	3,364

SAR and stock option activity for the year ended December 31, 2023 is as follows:


	SARs and stock options	Weighted average exercise price		Weighted average remaining contractual term in years	Aggregate intrinsic value
	(Shares and intrinsic value in thousands)





Outstanding at December 31, 2022	15,227	$	5.82

Granted	250	4.00
Exercised	(275)	2.75
Forfeited	(210)	11.74
Expired	(2,638)	6.63
Outstanding at December 31, 2023(a)	12,354	5.58		3.6	874
Exercisable at December 31, 2023(a)	11,847	$	5.53	3.5	$	874

_____________________

(a) Includes 4.5 million outstanding and exercisable stock options at December 31, 2023 which relate solely to the conversion of vested IAC stock options into Vimeo stock options in connection with the Spin-off as more fully described in "Note 1—Organization and Basis of Presentation.

As of December 31, 2023, the number, weighted-average exercise price, weighted-average remaining contractual term, and aggregate intrinsic value of Vimeo SARs and stock options that either had vested or are expected to vest approximate the corresponding amounts for Vimeo SARs and stock options outstanding.

Restricted stock units

The table below summarizes the weighted average grant date fair value of RSUs granted, the weighted-average assumptions used to determine the grant date fair value of RSUs subject to market-based conditions, and the intrinsic value of RSUs that vested.


	Years Ended December 31,
	2023			2022			2021(a)
Weighted average grant date fair value of RSUs granted:
Service based	$	3.67		$	8.24		$	30.89
Market based	5.80			7.25			—
Total RSUs	$	4.11		$	8.17		$	30.89

Assumptions for RSUs granted with market based conditions:
Volatility	57.2		%	47.0		%	—
Risk free rate	4.5		%	2.5		%	—
Dividend yield	0		%	0		%	—

Other Information (In thousands):
Intrinsic value of RSUs that vested	$	15,960		$	3,133		$	49

_____________________

(a) There were no RSUs with market based conditions granted in the year ended December 31, 2021.

RSU activity for the year ended December 31, 2023 is as follows:


	Number of Shares	Weighted Average Grant Date Fair Value
	(Shares in thousands)





Unvested at December 31, 2022	15,934	$	11.80
Granted	5,875	4.11
Vested	(4,111)	12.06
Forfeited	(5,152)	12.22
Unvested at December 31, 2023(a)	12,546	$	7.95

_____________________

(a) Includes 0.5 million RSUs subject to market-based conditions.

Modifications

In connection with executive and Board turnover, the Company has modified certain equity awards resulting in a net benefit to stock-based compensation expense of $16.5 million and $4.4 million in the years ended December 31, 2023 and 2022, respectively, which was primarily a result of lower stock prices on the applicable modification dates as compared to the original grant date.

In connection with the Spin-off, the Company modified certain equity awards resulting in a modification charge of $14.0 million, which is recognized, net of forfeitures, over the remaining requisite service period of the modified awards. As a result, the Company recognized incremental stock-based compensation expense of $0.3 million, $1.2 million and $9.5 million in the years ended December 31, 2023, 2022 and 2021, respectively.