Equity-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2022

Share-Based Payment Arrangement [Abstract]

Summary of Equity-Based Compensation Plans with Grants Outstanding

During the second quarter of 2022, we issued 165,456 Options and 16,864 RSUs in a block grant to key management employees and Directors. Block grants are generally made once every four years. Option and RSU grants for the nine month period ended September 30, 2022 totaled 170,806 and 17,906, respectively, and were granted under the NVR, Inc. 2014 Equity Incentive Plan (the "2014 Plan") and the NVR, Inc. 2018 Equity Incentive Plan (the "2018 Plan") as follows:

Options Granted	2014 Plan	2018 Plan
Options - service-only (1)	55,655	32,331
Options - performance-based (2)	55,655	27,165
Total Options Granted	111,310	59,496
RSUs Granted
RSUs - service-only (3)	—	8,976
RSUs - performance-based (4)	—	8,930
Total RSUs Granted	—	17,906

(1)Of the 87,986 service-only Options granted, 69,361 Options will vest in 25% increments on December 31, 2024, 2025, 2026, and 2027; 16,415 Options will vest in 50% increments on December 31, 2026 and 2027; and the remaining 2,210 Options will vest in 50% increments on December 31, 2024 and 2025. Vesting for the Options is contingent solely upon continued employment or continued service as a Director.

(2)Of the 82,820 performance-based Options granted, 64,195 will vest in 25% increments on December 31, 2024, 2025, 2026, and 2027; 16,415 Options will vest in 50% increments on December 31, 2026 and 2027; and the remaining 2,210 Options will vest in 50% increments on December 31, 2024 and 2025. Vesting for the performance-based Options is contingent upon both continued employment and the Company's return on capital performance during 2022 through 2024.

(3)Of the 8,976 service-only RSUs granted, 5,215 will vest in 50% increments on December 31, 2024 and 2025; 3,119 RSUs will vest in 25% increments on December 31, 2024, 2025, 2026, and 2027; and the remaining 642 RSUs will vest in 50% increments on December 31, 2026 and 2027. Vesting for the RSUs is contingent solely upon continued employment.

(4)Of the 8,930 performance-based RSUs granted, 5,215 will vest in 50% increments on December 31, 2024 and 2025; 3,119 RSUs will vest in 25% increments on December 31, 2024, 2025, 2026, and 2027; and the remaining 596 RSUs will vest in 50% increments on December 31, 2026 and 2027. Vesting for the performance-based RSUs is contingent upon both continued employment and the Company's return on capital performance during 2022 through 2024.

Disclosure of Share-based Compensation Arrangements by Share-based Payment Award

The following table provides additional information relative to our equity-based compensation plans for the nine months ended September 30, 2022:

	Shares	Weighted Avg. Per Share Exercise Price		Weighted Avg. Remaining Contract Life (years)	Aggregate Intrinsic Value
Stock Options
Outstanding at December 31, 2021	534,695	$	2,424.62
Granted	170,806	4,481.92
Exercised	(59,559)	2,303.55
Forfeited	(12,126)	3,352.37
Outstanding at September 30, 2022	633,816	$	2,972.67	5.9	$	740,513
Exercisable at September 30, 2022	281,825	$	1,952.12	3.5	$	573,502
RSUs
Outstanding at December 31, 2021	16,564
Granted	17,906
Vested	—
Forfeited	(1,438)
Outstanding at September 30, 2022	33,032				$	131,701
Vested, but not issued at September 30, 2022	—				$	—

Schedule of Share-based Payment Award, Employee Stock Purchase Plan, Valuation Assumptions

The fair value of the Options granted during the first nine months of 2022 was estimated on the grant date using the Pricing Model, based on the following assumptions:  

Estimated option life (years)	5.60
Risk free interest rate (range)	1.17%-3.40%
Expected volatility (range)	24.93%-30.89%
Expected dividend rate	—%
Weighted average grant-date fair value per share of options granted	$	1,432.72