Stock-based Compensation |
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| Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based Compensation | Stock-based Compensation 2020 Equity Plan
On December 21, 2020, the stockholders of the Company approved the 2020 Equity Incentive Plan (the "2020 Equity Plan”), authorizing 26,898,554 common shares to be reserved for issuance of stock options, restricted stock units awards ("RSU") and other stock awards. Under the 2020 Equity Plan, employees are compensated through various forms of equity, including RSUs. Each RSU represents a contingent right to receive one share of the Company’s common stock. Performance stock unit awards ("PSU") represent the right to receive a share of the Company’s common stock if service, performance, and market conditions, or a combination thereof, are satisfied over a defined period.
For the year ended December 31, 2022, 15,340,195 RSUs and 4,728,318 PSUs were granted under the 2020 Equity Plan. For the year ended December 31, 2021, 13,640,895 RSUs and 10,034,279 PSUs were granted under the 2020 Equity Plan.
Restricted Stock Awards
From November 4, 2018 to May 6, 2019, Canoo Holdings Ltd. sold restricted shares to the founders, which include certain investors, subject to certain vesting conditions. The vesting conditions were amended on December 18, 2020, of which the time-based portion was amended with cliff vesting on March 18, 2020 with the remaining shares vesting over 36 months thereafter. The compensation expense recognized for the restricted stock awards was $4.0 million and $10.9 million for the years ended December 31, 2022 and 2021, respectively.
Restricted Stock Units
The Company granted RSUs throughout 2022 and 2021 to compensate existing employees and attract top talent, primarily subject to time-based vesting. During the year ended December 31, 2021, 998,994 RSUs granted vested immediately and the remainder granted vest over the subsequent four years.
On May 14, 2021, the Company awarded 500,000 RSUs to the Executive Chair and Chief Executive Officer. The RSUs vest in one-third increments on the first, second, and third anniversaries of the vesting commencement date, December 21, 2020, subject to continuous service.
The total fair value of restricted stock units granted during the years ended December 31, 2022 and 2021, were $56.9 million and $133.6 million, respectively.
Performance-Based Restricted Stock Units
PSUs represent the right to receive a share of Common Stock if service, performance, and market conditions, or a combination thereof, are met over a defined period. PSUs that contain a market condition, such as stock price milestones, are subject to a Monte-Carlo simulation model to determine the grant date fair value by simulating a range of possible future stock prices for the Company over the performance period. The grant date fair value of the market condition PSUs is recognized as compensation expense over the greater of the Monte Carlo simulation model’s derived service period and the arrangement’s explicit service period, assuming both conditions must be met.
PSUs subject to performance conditions, such as operational milestones, are measured on the grant date, the total fair value of which is calculated as the product of the number of PSUs and the grant date stock price. Compensation expense for PSUs with a performance condition is recorded each period based upon a probability assessment of the expected outcome of the performance metric with a final adjustment upon measurement at the end of the performance period. The Company granted 4,728,318 PSUs to employees during the year ended December 31, 2022 with a total grant date fair value of $14.5 million. The PSUs vest based on the Company's achievement of certain specified operational milestones by various dates through December 2025. As of the grant date, the Company's analysis determined that these operational milestone events are probable of achievement and as such, compensation expense of $6.9 million has been recognized for the year ended December 31, 2022. There were no PSUs granted to employees during the year ended December 31, 2021.
There were no PSUs granted to the CEO during the year ended December 31, 2022. The following PSUs were granted to the CEO during the year ended December 31, 2021:
•During April 2021, in connection with the appointment of the CEO, the Company awarded 2,000,000 PSUs. The PSUs will vest in one-third increments based upon the achievement of certain stock price milestones during the performance period ending October 2025. In addition, the PSUs are subject to a service condition which requires continuous service through October 2023;
•During May 2021, the Company awarded 1,703,828 PSUs. The PSUs vest based on the Company's achievement of certain specified stock price milestones over a three-year performance period ending May 2024, subject to continued service with the Company through the applicable vesting dates;
•During May 2021, the Company awarded 300,000 PSUs whereby vesting depends upon the occurrence of certain operational milestone events by May 2024 that are deemed probable of achievement; and
•During November 2021, the Company awarded 6,000,000 PSUs. These PSUs vest in one-third increments through a five-year performance period beginning November 4, 2021 based upon the achievement of certain stock price milestones during the performance period ending in November 2026.
The grant date fair value of the PSUs awarded to the CEO was $40.3 million for the year ended December 31, 2021. The compensation expense recognized for the PSUs awarded to the CEO during the year was $17.3 million and $6.3 million for the years ended December 31, 2022 and 2021, respectively, and was included in selling, general and administrative expenses in the consolidated statement of operations.
The activity for performance-based restricted stock units in the year ended December 31, 2022 was as follows (in thousands, except weighted-average grant-date fair value amounts):
The following table summarizes the Company’s total stock-based compensation expense by line item for the years ended December 31, 2022 and 2021 (in thousands):
The Company's total unrecognized compensation cost as of December 31, 2022 and 2021 was approximately $64.2 million and $117.8 million, respectively.
2020 Employee Stock Purchase Plan
The 2020 Employee Stock Purchase Plan (the “2020 ESPP”) was adopted by the board of directors on September 18, 2020, approved by the stockholders on December 18, 2020, and became effective on December 21, 2020 with the Business Combination. On December 21, 2020, the board of directors delegated its authority to administer the 2020 ESPP to the Compensation Committee. The Compensation Committee determined that it is in the best interests of the Company and its stockholders to implement successive three-month purchase periods, with the first offering period commencing on grant date January 3, 2022 and a purchase date of April 1, 2022. The 2020 ESPP provides participating employees with the opportunity to purchase up to a maximum number of shares of Common Stock of 4,034,783, plus the number of shares of Common Stock that are automatically added on January 1st of each year for a period of ten years, in an amount equal to the lesser of (i) 1% of the total number of shares of Common Stock outstanding on December 31st of the preceding calendar year, and (ii) 8,069,566 shares of Common Stock.
During the year ended December 31, 2022, total employee withholding contributions for the 2020 ESPP was $2.9 million. Approximately $1.3 million of stock-based compensation expense was recognized for the 2020 ESPP during the years ended December 31, 2022.
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