Annual report pursuant to Section 13 and 15(d)

Equity-Based Compensation

v3.20.4
Equity-Based Compensation
12 Months Ended
Dec. 31, 2020
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]  
Equity-Based Compensation

16. EQUITY-BASED COMPENSATION

Restricted Stock Units and Stock Options

On November 2, 2012, the Company’s board of directors adopted the 2012 Equity Incentive Plan.

A total of 1,687,500 shares were originally reserved and available for issuance under the 2012 Equity Incentive Plan. As of December 31, 2020 and 2019, 345,428 and 489,549 shares, respectively, were available for grant. The equity interests may be issued in the form of shares of the Company’s Class A common stock and/or Class B units of SLP. (All references to units or interests of SLP refer to Class B units of SLP and accompanying shares of Class B common stock of Silvercrest.)

The purposes of the 2012 Equity Incentive Plan are to (i) align the long-term financial interests of our employees, directors, consultants and advisers with those of our stockholders; (ii) attract and retain those individuals by providing compensation opportunities that are consistent with our compensation philosophy; and (iii) provide incentives to those individuals who contribute significantly to our long-term performance and growth. To accomplish these purposes, the 2012 Equity Incentive Plan provides for the grant of units of SLP. The 2012 Equity Incentive Plan also provides for the grant of stock options, stock appreciation rights, or SARs, restricted stock awards, restricted stock units, performance-based stock awards and other stock-based awards (collectively, stock awards) based on our Class A common stock. Awards may be granted to employees, including officers, members, limited partners or partners who are engaged in the business of one or more of our subsidiaries, as well as non-employee directors and consultants.

The Compensation Committee may impose vesting conditions and awards may be forfeited if the vesting conditions are not met. During the period that any vesting restrictions apply, unless otherwise determined by the Compensation Committee, the recipient of awards that vest in the form of units of SLP will be eligible to participate in distributions of income from SLP. In addition, before the vesting conditions have been satisfied, the transferability of such units is generally prohibited and such units will not be eligible to be exchanged for cash or shares of our Class A common stock.

In August 2015, the Company granted 966,510 restricted stock units (“RSUs”) under the 2012 Equity Incentive Plan at a fair value of $13.23 per share to existing Class B unit holders.  These RSUs will vest and settle in the form of Class B units of SLP.  Twenty-five percent of the RSUs granted vest and settle on each of the first, second, third and fourth anniversaries of the grant date.

In May 2016, the Company granted 3,791 RSUs under the 2012 Equity Incentive Plan at a fair value of $13.19 per share to existing Class B unit holders.  These RSUs will vest and settle in the form of Class B units of SLP.  Twenty-five percent of the RSUs granted vest and settle on each of the first, second, third and fourth anniversaries of the grant date.  

In May 2016, the Company granted 3,000 RSUs under the 2012 Equity Incentive Plan at a fair value of $13.19 per share to certain members of the Board of Directors.  These RSUs will vest and settle in the form of Class A shares of Silvercrest.  One hundred percent of the RSUs granted vest and settle on the first anniversary of the grant date.

In May 2016, the Company granted 7,582 RSUs under the 2012 Equity Incentive Plan at a fair value of $13.19 per share to an employee.  These RSUs will vest and settle in the form of Class A shares of Silvercrest.  Twenty-five percent of the RSUs granted vest and settle on each of the first, second, third and fourth anniversaries of the grant date.

In October 2018, the Company granted 105,398 non-qualified stock options (“NQOs”) under the 2012 Equity Incentive Plan to an existing Class B unit holder.  The fair value of the NQOs have been derived using the Black-Scholes method with the following assumptions:  Strike price of $13.97, Risk Free rate of 2.94% (5-year treasury rate), expiration of 5 years and volatility of 32.7%.  Additionally, the calculation of the compensation expense assumes a forfeiture rate of 1.0%, based on historical experience.  These NQOs will vest and settle in the form of Class B units of SLP.  One third of the NQOs will vest and settle on each of the first, second and third anniversaries of the grant date.

In May 2019, the Company granted 60,742 non-qualified stock options (“NQOs”) under the 2012 Equity Incentive Plan to an existing Class B unit holder.  The fair value of the NQOs has been derived using the Black-Scholes method with the following assumptions:  Strike price of $14.54, Risk Free rate of 2.32% (5-year treasury rate), expiration of 5 years and volatility of 34.2%.  Additionally, the calculation of the compensation expense assumes a forfeiture rate of 1.0%, based on historical experience.  These NQOs will vest and become exercisable into of Class B units of SLP.  One third of the NQOs will vest and become exercisable on each of the first, second and third anniversaries of the grant date.

In May 2019, the Company granted 34,388 RSUs under the 2012 Equity Incentive Plan at a fair value of $14.54 per share to an existing Class B unit holder.  These RSUs will vest and settle in the form of Class B shares of SLP.  Twenty-five percent of the RSUs granted vest and settle on each of the first, second, third and fourth anniversaries of the grant date.

In March 2020, the Company granted 8,242 RSUs under the 2012 Equity Incentive Plan at a fair value of $11.83 per share to a Board member.  These RSUs will vest and settle in the form of Class A shares of Silvercrest.  All of the RSUs granted vest on the third anniversary of the grant date.

In May 2020, the Company granted 86,764 NQOs under the 2012 Equity Incentive Plan to an existing Class B unit holder.  The fair value of the NQOs has been derived using the Black-Scholes method with the following assumptions:  Strike price of $10.18, Risk Free rate of 0.64% (10-year treasury rate), expiration of 10 years and volatility of 48.0%.  Additionally, the calculation of the compensation expense assumes a forfeiture rate of 1.0%, based on historical experience.  These NQOs will vest and become exercisable into of Class B units of SLP.  One-third of the NQOs will vest and become exercisable on each of the first, second and third anniversaries of the grant date.

In May 2020, the Company granted 49,116 RSUs under the 2012 Equity Incentive Plan at a fair value of $10.11 per share to an existing Class B unit holder.  These RSUs will vest and settle in the form of Class B shares of SLP.  Twenty-five percent of the RSUs granted vest and settle on each of the first, second, third and fourth anniversaries of the grant date.

A summary of the NQO grants by the Company as of December 31, 2020 and 2019 is presented below:

 

 

  

Non-Qualified Options
Granted

 

 

  

Units

 

Fair Value per unit

 

Total granted at January 1, 2019

 

 

105,398

 

$

13.97

 

Granted in May 2019

 

 

60,742

 

 

14.54

 

Total granted at December 31, 2019

 

 

166,140

 

$

13.97 – 14.54

 

Granted in May 2020

 

 

86,764

 

 

10.18

 

Total granted at December 31, 2020

 

 

252,904

 

$

10.18 – 14.54

 

 

A summary of the RSU grants by the Company as of December 31, 2020 and 2019 is presented below:

 

 

  

Restricted Stock Units
Granted

 

 

  

Units

 

Fair Value per unit

 

Total granted at January 1, 2019

 

 

247,316

 

$

13.19 – 13.23

 

Granted in May 2019

 

 

34,388

 

 

14.54

 

Vested in May 2019

 

 

(2,843

)

 

(13.19

)

Vested in August 2019

 

 

(241,627

)

 

(13.23

)

Total granted at December 31, 2019

 

 

37,234

 

$

13.19 – 14.54

 

Granted in March 2020

 

 

8,242

 

 

11.83

 

Granted in May 2020

 

 

49,116

 

 

10.18

 

Vested in May 2020

 

 

(11,442

)

 

(13.19 –14.54

)

Total granted at December 31, 2020

 

 

83,150

 

$

10.18 – 14.54

 

 

 

 

 

 

 

 

 

 

For the years ended December 31, 2020 and 2019, the Company recorded compensation expense related to such RSUs and NQOs of $659 and $2,272, respectively, as part of total compensation expense in the Consolidated Statements of Operations for the years then ended.  As of December 31, 2020 and 2019, there was $1,342 and $945, respectively, of unrecognized compensation expense related to unvested awards. As of December 31, 2020 and 2019, the unrecognized compensation expense related to unvested awards is expected to be recognized over a period of 1.44 and 1.62 years, respectively.