15.Stock-Based Compensation and Other Compensation Plans

2021 Equity Incentive Plan

In connection with the IPO, our Board of Directors adopted the 2021 Equity Incentive Plan. The 2021 Equity Incentive Plan allows for the grant of stock options, both incentive stock options and “non-qualified” stock options; stock appreciation rights, alone or in conjunction with other awards; restricted stock and restricted stock units (“RSUs”); incentive bonuses, which may be paid in cash, stock or a combination thereof; and other stock-based awards. We refer to these collectively herein as “Awards”.

The 2021 Equity Incentive Plan is administered by our compensation committee, or such other committee designated by our Board of Directors to administer the plan.

In May of 2024, an additional 5,750,000 shares were approved under the 2021 Equity Incentive Plan. The maximum number of shares of Class A common stock that may be issued under the 2021 Equity Incentive Plan will not exceed 11,100,000 shares, subject to certain adjustments in the event of a change in our capitalization.

Restricted Stock Units

RSU activity during the period was as follows:

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The RSUs granted generally vest in the following installments: (i) one-third at the first anniversary of the award date, (ii) one-third at the second anniversary of the award date and (iii) one-third at the third anniversary of the award date. The grant date fair value of the awards was determined using the Company’s closing stock price on the last business day prior to the date of grant. Unvested RSUs and vested but not issued RSUs participate in nonforfeitable dividends or distributions with the common equity holders of the Company.

The total fair value of RSUs that vested during the years ended December 31, 2024, 2023 and 2022 was $10.4 million, $7.6 million and $9.8 million, respectively.

The weighted average grant date fair value of RSUs granted during 2023 and 2022 was $10.26 per share and $15.06 per share, respectively. 

As of December 31, 2024, $16.4 million of compensation cost related to our unvested RSUs remained to be recognized over a weighted-average period of 0.9 years. Common stock dividends are paid on unvested shares of restricted stock and RSUs and vested but not issued RSUs. We issue new shares of our common stock when awarding restricted stock and RSUs.

Performance-Based Restricted Stock Units

PSU activity during the period was as follows:

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The PSUs granted in 2024 were granted to management under the 2021 Equity Incentive Plan and have the following performance criteria:

The vesting and payout of the PSUs occur when the related service condition is completed, which is approximately three years after the grant date regardless of the duration of the stipulated performance period. The PSUs can be paid out in either Class A common stock or cash, at our election. Dividends accrue on PSUs and are paid upon vesting. As of December 31, 2024, $7.1 million of compensation cost related to unvested PSUs remained to be recognized over a weighted-average period of 1.3 years.

The grant date fair value was determined using the Monte Carlo simulation method and is expensed ratably over the service period. Expected volatilities used in the fair value simulation were estimated using historical periods consistent with the remaining performance periods. The risk-free rate was based on the U.S. Treasury rate for a term commensurate with the expected life of the grant.

We used the following assumptions to estimate the fair value of PSUs granted during the periods indicated:

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During the years ended December 31, 2023 and 2022, we granted 358,551 PSUs and 167,228 PSUs, respectively, with a weighted average grant date fair value of $8.44 and $25.36, respectively, to management under the 2021 Equity Incentive Plan.

Compensation Cost

For the years ended December 31, 2024, 2023 and 2022, we recognized total stock-based compensation expense of $18.2 million, $11.6 million and $12.0 million, respectively, of which $17.0 million, $10.8 million and $11.4 million, respectively, was included in general and administrative expenses and $1.2 million, $0.8 million and $0.6 million, respectively, was included in direct operating costs. The related tax benefit was $2.7 million, $1.2 million and $1.3 million for the years ended December 31, 2024, 2023 and 2022, respectively.

401(k) Plan

We sponsor a Safe Harbor 401(k) Plan with a Company match of up to 6% of the employee’s salary. We made contributions of $1.3 million, $0.7 million and $0.6 million for the years ended December 31, 2024, 2023 and 2022, respectively. The Company match was increased to up to 6% of the employee’s salary, effective January 1, 2024. The Company match was up to 4% of the employee’s salary for the years ended December 31, 2023 and 2022.