Stock-Based Compensation |
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| Stock-Based Compensation | Stock-Based Compensation Stock Options
Stock option activity under the Company’s incentive plan is as follows (in thousands, except share and per share amounts):
The total grant date fair value of options that vested during nine months ended September 30, 2024 was $0.1 million. The aggregate intrinsic value of options exercised during the nine months ended September 30, 2024 was nominal. The aggregate intrinsic value is the difference between the current fair value of the underlying common stock and the exercise price for in-the-money stock options.
Market-Based Stock Options
In February 2021, the Company granted 203,434 stock options with market and liquidity event-related performance-based vesting criteria with an exercise price of $18.85 per share. 100% of the stock options vest upon valuation of the Company’s stock at a stated price upon occurrence of specified transactions. Fair value was determined using the probability weighted expected term method (“PWERM”), which involves the estimation of future potential outcomes as well as values and probabilities associated with each potential outcome. Two potential scenarios were used in the PWERM that utilized 1) the value of the Company’s common equity, and 2) a Monte Carlo simulation to specifically value the award. The total grant date fair value of the award was determined to be $5.5 million. As of September 30, 2024, the market-based vesting criteria had not been met. All expense related to this award has been recognized in prior periods.
Restricted Stock Units (RSUs)
The following table summarizes the activity for all RSUs under all of the Company’s equity incentive plans for the nine months ended September 30, 2024:
CEO Award
In August 2023, the Company’s Board of Directors granted its Chief Executive Officer an aggregate of 850,000 Class A common stock RSUs (the “CEO Award”) separate from the Grove Collaborative Holdings, Inc. 2022 Equity and Incentive Plan. A portion of the CEO Award contains market based vesting requirements consisting of four tranches that vest separately upon the Company’s public stock price meeting certain price thresholds. Additionally, the CEO Award also contains a service requirement with 25% of the shares vesting each year from the grant date for four years.
The CEO Award has a total aggregate value of $2.0 million. During the three and nine months ended September 30, 2024, the Company recorded $0.2 million and $0.6 million of stock-based compensation expense related to the CEO Award, respectively. During the three and nine months ended September 30, 2023 the Company recorded $0.1 million of stock-based compensation expense related to the CEO Award.
Executive Chair Award
In February 2024, the Company’s Board of directors granted its Executive Chairman of the Board of Directors 286,000 shares of market-based restricted stock units (the “Executive Chair Award”). The Executive Chair Award consists of the four tranches that vest separately upon the Company’s public stock price meeting certain price thresholds. Additionally, the Executive Chair Award also contains a service requirement with 33% of the shares vesting each year from the grant date for three years.
The Executive Chair Award has a total aggregate fair value of $0.4 million. During the three and nine ended September 30, 2024, stock-based compensation expense related to the Executive Chair Award was nominal and $0.2 million respectively.
Employee Stock Purchase Plan
In May 2022, the Company’s board of directors adopted the 2022 Employee Stock Purchase Plan (the “ESPP”), which was subsequently approved by the Company’s stockholders. The ESPP went into effect on November 16, 2022. Subject to certain limitations contained therein, the ESPP allows eligible employees to contribute, through payroll deductions, up to 20% of their eligible compensation to purchase the Company’s Class A common stock at a discounted price per share.
Stock-Based Compensation Expense
The Company recognized a total of $2.8 million and $2.1 million of stock-based compensation expense for the three months ended September 30, 2024 and 2023, respectively and $9.3 million and $11.9 million of stock-based compensation expense for the nine months ended September 30, 2024 and 2023, respectively, related to stock options and RSUs granted to employees and non-employees. Stock-based compensation expense was predominately recorded in selling, general and administrative expenses in the statements of operations for each period presented. As of September 30, 2024, the total unrecognized compensation expense related to unvested options and RSUs was $9.6 million, which the Company expects to recognize over an estimated weighted average period of 1.7 years.
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