Stock-Based Compensation |
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| Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-Based Compensation | Stock-Based Compensation Equity Incentive Plan
In June 2022, the stockholders of the Company approved the Grove Collaborative Holdings, Inc. 2022 Equity and Incentive Plan (the “2022 Plan”). The Plan provides for the granting of stock-based awards to eligible participants,
specifically officers, other employees, non-employee directors, consultants, independent contractors under terms and provisions established by the board of directors.
The 2022 Plan authorizes the issuance of the Company’s Class A Common Stock of up to 8,107,744 shares. The number of shares available shall increase annually on the first day of each calendar year continuing until (and including) calendar year December 31, 2032, with annual increases equal to lesser of (i) 5% of the number of shares of the Company’s Class A and Class B Common Stock issued and outstanding on December 31 of the immediately preceding fiscal year, and (ii) an amount determined by the board of directors.
Stock option activity under the Company’s equity incentive plan is as follows (in thousands, except share and per share amounts):
No stock options were granted during the years ended December 31, 2024 and 2023. The total grant date fair value of stock options that vested during the years ended December 31, 2024 and 2023 was $0.1 million and $0.2 million, respectively. The aggregate intrinsic value of options exercised during the years ended December 31, 2024 and 2023 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. Since a liquidity event is not deemed probable until such event occurs, no compensation cost related to the performance condition was recognized prior to the Business Combination on June 16, 2022. Subsequently, the Company recorded stock-based compensation expense of $4.6 million for service periods completed prior to the Business Combination. As of December 31, 2024, the market-based vesting criteria had not been met.
Restricted Stock Units (RSUs)
The following table summarizes the activity for all RSUs under all of the Company’s equity incentive plans for the year ended December 31, 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”) under the 2022 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 years ended December 31, 2024 and 2023, the Company recorded $0.5 million and $0.3 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 3 years. During the year ended December 31, 2024 stock-based compensation expense related to the Executive Chair Award was $0.2 million.
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. The Company recognized $0.6 million and $0.8 million of expense related to the ESSP for the years ended December 31, 2024 and 2023, respectively. There were 279,133 shares of Class A Common Stock purchased under the ESPP during the year ended December 31, 2024.
The following assumptions were used in estimating the fair values of shares under the ESPP for the period indicated:
Stock-Based Compensation Expense
For the years ended December 31, 2024 and 2023 the Company recognized a total of $12.0 million and $15.5 million of stock-based compensation expense, 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 consolidated statements of operations for each period presented. As of December 31, 2024, the total unrecognized compensation expense related to unvested options and RSUs was $7.4 million, which the Company expects to recognize over an estimated weighted average period of 1.8 years. Equity award modifications during the presented periods were not material.
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