Quarterly report pursuant to Section 13 or 15(d)

Stock-Based Compensation

v3.7.0.1
Stock-Based Compensation
6 Months Ended
Jun. 30, 2017
Stock-Based Compensation  
Stock-Based Compensation

15.Stock-Based Compensation

 

The Company has stock options and restricted stock units outstanding under the 2004 Stock Incentive Plan (the “2004 Plan”), the 2010 Long-Term Incentive Plan (the “2010 Plan”) and the Envestnet, Inc. Management Incentive Plan for Envestnet | Tamarac Management Employees (the “2012 Plan”). On May 13, 2015, the shareholders approved the 2010 Long-Term Incentive Plan as Amended. The amendment increased the number of common shares of the Company reserved for delivery under the 2010 Plan by 2,700,000 shares.

 

In connection with the Yodlee merger, the Company adopted the 2015 Acquisition Equity Award Plan (the “2015 Plan”). The 2015 Plan provides for the grant of restricted common stock units for certain Envestnet | Yodlee employees. The maximum number of shares of stock which may be issued with respect to awards under the 2015 Plan is 1,052,000. These awards vest over a period of 43 months subsequent to the acquisition date of November 19, 2015. As of June 30, 2017, the remaining amount of unrecognized expense totaled $6,634.

 

As of June 30, 2017, the maximum number of common shares of the Company available for future issuance under the Company’s plans is 416,967. See Note 21.

 

Stock-based compensation expense under the Company’s plans was as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

 

June 30,

 

June 30,

 

    

2017

    

2016

 

2017

    

2016

Stock-based compensation expense

 

$

7,945

 

$

6,703

 

$

15,403

 

$

18,318

Tax effect on stock-based compensation expense

 

 

(2,983)

 

 

(2,681)

 

 

(5,784)

 

 

(7,327)

Net effect on income

 

$

4,962

 

$

4,022

 

$

9,619

 

$

10,991

 

The tax effect on stock-based compensation expense above was calculated using a blended statutory rate of 37.5% and 40.0% for the three months ended June 30, 2017 and 2016, respectively.  However, due to the valuation allowance recorded on domestic deferreds, there was no tax effect related to stock-based compensation expense for the three and six months ended June 30, 2017.

Stock Options

 

The following weighted average assumptions were used to value options granted during the periods indicated:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

    

2017

    

2016

    

 

2017

    

2016

    

Grant date fair value of options

 

$

 —

 

$

13.26

 

 

$

14.51

 

$

9.49

 

Volatility

 

 

 —

%  

 

42.4

%  

 

 

43.8

%  

 

42.2

%  

Risk-free interest rate

 

 

 —

%  

 

1.4

%  

 

 

2.1

%  

 

1.4

%  

Dividend yield

 

 

 —

%  

 

 —

%  

 

 

 —

%  

 

 —

%  

Expected term (in years)

 

 

 —

 

 

6.2

 

 

 

6.3

 

 

6.3

 

 

The following table summarizes option activity under the Company’s plans:

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

    

 

 

    

Weighted-Average

    

 

 

 

 

 

 

Weighted-

 

Remaining

 

 

 

 

 

 

 

Average

 

Contractual Life

 

Aggregate

 

 

Options

 

Exercise Price

 

(Years)

 

Intrinsic Value

Outstanding as of December 31, 2016

 

3,033,194

 

$

16.33

 

4.3

 

$

63,264

  Granted

 

75,238

 

 

31.70

 

 

 

 

 

  Exercised

 

(208,334)

 

 

9.12

 

 

 

 

 

  Forfeited

 

(9,062)

 

 

45.81

 

 

 

 

 

Outstanding as of March 31, 2017

 

2,891,036

 

 

17.15

 

4.5

 

 

50,792

  Granted

 

 —

 

 

 —

 

 

 

 

 

  Exercised

 

(84,949)

 

 

8.46

 

 

 

 

 

  Forfeited

 

(1,667)

 

 

32.46

 

 

 

 

 

Outstanding as of June 30, 2017

 

2,804,420

 

 

17.41

 

4.3

 

 

66,206

Options exercisable

 

2,549,439

 

 

15.85

 

3.8

 

 

63,824

 

Exercise prices of stock options outstanding as of June 30, 2017 range from $0.11 to $55.29. At June 30, 2017, there was $2,956 of unrecognized stock-based compensation expense related to unvested stock options, which the Company expects to recognize over a weighted-average period of 1.9 years.

 

Restricted Stock Units and Restricted Stock Awards

 

Periodically, the Company grants restricted stock unit awards to employees that vest one-third on each of the first three anniversaries of the grant date. Beginning with grants issued in February 2016, restricted stock units awards vest one-third on the first anniversary of the grant date and quarterly thereafter. The following is a summary of the activity for unvested restricted stock units and awards granted under the Company’s plans:

 

 

 

 

 

 

 

 

    

    

    

Weighted-

 

 

 

 

Average Grant

 

 

Number of

 

Date Fair Value

 

 

Shares

 

per Share

Outstanding as of December 31, 2016

 

1,894,759

 

$

30.40

Granted

 

872,941

 

 

31.89

Vested

 

(526,572)

 

 

31.68

Forfeited

 

(20,084)

 

 

27.52

Outstanding as of March 31, 2017

 

2,221,044

 

 

31.98

Granted

 

47,700

 

 

35.05

Vested

 

(199,163)

 

 

30.59

Forfeited

 

(45,683)

 

 

30.11

Outstanding as of June 30, 2017

 

2,023,898

 

 

32.17

 

At June 30, 2017, there was $56,907 of unrecognized stock-based compensation expense related to unvested restricted stock units and awards, which the Company expects to recognize over a weighted-average period of 2.2 years.