Quarterly report pursuant to Section 13 or 15(d)

Stock-Based Compensation

v3.5.0.2
Stock-Based Compensation
6 Months Ended
Jun. 30, 2016
Stock-Based Compensation  
Stock-Based Compensation

12.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 (see Note 3), 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, 2016, the maximum number of common shares of the Company available for future issuance under the Companys plans is 1,576,730.

 

Stock-based compensation expense under the Companys plans was as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

 

June 30,

 

June 30,

 

    

2016

    

2015

 

2016

    

2015

Stock-based compensation expense

 

$

6,703

 

$

3,330

 

$

18,318

 

$

6,749

Tax effect on stock-based compensation expense

 

 

(2,681)

 

 

(1,332)

 

 

(7,327)

 

 

(2,700)

Net effect on income

 

$

4,022

 

$

1,998

 

$

10,991

 

$

4,049

 

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,

 

 

    

2016

    

2015

    

 

2016

    

2015

 

Grant date fair value of options

 

$

13.26

 

$

20.60

 

 

$

9.49

 

$

20.90

 

Volatility

 

 

42.4

%  

 

36.8

%  

 

 

42.2

%  

 

37.2

%  

Risk-free interest rate

 

 

1.4

%  

 

1.8

%  

 

 

1.4

%  

 

1.7

%  

Dividend yield

 

 

 —

%  

 

 —

%  

 

 

 —

%  

 

 —

%  

Expected term (in years)

 

 

6.2

 

 

6.0

 

 

 

6.3

 

 

6.0

 

 

The following table summarizes option activity under the Companys plans:

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

    

 

 

    

Weighted-Average

    

 

 

 

 

 

 

Weighted-

 

Remaining

 

 

 

 

 

 

 

Average

 

Contractual Life

 

Aggregate

 

 

Options

 

Exercise Price

 

(Years)

 

Intrinsic Value

Outstanding as of December 31, 2015

 

3,533,791

 

$

15.03

 

4.7

 

$

61,199

  Granted

 

105,645

 

 

20.51

 

 

 

 

 

  Exercised

 

(152,220)

 

 

7.93

 

 

 

 

 

  Forfeited

 

(38,777)

 

 

35.93

 

 

 

 

 

Outstanding as of March 31, 2016

 

3,448,439

 

 

15.27

 

4.7

 

 

50,987

  Granted

 

55,719

 

 

31.03

 

 

 

 

 

  Exercised

 

(96,068)

 

 

11.17

 

 

 

 

 

  Forfeited

 

(24,191)

 

 

33.35

 

 

 

 

 

Outstanding as of June 30, 2016

 

3,383,899

 

 

15.43

 

4.5

 

 

67,219

Options exercisable

 

3,013,963

 

 

13.00

 

4.0

 

 

65,437

 

Exercise prices of stock options outstanding as of June 30, 2016 range from $0.11 to $55.29.    At June 30, 2016, there was $4,265 of unrecognized stock-based compensation expense related to unvested stock options, which the Company expects to recognize over a weighted-average period of 2.1 years.

 

Restricted Stock Units

 

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 Company entered into employment agreements with certain executive officers, three of whom received performance-based restricted stock unit awards in May 2016 which vest upon the achievement of certain “Target Performance Measures” as defined in the employment agreements, for the periods ending December 31, 2016, December 31, 2017 and December 31, 2018 and four of whom received restricted stock units awards in August 2016 which vest quarterly thereafter. The following is a summary of the activity for unvested restricted stock unit awards granted under the Companys plans:

 

 

 

 

 

 

 

 

    

    

    

Weighted-

 

 

 

 

Average Grant

 

 

Number of

 

Date Fair Value

 

 

Shares

 

per Share

Outstanding as of December 31, 2015

 

2,153,211

 

 

35.63

Granted

 

424,844

 

 

20.57

Vested

 

(782,598)

 

 

35.09

Forfeited

 

(87,513)

 

 

32.94

Outstanding as of March 31, 2016

 

1,707,944

 

 

33.40

Granted

 

237,605

 

 

30.97

Vested

 

(110,999)

 

 

31.40

Forfeited

 

(42,781)

 

 

27.33

Outstanding as of June 30, 2016

 

1,791,769

 

 

31.57

 

At June 30, 2016, there was $49,756 of unrecognized stock-based compensation expense related to unvested restricted stock unit awards, which the Company expects to recognize over a weighted-average period of 2.4 years.