Quarterly report pursuant to Section 13 or 15(d)

Stock-Based Compensation

v3.22.1
Stock-Based Compensation
3 Months Ended
Mar. 31, 2022
Share-based Payment Arrangement [Abstract]  
Stock-Based Compensation Stock-Based Compensation
 
The Company has stock options, restricted stock units (“RSUs”) and performance stock units (“PSUs”) outstanding under the 2010 Long-Term Incentive Plan (the “2010 Plan”) and the Envestnet, Inc. 2019 Acquisition Equity Incentive Plan (the “2019 Equity Plan”).

As of March 31, 2022, the maximum number of common shares available for future issuance under the Company’s plans is 2,423,500.
 
Stock-based compensation expense under the Company’s plans was as follows:
  Three Months Ended
  March 31,
  2022 2021
(in thousands)
Stock-based compensation expense $ 21,690  $ 14,013 
Tax effect on stock-based compensation expense (5,531) (3,573)
Net effect on income $ 16,159  $ 10,440 
 
The tax effect on stock-based compensation expense above was calculated using a blended statutory rate of 25.5% for each of the three months ended March 31, 2022 and 2021.

Stock Options
 
The Company did not grant any stock options in the three months ended March 31, 2021 or 2022. 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
(in thousands)
Outstanding as of December 31, 2021 365,241  $ 38.61  3.3 $ 14,878 
Exercised (38,681) 17.02   
Forfeited (260) 74.83   
Outstanding as of March 31, 2022
326,300  41.14  3.4 10,869 
Options exercisable 321,779  $ 40.66  3.3 $ 10,869 
 
Exercise prices of stock options outstanding as of March 31, 2022 range from $15.34 to $74.83. At March 31, 2022, there was an immaterial amount of unrecognized stock-based compensation expense related to unvested stock options, which the Company expects to recognize over a weighted-average period of 1.3 years.

Restricted Stock Units
 
The Company has granted restricted stock units and performance-based stock units to employees that are unvested. Performance-based stock units vest upon the achievement of certain pre-established business and financial metrics as well as a subsequent service condition. The business and financial metrics governing the vesting of these performance-based stock units provide thresholds that dictate the number of shares to vest upon each evaluation date, which range from 0% to 150%. If these metrics are achieved, as defined in the individual grant terms, these shares would cliff vest three years from the grant date.

The following is a summary of the activity for unvested restricted stock units and performance stock units granted under the Company’s plans:
RSUs PSUs
  Number of
Shares
Weighted-
Average Grant
Date Fair Value
per Share
Number of
Shares
Weighted-
Average Grant
Date Fair Value
per Share
Outstanding as of December 31, 2021
1,507,424  $ 71.50  359,184  $ 73.64 
Granted 1,266,891  74.76  75,025  82.96 
Vested (458,869) 69.91  (55,450) 67.46 
Forfeited (51,484) 72.04  (1,359) 75.67 
Outstanding as of March 31, 2022
2,263,962  73.63  377,400  76.39 
At March 31, 2022, there was $157.6 million of unrecognized stock-based compensation expense related to unvested restricted stock units, which the Company expects to recognize over a weighted-average period of 2.3 years. At March 31, 2022, there was $16.2 million of unrecognized stock-based compensation expense related to unvested performance-based restricted stock units, which the Company expects to recognize over a weighted-average period of 1.9 years.