Equity-Based Compensation |
9 Months Ended |
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Sep. 30, 2021 | |
| Share-based Payment Arrangement [Abstract] | |
| Equity-Based Compensation | Equity-Based Compensation On October 22, 2018, the Company implemented the HireRight GIS Group Holdings LLC Equity Incentive Plan (“Equity Plan”). The Equity Plan provides for the issuance of up to 4,573,463 Class A Units of the Company (“Units”) pursuant to awards made under the Equity Plan to members of the board of managers, officers and employees as determined by the Company’s compensation committee. Outstanding Unit options vest based either upon continued service (“Time-Vesting Options”), or upon attainment of specified levels of cash-on-cash return to the Company’s investors as a multiple of invested capital (“MOIC”) on their investments in the Company (“Performance-Vesting Options”). Outstanding Unit option awards issued to officers and employees consist of half Time-Vesting Options and half Performance-Vesting Options.
The Company did not grant any options during the three months ended September 30, 2021. During the nine months ended September 30, 2021, the Company granted option awards covering 229,195 units, of which 53,858 units are Time-Vesting Options and the remaining option awards covering 175,337 units are half Time-Vesting Options and half Performance-Vesting Options. The Time-Vesting Options and Performance Vesting Options granted during 2021 under the Equity Plan had a weighted-average grant date fair value of $7.98 and $5.12, respectively, calculated using the Monte Carlo simulation.
Included in selling, general and administrative expenses is equity-based compensation expense of $0.8 million and $0.9 million for the three months ended September 30, 2021 and 2020, respectively, and $2.5 million and $2.6 million for the nine months ended September 30, 2021 and 2020, respectively. For Time-Vesting Options and Performance-Vesting Options outstanding and unvested as of September 30, 2021, the Company will recognize future compensation expense of approximately $5.1 million and $13.1 million, respectively, over a weighted average remaining vesting period of 1.4 years and 1.3 years, respectively.
In connection with the IPO, the Company entered into new compensation plans. See Note 19 — Subsequent Events included in these condensed consolidated financial statements for more information regarding the adoption of the Omnibus Incentive Plan and the Employee Stock Purchase Plan in connection with the IPO.
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