Stock-Based Compensation |
3 Months Ended |
|---|---|
Mar. 31, 2022 | |
| Share-based Payment Arrangement [Abstract] | |
| Stock-Based Compensation | Stock-Based Compensation Equity Incentive Plans
On October 22, 2018, the Company implemented the HireRight GIS Group Holdings LLC Equity Incentive Plan (the “Equity Plan”) providing for the issuance of up to 4,573,463 of its Class A Units (“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. Following the adoption of the Omnibus Incentive Plan (as defined below), the Company did not grant further awards under the Equity Plan. However, any outstanding awards granted under the Equity Plan remain subject to the Equity Plan and applicable award agreement. In connection with the Corporate Conversion, each option to purchase units of HireRight GIS Group Holdings LLC was converted into an option to purchase shares of common stock of HireRight Holdings Corporation.
On October 18, 2021, the Company’s stockholders adopted the Company’s 2021 Omnibus Incentive Plan (the “Omnibus Incentive Plan”), which became effective on October 28, 2021. The Omnibus Incentive Plan provides for the grant of awards of non-qualified stock options, incentive (qualified) stock options, stock appreciation rights, restricted stock awards, restricted stock units (“RSU”), other stock-based awards, other cash-based awards or any
combination of the foregoing to eligible employees, consultants, directors, and officers. At March 31, 2022, 6,801,842 shares were available for issuance under the Omnibus Incentive Plan.
Equity Plan Awards (Pre-IPO)
The stock option awards issued prior to the Company’s IPO pursuant to the Equity Plan vest based either upon continued service (“Time-Vesting Options”), or upon attainment of specified levels of cash-on-cash return to the Company’s pre-IPO investors as a multiple of invested capital (“MOIC”) on their investments in the Company (“Performance-Vesting Options”). On March 19, 2022, the compensation committee of the Company’s Board of Directors approved a modification of outstanding Performance-Vesting Options to vest based solely on continued service rather than MOIC attainment. Under the modified vesting terms, the Performance-Vesting Options would vest quarterly starting March 31, 2022 and ending December 31, 2024.
Included in selling, general and administrative expenses and cost of services (exclusive of depreciation and amortization) is stock-based compensation expense of $2.6 million and $0.2 million, respectively, for the three months ended March 31, 2022. Included in selling, general and administrative expenses is stock-based compensation expense of $0.8 million for the three months ended March 31, 2021.
Stock Options under the Equity Plan
For Time-Vesting Options and Performance-Vesting Options outstanding and unvested as of March 31, 2022, the Company will recognize future compensation expense of $8.0 million over a weighted average remaining vesting period of 2.52 years.
Stock Options under the Omnibus Incentive Plan
The Company granted 1,001,650 options during the three months ended March 31, 2022 under the Omnibus Incentive Plan, with a weighted-average grant date fair value of $5.08 calculated using the Black-Scholes option valuation model. For options under the Omnibus Incentive Plan outstanding and unvested as of March 31, 2022, the Company will recognize future compensation expense of $14.9 million over a weighted average remaining vesting period of 3.21 years.
Restricted Stock Units
The Company granted 719,972 RSUs with a weighted-average grant date fair value of $15.52 per share during the three months ended March 31, 2022 under the Omnibus Incentive Plan. For RSUs outstanding and unvested as of March 31, 2022, the Company will recognize future compensation expense of $22.7 million over a weighted average remaining vesting period of 3.04 years.
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