Stock-Based Compensation |
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Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation |
The Company has a stock-based compensation plan available to grant non-qualified stock options, incentive stock options, stock-settled appreciation rights (“SSARs”), RSUs, performance-vesting restricted stock units (“PSUs”) and other stock-based awards to key employees, non-employee directors, advisors and consultants. Under the Wyndham Hotels & Resorts, Inc. 2018 Equity and Incentive Plan (“Stock Plan”), which became effective on May 14, 2018, a maximum of 10.0 million shares of common stock may be awarded. As of June 30, 2021, 5.4 million shares remained available.
Incentive equity awards granted by the Company
The Company's Board of Directors approved incentive equity award grants to the Company's employees in the form of RSUs, stock options and PSUs.
The activity related to the Company’s incentive equity awards for the six months ended June 30, 2021 consisted of the following:
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(a)Represents awards granted by the Company primarily in February 2021.
(b)RSUs outstanding as of June 30, 2021 are expected to vest over time and have an aggregate unrecognized compensation expense of $61 million, which is expected to be recognized over a weighted average period of 2.9 years.
(c)PSUs outstanding as of June 30, 2021 are expected to vest over time and have an aggregate maximum potential unrecognized compensation expense of $15 million, which may be recognized over a weighted average period of 1.7 years based on attainment of targets.
The activity related to stock options granted by the Company for the six months ended June 30, 2021 consisted of the following:
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(a)Unvested options as of June 30, 2021 are expected to vest over time and have an aggregate unrecognized compensation expense of $19 million, which will be recognized over a weighted average period of 2.4 years.
The fair value of stock options granted by the Company during 2021 and 2020 were estimated on the date of the grant using the Black-Scholes option-pricing model with the relevant assumptions outlined in the table below. Expected volatility is based on both historical and implied volatilities of the stock for both Wyndham Hotels and comparable companies over the estimated expected life of the options. The expected life represents the period of time the options are expected to be outstanding. The risk-free interest rate is based on yields on U.S. Treasury strips with a maturity similar to the estimated expected life of the options. The projected dividend yield was based on the Company’s anticipated annual dividend divided by the price of the Company’s stock on the date of the grant.
Stock-based compensation expense
Stock-based compensation expense was $8 million and $6 million for the three months ended June 30, 2021 and 2020, respectively. For the three months ended June 30, 2020, $1 million was recorded within restructuring costs on the Condensed Consolidated Statements of Income/(Loss). Further, stock-based compensation expense was $13 million and $10 million for the six months ended June 30, 2021 and 2020, respectively. For the six months ended June 30, 2020, $1 million was recorded within restructuring costs on the Condensed Consolidated Statements of Income/(Loss).
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