Wyndham Hotels & Resorts, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Stock-Based Compensation

Stock-Based Compensation

9 Months Ended

Sep. 30, 2023

Share-Based Payment Arrangement [Abstract]


13. 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/or other stock-based awards to key employees and non-employee directors. 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 September 30, 2023, 4.8 million shares remained available.

During 2023, the Company granted incentive equity awards totaling $28 million to key employees and senior officers in the form of RSUs. The RSUs generally vest ratably over a period of four years based on continuous service. Additionally, the Company approved incentive equity awards to key employees and senior officers in the form of PSUs with a maximum grant value of $19 million. The PSUs generally cliff vest on the third anniversary of the grant date based on continuous service with the number of shares earned (0% to 200% of the target award) dependent upon the extent the Company achieves certain performance metrics.

Incentive Equity Awards Granted by the Company

The activity related to the Company’s incentive equity awards for the nine months ended September 30, 2023 consisted of the following:


	RSUs				PSUs
	Number of RSUs		Weighted Average Grant Price		Number of PSUs		Weighted Average Grant Price
Balance as of December 31, 2022	1.0		$	67.90	0.3		$	69.82
Granted (a)	0.4		77.17		0.3	(b)	77.45
Vested	(0.4)		63.42		—		—
Canceled	—		—		(0.1)		53.40
Balance as of September 30, 2023	1.0	(c)	$	72.67	0.5	(d)	$	76.56

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(a)Represents awards granted by the Company primarily in March 2023.

(b)Represents awards granted by the Company at the maximum achievement level of 200% of target payout. Actual shares that may be issued can range from 0% to 200% of target.

(c)RSUs outstanding as of September 30, 2023 have an aggregate unrecognized compensation expense of $53 million, which is expected to be recognized over a weighted average period of 2.6 years.

(d)PSUs outstanding as of September 30, 2023 have an aggregate maximum potential unrecognized compensation expense of $25 million, which may be recognized over a weighted average period of 2.1 years based on attainment of targets.

There were no stock options granted in 2023 or 2022. The activity related to stock options for the nine months ended September 30, 2023 consisted of the following:


	Number of Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)	Aggregate Intrinsic Value (in millions)
Outstanding as of December 31, 2022	1.0		$	55.90
Granted	—		—
Exercised	—		—
Canceled	—		—

Outstanding as of September 30, 2023	1.0		$	55.89	2.9	$	14
Unvested as of September 30, 2023	0.1	(a)	$	56.47	2.7	$	2
Exercisable as of September 30, 2023	0.9		$	55.79	3.0	$	12

______________________

(a)Unvested options as of September 30, 2023 are expected to vest over time and have an aggregate unrecognized compensation expense of $1 million, which will be recognized over a weighted average period of 1.0 year.

Stock-Based Compensation Expense

Stock-based compensation expense was $10 million and $8 million for the three months ended September 30, 2023 and 2022, and $28 million and $25 million for the nine months ended September 30, 2023 and 2022, respectively.