LPL Financial Holdings Inc
For the period ended Sep 30, 2024. Filed Nov 4, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 4, 2024
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12 - S
NOTE 12 -SHARE-BASED COMPENSATION
In May 2021, the Company adopted its 2021 Omnibus Equity Incentive Plan (the “2021 Plan”), which provides for the granting of stock options, warrants, restricted stock awards, restricted stock units, deferred stock units, performance stock units and other equity-based compensation to the Company’s employees, non-employee directors and other service providers. The 2021 Plan serves as the successor to the Company’s 2010 Omnibus Equity Incentive Plan (the “2010 Plan”). Following the adoption of the 2021 Plan, the Company is no longer making grants under the 2010 Plan, and the 2021 Plan is the only plan under which equity awards are granted. However, awards previously granted under the 2010 Plan will remain outstanding until vested, exercised or forfeited, as applicable.
There were 17,754,197 shares authorized for grant under the 2021 Plan and 11,682,952 shares remaining available for future issuance at September 30, 2024.
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LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIESNotes to Condensed Consolidated Financial Statements (Unaudited)
Stock Options and Warrants
The Company has not granted stock options or warrants since 2019. The following table summarizes the Company’s stock option and warrant activity as of and for the nine months ended September 30, 2024:
| Number ofShares | Weighted-AverageExercise Price | Weighted-AverageRemainingContractual Term(Years) | AggregateIntrinsicValue(In thousands) | |
|---|---|---|---|---|
| Outstanding — December 31, 2023 | 546,820 | $54.81 | ||
| Granted | — | $— | ||
| Exercised | (138,012) | $47.17 | ||
| Forfeited and Expired | — | $— | ||
| Outstanding — September 30, 2024 | 408,808 | $57.39 | 3.06 | $71,639 |
| Exercisable — September 30, 2024 | 408,808 | $57.39 | 3.06 | $71,639 |
| Exercisable and expected to vest — September 30, 2024 | 408,808 | $57.39 | 3.06 | $71,639 |
The following table summarizes information about outstanding stock options and warrants as of September 30, 2024:
| Outstanding · Exercisable | |||||
|---|---|---|---|---|---|
| Range of Exercise Prices | Number ofShares | Weighted-AverageExercisePrice | Weighted-AverageRemaining Life(Years) | Number ofShares | Weighted-AverageExercisePrice |
| $19.85 - $25.00 | 58,581 | $19.85 | 1.40 | 58,581 | $19.85 |
| $25.01 - $35.00 | — | $— | 0.00 | — | $— |
| $35.01 - $45.00 | 81,863 | $39.48 | 2.33 | 81,863 | $39.48 |
| $45.01 - $65.00 | 6,332 | $45.55 | 0.43 | 6,332 | $45.55 |
| $65.01 - $75.00 | 127,691 | $65.50 | 3.23 | 127,691 | $65.50 |
| $75.01 - $80.00 | 134,341 | $77.53 | 4.19 | 134,341 | $77.53 |
| 408,808 | $57.39 | 3.06 | 408,808 | $57.39 | |
The Company recognizedno share-based compensation expense related to the vesting of stock options awarded to employees and officers during the three and nine months ended September 30, 2024 and 2023. As of September 30, 2024, there was no unrecognized compensation cost related to non-vested stock options.
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LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIESNotes to Condensed Consolidated Financial Statements (Unaudited)
Restricted Stock and Stock Units
The following summarizes the Company’s activity in its restricted stock awards and stock units, which include restricted stock units, deferred stock units and performance stock units, as of and for the nine months ended September 30, 2024:
| Restricted Stock Awards · Stock Units | |||||
|---|---|---|---|---|---|
| Number ofShares · Weighted-AverageGrant-DateFair Value · Number ofUnits · Weighted-AverageGrant-DateFair Value | |||||
| Outstanding — December 31, 2023 | 1,568 | $187.93 | 776,604 | $205.75 | |
| Granted | 7,803 | $268.64 | 446,038 | $258.59 | |
| Vested | (3,080) | $227.55 | (400,116) | $189.00 | |
| Forfeited | — | $— | (57,183) | $251.81 | |
| Outstanding — September 30, 2024 | 6,291 | $268.64 | 765,343 | (1) | $241.87 |
| Expected to vest — September 30, 2024 | 6,291 | $268.64 | 605,629 | $263.93 | |
(1) Includes 96,085 vested and undistributed deferred stock units.
The Company grants restricted stock awards and deferred stock units to its directors and restricted stock units and performance stock units to its employees and officers. Restricted stock awards and stock units must vest or are subject to forfeiture; however, restricted stock awards are included in shares outstanding upon grant and have the same dividend and voting rights as the Company’s common stock. The Company recognized $17.5 million and $13.5 million of share-based compensation expense related to the vesting of these restricted stock awards and stock units during the three months ended September 30, 2024 and 2023, respectively and $55.1 million and $44.3 million during the nine months ended September 30, 2024 and 2023, respectively. As of September 30, 2024, total unrecognized compensation cost for restricted stock awards and stock units was $98.9 million, which is expected to be recognized over a weighted-average remaining period of 1.94 years.
The Company also grants restricted stock units to its advisors and to institutions. The Company recognized share-based compensation expense of $0.7 million related to the vesting of these awards during both the three months ended September 30, 2024 and 2023, and $2.1 million and $2.0 million during the nine months ended September 30, 2024 and 2023, respectively. As of September 30, 2024, total unrecognized compensation cost for restricted stock units granted to advisors and institutions was $8.1 million, which is expected to be recognized over a weighted-average remaining period of 2.51 years.
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