Quarterly report pursuant to Section 13 or 15(d)

Equity-Based Compensation and Cash Awards

v3.21.2
Equity-Based Compensation and Cash Awards
9 Months Ended
Sep. 30, 2021
Equity-Based Compensation and Cash Awards  
Equity-Based Compensation and Cash Awards

(9) Equity-Based Compensation and Cash Awards

(a)

Summary of Equity-Based Compensation

The Company’s equity-based compensation includes (i) costs allocated to Antero Midstream by Antero Resources for grants made prior to March 12, 2019 pursuant to the Antero Resources Corporation Long-Term Incentive Plan (the “AR LTIP”) and (ii) costs related to the Antero Midstream Corporation Long-Term Incentive Plan (the “AM LTIP”). Antero Midstream’s equity-based compensation expense is included in general and administrative expenses, and recorded as a credit to the applicable classes of equity.

AR LTIP

Equity-based compensation expense allocated to the Company from Antero Resources was $1.2 million and $0.3 million for the three months ended September 30, 2020 and 2021, respectively and $4.5 million and $1.8 million for the nine months ended September 30, 2020 and 2021, respectively. For grants made prior to March 12, 2019, Antero Resources has total unamortized expense related to its various equity-based compensation plans that can be allocated to the Company of approximately $1.9 million as of September 30, 2021. A portion of this unamortized cost will be allocated to Antero Midstream as it is amortized over the remaining service period of the related awards. The Company does not reimburse Antero Resources for noncash equity compensation allocated to it for awards issued under the AR LTIP or the Antero Resources Corporation 2020 Long-Term Incentive Plan following March 12, 2019.

AM LTIP

The Company is authorized to grant up to 15,398,901 shares of AM common stock to employees and directors under the AM LTIP. The AM LTIP provides for the grant of stock options, stock appreciation rights, restricted stock, restricted stock units (“RSUs”), dividend equivalents, other stock-based awards, cash awards and substitute awards. The terms and conditions of the awards granted are established by the compensation committee of the Board of Directors (the “Board”). As of September 30, 2021, a total of 10,041,012 shares were available for future grant under the AM LTIP. The Company recognized expense related to these awards, which does not include expense for the Company’s performance share unit (“PSU”) awards, of $2.3 million and $2.8 million for the three months ended September 30, 2020 and 2021, respectively, and $5.0 million and $7.9 million for the nine months ended September 30, 2020 and 2021, respectively.

(b)

Restricted Stock Unit Awards

A summary of the RSU awards activity during the nine months ended September 30, 2021 is as follows:

Weighted Average

Number

Grant Date

    

of Units

    

Fair Value

Total AM LTIP RSUs awarded and unvested—December 31, 2020

3,314,955

$

8.09

Granted

1,791,444

8.71

Vested

(1,267,750)

9.07

Forfeited

(221,710)

7.36

Total AM LTIP RSUs awarded and unvested—September 30, 2021

3,616,939

$

8.10

As of September 30, 2021, unamortized expense of $24.1 million related to the unvested RSUs is expected to be recognized over a weighted average period of approximately 2.8 years and the Company’s proportionate share will be allocated to it as it is recognized.

(c)

Performance Share Unit Awards

Performance Share Unit Awards Based on Return on Invested Capital

The likelihood of achieving the performance conditions related to return on invested capital for the PSU awards outstanding was probable for the three and nine months ended September 30, 2020 and 2021. The Company recognized expense of $0.1 million for both the three months ended September 30, 2020 and 2021, and $0.2 million and $0.7 million for the nine months ended September 30, 2020 and 2021, respectively. As of September 30, 2021, there was $0.3 million of unamortized equity-based compensation expense related to unvested PSUs that is expected to be recognized over a weighted average period of 0.5 years.

(d)

Cash Awards

In January 2020, the Company granted cash awards of $2.2 million to certain executives under the AM LTIP that vest ratably over a period of up to three years. In July 2020, the Company granted additional cash awards of $0.7 million to certain non-executive employees under the AM LTIP that vest ratably over a period of four years. The compensation expense for these awards is recognized ratably over the applicable vesting period. As of December 31, 2020 and September 30, 2021, the Company has recorded $1.8 million and $1.0 million, respectively, in other liabilities in the condensed consolidated balance sheets related to unvested cash awards.