WEIBO Corp - 20-F filing on 2022-03-10

Stock-Based Compensation

12 Months Ended

Dec. 31, 2021

7. Stock-Based Compensation

In March 2014, the Company adopted the 2014 Share Incentive Plan (the “2014 Plan”), which included the remaining 4.6 million shares from the terminated 2010 Share Incentive Plan, plus an additional 1.0 million shares. On January 1, 2015, shares in the 2014 Plan, which has a term life of ten years, were allowed a one-time increase in the amount equal to 10% of the total number of Weibo shares issued and outstanding on a fully-diluted basis as of December 31, 2014. Each share in the 2014 Plan pool allows for a grant of a restricted share unit or option share. The Company intends to use such share incentive plan to attract and retain employee talents. Stock-based compensation related to the grants is amortized generally over four years on a straight-line basis (generally one year for performance-based restricted shares).

The following table sets forth the stock-based compensation included in each of the relevant accounts:


	Year Ended December 31,
	2019		2020		2021*

	(In US$ thousands)
Cost of revenues		5,251		5,384		8,112
Sales and marketing		9,828		9,983		15,292
Product development		28,628		33,093		43,622
General and administrative		17,582		18,645		20,970
		61,289		67,105		87,996

*	Excluded non-cash stock-based compensation of US$7.9 million to SINA employees charged through Amount due from SINA in 2021.

The following table sets forth a summary of the number of shares available for issuance:


		Shares Available
		(In thousands)
December 31, 2018		17,293
Addition		—
Granted*		(2,411)
Cancelled/expired/forfeited		222
December 31, 2019		15,104
Addition		—
Granted*		(3,040)
Cancelled/expired/forfeited		431
December 31, 2020		12,495
Addition		—
Granted*		(5,752)
Cancelled/expired/forfeited		692
December 31, 2021		7,435

* For the years ended December 31, 2019, 2020 and 2021, 2.4 million, 2.5 million and 5.8 million restricted share units were granted under the 2014 Plan, respectively. Options of nil, 0.5 million and nil were granted during 2019, 2020 and 2021,respectively.

7. Stock-Based Compensation (Continued)

Stock Options

The following table sets forth a summary of option activities under the Company’s stock option program:


				Weighted Average
	Options	Weighted Average		Remaining	Aggregate
	Outstanding	Exercise Price		Contractual Life	Intrinsic Value
	(In thousands)	(In US$)		(In years)	(In US$ thousands)
December 31, 2018	184		3.45	1.5		10,089
Granted	—		—
Exercised	(95)		3.41
Cancelled/expired/forfeited	—		—
December 31, 2019	89		3.49	0.7		3,799
Granted	482		32.68
Exercised	(16)		3.47
Cancelled/expired/forfeited	(4)		30.96
December 31, 2020	551		28.85	5.8		6,683
Granted	—		—
Exercised	(105)		12.70
Cancelled/expired/forfeited	(59)		32.68
December 31, 2021	387		32.68	5.6		—

Vested and expected to vest as of December 31, 2020	503		28.50	5.7		6,294
Exercisable as of December 31, 2020	72		3.50	0.2		2,707

Vested and expected to vest as of December 31, 2021	351		32.68	5.6		—
Exercisable as of December 31, 2021	82		32.68	5.6		—

The total intrinsic value of options exercised for the years ended December 31, 2019, 2020 and 2021 was US$4.2 million, US$0.5 million and US$4.0 million, respectively. The intrinsic value is calculated as the difference between the market value on the date of exercise and the exercise price of the shares. As reported by the NASDAQ Global Selected Market, the Company’s ending stock price as of December 31, 2020 and 2021 was US$40.99 and US$30.98, respectively. Cash received from the exercise of stock options during the years ended December 31, 2019, 2020 and 2021 was US$0.3 million, US$0.1 million and US$1.3 million, respectively. As of December 31, 2020 and 2021, unrecognized compensation cost (adjusted for estimated forfeitures), related to non-vested stock options granted to the Company’s employees and directors was US$5.4 million and US$3.2 million, respectively. As of December 31, 2021, total unrecognized compensation cost is expected to be recognized over a weighted-average period of 2.7 years and may be adjusted for future changes in estimated forfeitures.

Information regarding stock options outstanding is summarized below:


		Weighted			Weighted		Weighted Average
	Options	Average		Options	Average		Remaining
Range of Exercise Prices	Outstanding	Exercise Price		Exercisable	Exercise Price		Contractual Life
	(In thousands)		(In US$)	(In thousands)		(In US$)	(In years)
As of December 31, 2020
US$ 3.43 - US$3.50	72		3.50	72		3.50	0.2
US$32.68	479		32.68	—		—	—
	551		28.85	72		3.50	0.2
As of December 31, 2021
US$32.68	387		32.68	82		32.68	5.6

7. Stock-Based Compensation (Continued)

Restricted Share Units

Summary of Performance-Based Restricted Share Units

The following table sets forth a summary of performance-based restricted share unit activities:


		Weighted-Average
		Grant Date
	Shares Granted	Fair Value
	(In thousands)	(In US$)
December 31, 2018	4		87.14
Awarded	98		64.33
Vested	(4)		87.14
Cancelled	(39)		69.14
December 31, 2019	59		61.17
Awarded	46		36.49
Vested	(54)		60.16
Cancelled	(34)		36.49
December 31, 2020	17		36.49
Awarded	15		54.08
Vested	(2)		38.78
Cancelled	(19)		40.63
December 31, 2021	11		54.17

As of December 31, 2020 and 2021, there was no material unrecognized compensation cost (adjusted for estimated forfeitures), related to performance-based restricted share units granted to the Company’s employees, respectively.

Summary of Service-Based Restricted Share Units

The following table sets forth a summary of service-based restricted share unit activities:


		Weighted-
		Average
	Shares	Grant Date
	Granted	Fair Value
	(In thousands)	(In US$)
December 31, 2018	2,756		48.62
Awarded	2,313		45.49
Vested	(1,374)		37.60
Cancelled	(183)		48.48
December 31, 2019	3,512		50.89
Awarded	2,512		33.50
Vested	(1,307)		49.12
Cancelled	(393)		44.96
December 31, 2020	4,324		41.86
Awarded	5,737		47.95
Vested	(1,608)		45.66
Cancelled	(614)		44.02
December 31, 2021	7,839		45.37

7. Stock-Based Compensation (Continued)

Restricted Share Units

As of December 31, 2020 and 2021, unrecognized compensation cost (adjusted for estimated forfeitures) was US$139.6 million and US$275.7 million, respectively, which was related to non-vested service-based restricted share units granted to the Company’s employees and directors. As of December 31, 2021, this cost is expected to be recognized over a weighted-average period of 3.3 years. The total fair value based on the vesting date of the restricted share units vested was US$51.7 million, US$64.2 million and US$73.4 million for the years ended December 31, 2019, 2020 and 2021, respectively.