Quarterly report pursuant to Section 13 or 15(d)

Share-Based Compensation and Other Benefit Plans

v3.22.2.2
Share-Based Compensation and Other Benefit Plans
9 Months Ended
Sep. 30, 2022
Share-Based Payment Arrangement [Abstract]  
Share-Based Compensation and Other Benefit Plans
Note 13 – Share-Based Compensation and Other Benefit Plans
Share-Based Compensation
We reserved 4,424,600 shares of Class A Common Stock for issuance under the Ranger Oil Management Incentive Plan (the “Plan”) for share-based compensation awards. A total of 811,573 time-vested restricted stock units (“RSUs”) and 664,414 performance-based restricted stock units (“PRSUs”) have been granted to employees and directors through September 30, 2022.
We recognized expense attributable to the RSUs and PRSUs of $1.3 million and $4.3 million for the three and nine months ended September 30, 2022, respectively. During the three months ended September 30, 2021, we recognized $1.0 million of expense attributable to the RSUs and PRSUs and during the nine months ended September 30, 2021, we recognized $4.2 million of expense attributable to the RSUs and PRSUs, including approximately $1.9 million as a result of a change-in-control event associated with the Juniper Transactions. We recognize share-based compensation expense as a component of G&A expenses in our condensed consolidated statements of operations.
Time-Vested Restricted Stock Units
The table below summarizes activity for the nine months ended September 30, 2022 with respect to awarded RSUs:
Time-Vested
Restricted Stock
Units
Weighted-Average
Grant Date
Fair Value
Balance at January 1, 2022
230,517  $ 9.20 
Granted 49,314  $ 35.07 
Vested (111,479) $ 10.02 
Forfeited (16,101) $ 12.12 
Balance at September 30, 2022
152,251  $ 17.50 
Compensation expense for RSUs is recognized on a straight-line basis over the applicable vesting period, which is generally over a three-year period. As of September 30, 2022, we had $2.0 million of unrecognized compensation cost attributable to RSUs. We expect that cost to be recognized over a weighted-average period of 1.89 years.
Performance-Based Restricted Stock Units
The table below summarizes activity for the nine months ended September 30, 2022 with respect to awarded PRSUs:
Performance Restricted Stock
Units
Weighted-Average
Grant Date
Fair Value
Balance at January 1, 2022
345,069  $ 16.20 
Granted 180,217  $ 47.77 
Vested (2,688) $ 18.24 
Forfeited (11,516) $ 23.31 
Balance at September 30, 2022
511,082  $ 27.16 
Compensation expense for PRSUs with a market condition is being charged to expense on a straight-line basis for the 2022 and 2021 grants and graded-vesting for the 2020 and 2019 grants, over a range of less than one to three years. Compensation expense for PRSUs with a performance condition is recognized on a straight-line basis over three years when it is considered probable that the performance condition will be achieved and such grants are expected to vest. PRSUs with a market condition do not allow for the reversal of previously recognized expense, even if the market condition is not achieved and no shares ultimately vest.
The 2022 and 2021 PRSU grants contain performance measures of which 50% are based on the Company’s return on average capital employed (“ROCE”) and 50% are based on the Company’s absolute total shareholder return and total shareholder return (“TSR”) relative to a defined peer group over the three-year performance period. The 2022 and 2021 PRSUs cliff vest from 0% to 200% of the original grant at the end of a three-year performance period based on satisfaction of the respective underlying conditions.
Vesting of PRSUs granted in 2020 and 2019 range from 0% to 200% of the original grant based on TSR relative to a defined peer group over the three year performance period. As TSR is deemed a market condition, the grant-date fair value for the 2019, 2020 and a portion of the 2021 and 2022 grants is derived by using a Monte Carlo model. The ranges for the assumptions used in the Monte Carlo model for the PRSUs granted during 2022, 2021, 2020 and 2019 are presented as follows:
2022
2021 1
2020 1
2019
Expected volatility
134.98% to 138.75%
131.74% to 134.74%
101.32% to 117.71%
49.9  %
Dividend yield 0.0  % 0.0  % 0.0  % 0.0  %
Risk-free interest rate 2.59  %
0.22% to 0.29%
0.18% to 0.51%
1.66  %
Performance period 2022-2024 2021-2023 2020-2022 2020-2022
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1    One executive officer’s inducement award originally granted in August 2020 was amended in April 2021 to conform vesting conditions to other PRSU awards granted in 2021. The Monte Carlo assumptions for both years are included above.
As of September 30, 2022, we had $9.2 million of unrecognized compensation cost attributable to PRSUs. We expect that cost to be recognized over a weighted-average period of 1.93 years.
Other Benefit Plans
We maintain the Penn Virginia Corporation and Affiliated Companies Employees 401(k) Plan (the “401(k) Plan”), a defined contribution plan, which covers substantially all of our employees. We recognized expense attributable to the 401(k) Plan of $0.1 million and $0.5 million for the three and nine months ended September 30, 2022, respectively, and $0.2 million and $0.5 million for the three and nine months ended September 30, 2021, respectively. The charges for the 401(k) Plan are recorded as a component of G&A expenses in our condensed consolidated statements of operations.
We maintain unqualified legacy defined benefit pension and defined benefit postretirement plans that cover a limited number of former employees, all of whom retired prior to January 1, 2000. The combined expense recognized with respect to these plans was less than $0.1 million for each of the three and nine months ended September 30, 2022 and 2021. The charges for these plans are recorded as a component of Other income (expense) in our condensed consolidated statements of operations.