How many Aplus Phantom Common Units were forfeited during 2022?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
31, 2023, which are expected to be recognized over a weighted average period of 4 years. The fair value of unvested phantom units outstanding as of December 31, 2023 and 2022, totaled $96 million and $79 million, respectively.
Phantom unit award activity for the years ended December 31, 2023 and 2022 consisted of the following:
| Number of Phantom Common Units | Weighted Average Grant Date Fair Value | |
|---|---|---|
| Outstanding at December 31, 202 |
Source: Item 22 — CONTRACTS (FDD page 68)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, 107,956 Phantom Common Units were forfeited during 2022. The weighted average grant date fair value of these forfeited units was $30.31. These forfeitures contribute to the overall changes in the number of outstanding phantom common units, which decreased from 2,014,288 at the end of 2021 to 1,821,773 at the end of 2022.
Phantom units are a form of compensation Aplus uses for its employees and non-employee directors. These units vest over time, specifically 60% after three years and 40% after five years. Even before vesting, holders of these phantom units have the right to receive distributions. The forfeiture of these units can occur for various reasons, such as an employee leaving the company before the units fully vest.
The information regarding phantom unit activity is important for prospective franchisees as it provides insight into Aplus's compensation structure and potential equity dilution. Understanding the number of units forfeited can help in assessing the stability of Aplus's workforce and the overall financial health of the company. The fair value of these units is based on the market price of Aplus's common units on the grant date, which is amortized over the vesting period.