How does Hawthorn Suites By Wyndham measure employee stock-based compensation awards?
Hawthorn_Suites_By_Wyndham Franchise · 2025 FDDAnswer from 2025 FDD Document
In accordance with the guidance for stock-based compensation, the Company measures all employee stock-based compensation awards using a fair value method and records the related expense in its Consolidated Statements of Income.
The Company recognizes the cost of stock-based compensation awards to employees as they provide services, and the expense is recognized ratably over the requisite service period. The requisite service period is the period during which an employee is required to provide services in exchange for an award. Forfeitures are recorded upon the actual employee termination for each outstanding grant.
During 2024, the Company granted incentive equity awards totaling $36 million to key employees and senior officers in the form of RSUs. The RSUs generally vest ratably over a period of four years based on continuous service. Additionally, the Company approved incentive equity awards to key employees and senior officers in the form of PSUs with a maximum grant value of $18 million. The PSUs generally cliff vest on the third anniversary of the grant date based on continuous service with the number of shares earned (0% to 200% of the target award) dependent upon the extent to which the Company achieves certain performance metrics.
Source: Item 23 — RECEIPTS (FDD pages 92–402)
What This Means (2025 FDD)
According to Hawthorn Suites By Wyndham's 2025 Franchise Disclosure Document, the company adheres to specific guidelines for measuring employee stock-based compensation awards. The document states that Hawthorn Suites By Wyndham measures all employee stock-based compensation awards using a fair value method. Following this method, the related expense is then recorded in its Consolidated Statements of Income. This indicates a standardized and recognized approach to valuing and accounting for stock-based compensation.
The cost of these stock-based compensation awards is recognized as employees provide their services. This expense is recognized ratably over the requisite service period, which is defined as the period during which an employee must provide services in exchange for the award. This means that the expense is spread out evenly over the time the employee is expected to work to earn the award. Forfeitures, which occur when an employee leaves the company, are recorded upon the actual employee termination for each outstanding grant. This ensures that the company only accounts for stock-based compensation that is actually earned by employees.
In 2024, Hawthorn Suites By Wyndham granted incentive equity awards totaling $36 million to key employees and senior officers in the form of Restricted Stock Units (RSUs). These RSUs generally vest ratably over a period of four years based on continuous service. Additionally, the company approved incentive equity awards to key employees and senior officers in the form of Performance-vesting Restricted Stock Units (PSUs) with a maximum grant value of $18 million. The PSUs generally cliff vest on the third anniversary of the grant date based on continuous service, with the number of shares earned (0% to 200% of the target award) dependent upon the extent to which the company achieves certain performance metrics. These metrics provide a clear framework for how stock-based compensation is measured and awarded, linking it to both service and company performance.