Share-Based Compensation |
11.Share-Based Compensation The Company’s 2021 Incentive Equity Plan (the “Plan”) provides that the aggregate number of common shares reserved for future issuance under the Plan as of March 31, 2024, is 56,634,518 common shares, including 12,262,348 shares added to the Plan in January 2024 pursuant to the Plan’s automatic annual increase provision, provided that 2,243,853 of the outstanding common shares shall only be available for awards made to non-employee directors of the Company. On the first day of each fiscal year from 2022 to 2031, the number of common shares that may be issued pursuant to the Plan is automatically increased by an amount equal to the lesser of 4% of the number of outstanding common shares or an amount determined by the board of directors. Stock options As at March 31, 2024, there were 14,954,240 stock options outstanding under the Company’s Short-Term Incentive Plan (“STIP”) and 9,644,874 stock options outstanding under the Company’s Long-Term Incentive Plan (“LTIP”). The Company makes awards under the STIP and LTIP under its equity incentive plans in effect at the time of the award, which is currently the Plan. A continuity schedule summarizing the movements in the Company’s stock options under the STIP and LTIP plans is as follows: | | | | | | | Number of | | Number of | | | Options | | Options | | | Outstanding | | Outstanding | | | under STIP | | under LTIP | Outstanding – December 31, 2022 | | 15,356,340 | | 9,783,922 | Expired | | (162,100) | | — | Exercised | | (120,000) | | — | Outstanding – December 31, 2023 | | 15,074,240 | | 9,783,922 | Forfeited | | — | | (139,048) | Exercised | | (120,000) | | — | Outstanding – March 31, 2024 | | 14,954,240 | | 9,644,874 |
During the three months ended March 31, 2024, the Company recognized $47 thousand of share-based compensation expense for stock options (issued under STIP plans) in the statement of loss and comprehensive loss (three months ended March 31, 2023: $0.2 million). For the three months ended March 31, 2024, a total of $14 thousand of this share-based compensation expense was related to exploration and evaluation activities (three months ended March 31, 2023 - $0.1 million). The amount of this share-based compensation expense recognized related to general and administrative matters for three months ended March 31, 2024, was $33 thousand (three months ended March 31, 2023 - $0.1 million). During the three months ended March 31, 2024, the Company reversed $0.6 million of previously recognized share-based compensation expense to record the forfeiture of unvested stock options (issued under LTIP plans) in the statement of loss and comprehensive loss (three months ended March 31, 2023: $nil) evenly apportioned between exploration and evaluation expenses (Note 8) and general and administration expenses. Restricted Share Units (“RSU”) The Company may, from time to time, grant RSUs to directors, officers, employees, and consultants of the Company and its subsidiaries under the Plan. On each vesting date, RSU holders are issued common shares equivalent to the number of RSUs held provided the holder is providing service to the Company on such vesting date. A summary of the RSU activity during the three months ended March 31, 2024 is presented in the table below: | | | | | Number of RSUs | | | Outstanding | Outstanding – December 31, 2023 | | 12,484,880 | Granted | | 10,962,024 | Forfeited | | (226,054) | Exercised | | (7,112,673) | Outstanding – December 31, 2024 | | 16,108,177 |
The details of RSUs granted by the Company during the three months ended March 31, 2024 are as follows: | | | | | | | Three months | | Three months | | | ended March 31, | | ended March 31, | Vesting Period | | 2024 | | 2023 | Vesting Immediately(1)(2) | | 3,800,435 | | 3,237,710 | Vesting fully on the first anniversary of the grant date | | 17,241 | | — | Vesting in thirds on each anniversary of the grant date(3) | | 7,144,348 | | 8,683,486 | Vesting in fourths on each anniversary of the grant date | | — | | 343,750 | Total Units Granted | | 10,962,024 | | 12,264,946 |
| 1. | Of the 3,800,435 RSUs vesting immediately on grant date, 2,812,802 RSUs were issued to settle liabilities with a carrying amount of $4.1 million, at a weighted average grant date fair value of $1.44 per RSU. |
| 2. | During the three months ended March 31, 2024, the Company granted 46,333 RSUs to consultants (three months ended March 31, 2023: 23,438 RSUs) resulting in $84 thousand, charged as general and administrative expenses for the three months ended March 31, 2024 (three months ended March 31, 2023: $23 thousand of general and administrative expenses). During the three months ended March 31, 2024, the Company also granted 27,323 RSUs to consultants as a prepayment for their services (three months ended March 31, 2023: nil). |
| 3. | During the three months ended March 31, 2024, the Company granted 7,144,348 RSUs, as payment for the 2023 LTIP awards (three months ended March 31, 2023: 8,645,465 RSUs were issued as payment for the 2022 LTIP awards). |
The grant date fair value of RSUs is equivalent to the closing share price of the Company’s common shares on the date of grant. During the three months ended March 31, 2024, a total of $3.2 million was charged to the statement of loss and comprehensive loss as share-based compensation expense for RSUs (three months ended March 31, 2023: $1.6 million). Share-based compensation expense for RSUs totaling $2 million related to general and administration matters was charged to the statement of loss and comprehensive loss for the three months ended March 31, 2024 (three months ended March 31, 2023: $0.7 million). The Company recorded a total of $1.2 million of share-based compensation expense for RSUs related to exploration and evaluation activities for the three months ended March 31, 2024 (three months ended March 31, 2023: $0.9 million). As at March 31, 2024, total unrecognized share-based compensation expense for RSUs was $14.8 million (December 31, 2023 - $6.9 million). As at March 31, 2024, an aggregate of 402,922 vested RSUs were being processed and due to be converted into common shares. Employee Stock Purchase Plan On May 31, 2022, TMC’s 2021 Employee Stock Purchase Plan (“ESPP”) was approved at the Company’s 2022 annual shareholders meeting. As of March 31, 2024, there were 10,998,032 common shares reserved for issuance under the ESPP. This included 3,065,587 shares added to the ESPP in January 2024 pursuant to the ESPP’s automatic annual increase provision. Under the ESPP, the number of shares reserved for issuance is subject to an annual increase provision which provides that on the first day of each of the Company’s fiscal years starting in 2022, common shares equal to the lesser of (i) 1% percent of the common shares outstanding on the last day of the immediately preceding fiscal year, or (ii) such lesser number of shares as is determined by the board of directors will be added to the ESPP. During the first quarter of 2024, a total of $18 thousand (three months ended March 31, 2023: $19 thousand) was charged to the statement of loss and comprehensive loss as share-based compensation expense, representing the share price purchase discount offered by the Company. From the amount charged during the three months ended March 31, 2024, $9 thousand was recorded in exploration and evaluation expenses (three months ended March 31,2023: $7 thousand) and $9 thousand was recorded in general and administrative expenses (three months ended March 31,2023: $12 thousand).
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