Stock-Based Compensation and Other Incentive Plans

12 Months Ended

Dec. 31, 2022

Stock-Based Compensation and Other Incentive Plans

Stock-Based Compensation And Other Incentive Plans

18. Stock-Based Compensation and Other Incentive Plans

Under the Company’s 2016 Omnibus Incentive Plan (the “Incentive Plan”), 3.0 million shares of the Company’s common stock were reserved for awards to officers and other selected key management employees of the Company. The Incentive Plan provides the Board of Directors with the flexibility to grant stock options, stock appreciation rights, restricted stock awards, restricted stock units, performance stock or units, phantom stock awards and rights to acquire stock through purchase under a stock purchase program (“Awards”). Awards the Board of Directors elects to pay out in cash do not impact the shares authorized in the Incentive Plan. Shares available for award under the plan were 1.8 million at December 31, 2022.

Restricted Stock Unit Awards

The Company may issue restricted stock and restricted stock units, which require no payment from the employee. Restricted stock cliff-vests at various dates and restricted stock units either vest ratably over or vest at the end of the award’s stated vesting period. Compensation expense is based on the fair value on the grant date and is recorded ratably over the vesting period utilizing the straight-line recognition method. Upon vesting, the employee receives cash compensation equal to the amount of dividends that would have been paid on the underlying shares.

During 2022, the Company granted both time and performance-based awards. The time-based awards vest ratably over a three-year period whereas the performance-based awards vest at the end of three years. The time-based awards’ grant date fair value was determined based on the stock price at the date of grant. The performance-based awards’ grant date fair value was determined using a Black-Scholes Monte Carlo simulation. An historical volatility of 59% was selected for the performance-based award based on comparator companies, and the three-year risk-free rate was derived from yields on U.S. Government bonds. Information regarding the restricted stock units activity and weighted average grant-date fair value follows:

	Time Based Awards			Performance Based Awards
		Weighted			Weighted
		Average			Average
	Restricted	Grant-Date		Restricted	Grant-Date
	Stock Units	Fair Value		Stock Units	Fair Value
(Shares in thousands)
Outstanding at January 1, 2022	429	$	61.60	341	$	53.49
Granted & Reinvested	94		106.27	79		163.31
Forfeited/Canceled	(14)		49.61	(13)		56.04
Vested	(150)		60.62	—		—
Unvested outstanding at December 31, 2022	359	$	74.14	407	$	74.68

The Company recognized expense related to restricted stock units of $27.4 million, $20.5 million and $17.4 million for the years ended December 31, 2022, 2021 and 2020, respectively. As of December 31, 2022, there was $28.8 million of unrecognized share-based compensation expense which is expected to be recognized over a weighted-average period of approximately two years.