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Equity Incentive Plans
 12 Months Ended
Dec. 31, 2021
Share-based Payment Arrangement [Abstract]  
Equity Incentive Plans Stock-Based CompensationIn order to attract and retain employees, non-employee directors, consultants, and other persons associated with the Company, we grant equity-based awards under the LKQ Corporation 1998 Equity Incentive Plan (the “Equity Incentive Plan”). The total number of shares approved by stockholders for issuance under the Equity Incentive Plan is 70 million shares, subject to antidilution and other adjustment provisions. We have granted restricted stock units ("RSUs"), stock options, and restricted stock under the Equity Incentive Plan. Of the shares approved by stockholders for issuance under the Equity Incentive Plan, 9 million shares remained available for issuance as of December 31, 2021. We expect to issue new or treasury shares of common stock to cover past and future equity grants.
RSUs

The RSUs we have issued vest over periods of up to five years, subject to a continued service condition. Currently outstanding RSUs (other than PSUs, which are described below) contain either a time-based vesting condition or a combination of a performance-based vesting condition and a time-based vesting condition, in which case both conditions must be met before any RSUs vest. For all of the RSUs containing a performance-based vesting condition, we must report positive diluted earnings per share, subject to certain adjustments, during any fiscal year period within five years following the grant date. Each RSU converts into one share of LKQ common stock on the applicable vesting date. The grant date fair value of RSUs is based on the market price of LKQ stock on the grant date.

Starting with our 2019 grants, participants who are eligible for retirement (defined as a voluntary separation of service from the Company after the participant has attained at least 60 years of age and completed at least five years of service) will continue to vest in their awards following retirement; if retirement occurs during the first year of the vesting period (for RSUs subject to a time-based vesting condition) or the first year of the performance period (for RSUs with a performance-based vesting condition), the participant vests in a prorated amount of the RSU grant based on the portion of the year employed. For our RSU grants prior to 2019, participants forfeit their unvested shares upon retirement.

Outstanding unvested RSUs earn dividend equivalents at the same rate as dividends on LKQ’s common stock. The dividend equivalents are subject to the same vesting requirements, restrictions and forfeiture provisions as the original award.

The Compensation Committee of our Board of Directors (the "Compensation Committee") approved the grant of 208,603, 230,360, and 270,388 RSUs to our executive officers that included both a performance-based vesting condition and a time-based vesting condition in 2021, 2020, and 2019, respectively. The performance-based vesting conditions for the 2021, 2020, and 2019 grants to our executive officers have been satisfied.

The fair value of RSUs that vested during the years ended December 31, 2021, 2020, and 2019 was $37 million, $27 million, and $22 million, respectively; the fair value of RSUs vested is based on the market price of LKQ stock on the date vested.

The following table summarizes activity related to our RSUs under the Equity Incentive Plan for the year ended December 31, 2021:
Number
Outstanding		Weighted Average Grant Date Fair ValueWeighted Average Remaining Contractual Term (in years)
Aggregate Intrinsic Value (in thousands) (1)
Unvested as of January 1, 20211,479,672 $31.71 
Granted (2)
738,014 $39.22 
Vested(805,529)$33.11 
Forfeited / Canceled(55,078)$34.39 
Unvested as of December 31, 20211,357,079 $34.85 
Expected to vest after December 31, 20211,180,689 $34.84 2.6$70,877 
(1) The aggregate intrinsic value of expected to vest RSUs represents the total pretax intrinsic value (the fair value of LKQ's stock on the last day of the period multiplied by the number of units) that would have been received by the holders had all the expected to vest RSUs vested. This amount changes based on the market price of LKQ’s common stock.
(2) The weighted average grant date fair value of RSUs granted during the years ended December 31, 2020 and 2019 was $31.68 and $27.82, respectively.

Starting in 2019, we granted performance-based three-year RSUs ("PSUs") to certain employees, including executive officers, under our Equity Incentive Plan. As these awards are performance-based, the exact number of shares to be paid out may be up to twice the grant amount, depending on our performance and the achievement of certain performance metrics (adjusted earnings per share, average organic parts and services revenue growth, and average return on invested capital) over the applicable three year performance periods.

Outstanding unvested PSUs earn dividend equivalents at the same rate as dividends on LKQ's common stock. The dividend equivalents are subject to the same vesting requirements, restrictions and forfeiture provisions as the original award.
The following table summarizes activity related to our PSUs under the Equity Incentive Plan for the year ended December 31, 2021:
Number
Outstanding		Weighted Average Grant Date Fair ValueWeighted Average Remaining Contractual Term (in years)
Aggregate Intrinsic Value (in thousands) (1)
Unvested as of January 1, 2021291,601 $29.98 
Granted (2)
125,656 $38.31 
Performance-based adjustment (3)
52,562 $27.72 
Forfeited / Canceled(11,800)$31.77 
Unvested as of December 31, 2021458,019 $31.96 
Expected to vest after December 31, 2021447,595 $32.01 1.0$26,869 
(1)     The aggregate intrinsic value of expected to vest PSUs represents the total pretax intrinsic value (the fair value of LKQ's stock on the last day of each period multiplied by the number of units) that would have been received by the holders had all the expected to vest PSUs vested. This amount changes based on the market price of LKQ’s common stock and the achievement of the performance metrics relative to the established targets.
(2)    Represents the number of PSUs at target payout. The weighted average grant date fair value of PSUs granted during the years ended December 31, 2020 and 2019 was $31.85 and $27.69, respectively.
(3)    Represents the net adjustment to the number of shares issuable upon vesting of performance-based PSUs based on the Company's actual financial performance metrics for the three year performance period ended December 31, 2021.

Stock Options

Stock options vested over periods of up to five years, subject to a continued service condition. Stock options expired either six years or ten years from the date they were granted. No options were outstanding as of December 31, 2021 or 2020.

Stock-Based Compensation Expense

For the RSUs that contain both a performance-based vesting condition and a time-based vesting condition, we recognize compensation expense under the accelerated attribution method, pursuant to which expense is recognized over the requisite service period for each separate vesting tranche of the award. During the years ended December 31, 2021, 2020, and 2019, we recognized $7 million, $11 million, and $11 million, respectively, of stock based compensation expense related to the RSUs containing a performance-based vesting condition. For all other awards, which are subject to only a time-based vesting condition, we recognize compensation expense on a straight-line basis over the requisite service period of the entire award. The PSU expense is calculated using the projected award value, which is based on an estimate of the achievement of the performance objectives, and is recognized on a straight-line basis over the performance period. Forfeitures on RSUs and PSUs are recorded as they occur.

Pre-tax stock-based compensation expense for RSUs and PSUs totaled $34 million, $29 million, and $28 million for the years ended December 31, 2021, 2020, and 2019, respectively.

The following table sets forth the classification of total stock-based compensation expense included in the Consolidated Statements of Income for our continuing operations (in thousands):
Year Ended December 31,
 202120202019
Cost of goods sold$649 $506 $477 
Selling, general and administrative expenses33,087 28,572 27,218 
Total stock-based compensation expense33,736 29,078 27,695 
Income tax benefit(7,479)(6,614)(6,227)
Total stock-based compensation expense, net of tax
$26,257 $22,464 $21,468 

We did not capitalize any stock-based compensation costs during the years ended December 31, 2021, 2020, and 2019.
As of December 31, 2021, unrecognized compensation expense related to unvested RSUs and PSUs is expected to be recognized as follows (in thousands):
Unrecognized Compensation Expense
2022$21,325 
202313,169 
20246,040 
20253,039 
2026177 
Total unrecognized compensation expense$43,750 

Stock-based compensation expense related to these awards will be different to the extent that forfeitures are realized and performance under the PSUs differs from current achievement estimates.