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Share-Based Compensation
 12 Months Ended
Dec. 31, 2023
Share-Based Payment Arrangement [Abstract]  
Share-Based Compensation
(12) Share-Based Compensation

Overview

CVR Energy and CVR Partners have Long-Term Incentive Plans (collectively, the “LTIPs”) that permit the granting of options, stock and unit appreciation rights, restricted shares, restricted stock units, phantom units, unit awards, substitute awards, other unit-based awards, cash awards, dividend and distribution equivalent rights, share awards, and performance awards (including performance share units, performance units, and performance-based restricted stock). Individuals who are eligible to receive awards and grants under or in connection with the LTIPs include the employees, officers, and directors of the Company and CVR Partners. The Company had 6.8 million and 0.5 million shares available for future grants under the CVR Energy LTIP and CVR Partners LTIP, respectively, at December 31, 2023.

Incentive and Phantom Unit Awards

Incentive and phantom unit awards that have been granted to officers, employees, and directors (collectively, the “Share-Based Awards”) reflect the value of shares or units and dividends or distributions of CVR Energy or CVR Partners, as applicable. Each Share-Based Award and the related dividend or distribution equivalent right represents the right to receive, upon vesting, a cash payment equal to (i) the average fair market value of one share or unit, as applicable, in accordance with the award agreement, plus (ii) the per share or unit cash value of all dividends or distributions declared and paid, as applicable, from the grant date through the vesting date, subject to the terms of the applicable award agreement. The Share-Based Awards are generally graded-vesting awards, which vest over three years with one-third of the award vesting each year provided the grantee remains employed by the Company or its subsidiaries on the applicable vesting date. Compensation expense is recognized ratably, based on service provided to the Company and its subsidiaries, with the amount recognized fluctuating as a result of the Share-Based Awards being remeasured to fair value at the end of each reporting period due to their liability-award classification.

A summary of activity for the Company’s Share-Based Awards for the year ended December 31, 2023 is presented below:
Shares or Units (1)
Weighted-Average Grant-Date Fair Value
(per share or unit)
Aggregate Intrinsic Value
(in millions)
Non-vested at December 31, 20221,738,620 $22.97 $68 
Granted776,684 33.12 
Vested(1,018,432)19.81 
Forfeited(57,967)24.61 
Non-vested at December 31, 20231,438,905 $30.67 $47 
(1)As of December 31, 2023, there are no outstanding awards under the LTIPs, and the only outstanding and unvested awards are issued in connection with and not under the LTIPs.
Performance Unit Awards

Pursuant to the amended employment agreement, effective December 22, 2021, with the Company’s current chief executive officer, the Company amended the performance award agreement (the “CEO Performance Award”). The CEO Performance Award represents the right to receive upon vesting, a cash payment equal to $10 million if the average closing price of the Company’s common stock over the 30-day trading period from January 6, 2025 through February 20, 2025 is equal to or greater than $60 per share. Under the CEO Performance Award, as of December 31, 2023 and 2022, the Company had no outstanding liability.

Compensation Expense

A summary of total share-based compensation expense and unrecognized compensation expense related to the Share-Based Awards and the Company’s performance awards during the years ended December 31, 2023, 2022, and 2021 is presented below:
ExpensesUnrecognized Expense
For the year ended December 31,At December 31, 2023
(in millions)202320222021AmountWeighted-Average Remaining Years
Share-Based Awards:
Incentive Units$28 $45 $22 $32 1.7
CVR Partners - Phantom Units6 26 27 5 1.8
Performance Unit Awards:
CEO Performance Award (1)
— — (3)10 1.0
Total share-based compensation expense$34 $71 $46 $47 
(1)All expenses, recognized and unrecognized, related to the CEO Performance Award are contingent upon whether the performance parameters are probable of being met. If the performance parameters are not met, no expense will be recognized.

The total tax benefit recognized during the years ended December 31, 2023, 2022, and 2021 related to compensation expense was $9 million, $19 million, and $12 million, respectively. As of December 31, 2023 and 2022, the Company had a liability of $16 million and $35 million, respectively, for cash settled non-vested Share-Based Awards and associated dividend and distribution equivalent rights. For the years ended December 31, 2023, 2022, and 2021, the Company paid cash of $54 million, $58 million, and $30 million, respectively, to settle liability-classified awards upon vesting.
Other Benefit Plans

The Company sponsors and administers two defined-contribution 401(k) plans, the CVR Energy 401(k) Plan and the CVR Energy 401(k) Plan for Represented Employees (collectively, the “Plans”), in which the Company’s employees may participate. Participants in the Plans may elect to contribute a designated percentage of their eligible compensation in accordance with the Plans, subject to statutory limits. The Company provides a matching contribution of 100% of the first 6% of eligible compensation contributed by participants. Participants in the Plans are immediately vested in their individual contributions. The Plans provide for a three-year vesting schedule for the Company’s matching contributions and contain a provision to count service with predecessor organizations. The Company had contributions under the Plans of $12 million and $11 million for the years ended December 31, 2023 and 2022, respectively. The Company did not contribute under the Plans for the year ended December 31, 2021, as the Company’s matching contributions for the Plans were suspended effective January 1, 2021 and resumed effective January 1, 2022.