Share-Based Compensation

12 Months Ended

Dec. 31, 2020

Share-based Payment Arrangement [Abstract]

The Amended and Restated Vishay Precision Group, Inc. Stock Incentive Plan (as amended and restated, the “Plan”) permits the issuance of up to 1,000,000 shares of common stock. At December 31, 2020, the Company had reserved 371,637 shares of common stock for future grant of equity awards (restricted stock, unrestricted stock, restricted stock units (“RSUs”), or stock options). If any outstanding awards are forfeited by the holder, the underlying shares would be available for future grants under the Plan.

Restricted Stock Units

Pursuant to the Plan, the Company issued RSUs to board members, executive officers, and certain employees of the Company during 2020. The amount of compensation cost related to share-based payment transactions is measured based on the grant-date fair value of the equity instruments issued. VPG determines compensation cost for RSUs based on the grant-date fair value of the underlying common stock. Compensation cost is recognized over the period that the participant provides service in exchange for the award. The Company recognizes compensation cost for RSUs that are expected to vest and for which performance criteria are expected to be met.

On March 5, 2020, VPG’s three current executive officers were granted annual equity awards in the form of RSUs, of which 75% are performance-based. The awards have an aggregate target grant-date fair value of $1.2 million were comprised of 44,269 RSUs. Twenty-five percent of these awards will vest on January 1, 2023, subject to the executives' continued employment. The performance-based portion of the RSUs will also vest on January 1, 2023, subject to the executives' continued employment and the satisfaction of certain performance objectives relating to three-year cumulative “adjusted free cash flow” and net earnings goals, each weighted equally. The awards issued in 2019 and 2018 have similar allocations and vesting criteria.

On March 16, 2020, certain VPG employees were granted annual equity awards in the form of RSUs, of which 75% are performance-based. The awards have an aggregate target grant-date fair value of $0.4 million and were comprised of 18,940 RSUs. Twenty-five percent of these awards will vest on January 1, 2023 subject to the employees' continued employment. The performance-based portion of the RSUs will also vest on January 1, 2023, subject to the employee's continued employment and the satisfaction of certain performance objectives relating to three-year cumulative earnings goals and cash flow goals.

On May 21, 2020, the Board of Directors approved the issuance of an aggregate of 15,564 RSUs to the independent board members of the Board of Directors and to the non-executive Chairman of the Board of Directors. The awards have an aggregate grant-date fair value of $0.3 million and will vest on the earlier of the 2021 Annual Stockholders meeting or May 21, 2021, subject to the directors' continued service on the Board of Directors.

Vesting of equity awards may be subject to acceleration under certain circumstances.

RSU activity is presented below (number of RSUs in thousands):


	Years ended December 31,
	2020			2019			2018
	Number of RSUs	Weighted Average Grant-date Fair Value		Number of RSUs	Weighted Average Grant-date Fair Value		Number of RSUs	Weighted Average Grant-date Fair Value
Outstanding:
Beginning of year	212	$	25.97	265	$	17.64	417	$	14.57
Granted	79	24.16		73	35.27		74	28.20
Vested	(81)	19.02		(75)	15.27		(86)	16.75
Forfeited	(5)	15.75		(51)	11.49		(140)	14.70
End of year	205	$	28.23	212	$	25.97	265	$	17.64

The fair value of the RSUs vested during 2020 is $2.3 million. Included in the 2020, 2019 and 2018 activity are RSU's forfeited as a result of performance objectives not being met. These awards are therefore available for future grants under the Plan.

RSUs with performance-based vesting criteria are expected to vest as follows (number of RSUs in thousands):


Vesting Date	Expected to Vest	Not Expected to Vest	Total
January 1, 2021	46	3	49
January 1, 2022	1	47	48
January 1, 2023	4	43	47

Share-Based Compensation Expense

The following table summarizes pre-tax share-based compensation expense recognized (in thousands):


	Years ended December 31,
	2020		2019		2018

Restricted stock units	$	1,387	$	1,336	$	1,799

Share-based compensation expense is recognized ratably over the vesting period of the awards and for RSUs with performance criteria, is recognized for RSU's that are expected to vest and for which performance criteria are expected to be met.

During the fourth quarter of 2020, a net adjustment reducing share-based compensation expense by $0.1 million was recorded, based on the evaluation of performance objectives associated with awards granted in 2018, 2019 and 2020. It was determined that certain objectives were not likely to be fully met, necessitating a reversal of certain compensation expense associated with those awards. This was partially offset by additional share based compensation expense being recorded for certain objectives being fully met, which had been reversed in the prior year.

During 2019, it was determined that certain performance objectives associated with awards granted in 2017, 2018 and 2019 were not likely to be fully met, necessitating a reversal of certain compensation expense associated with those awards. As a net result, adjustments decreasing share based compensation expense totaling $0.8 million were recorded during the year based on anticipated performance levels.

The deferred tax benefit on share-based compensation expense was $0.0 million, $0.1 million, and $0.0 million for the years ended December 31, 2020, 2019, and 2018, respectively.

As of December 31, 2020, the Company had $0.8 million of unrecognized share-based compensation expense related to share-based awards that will be recognized over a weighted-average period of approximately 1.3 years.