Share-Based Compensation

9 Months Ended

Sep. 30, 2021

Share-based Payment Arrangement [Abstract]

Restricted Share Units (“RSUs”)

2021 Grant - During the first three quarters of 2021, the Company granted both time-based and performance-based awards to certain members of management and to members of the Board. A total of 656,363 of time-based awards were granted to management which will vest ratably over a three-year period ending March 5, 2024. A total of 56,304 of time-based awards were granted to members of the Board which will vest in May 2022. During the first three quarters of 2021, a total of 623,112 of performance-based awards were granted, of which 311,556 of the awards vest based on a relative Total Shareholder Return ("TSR") calculation and 311,556 of the awards vest based on certain performance metrics of the Company. The non-TSR performance-based awards vest on March 5, 2024 based on the achievement against the target average company performance of three separate performance periods, commencing on January 1 of each 2021, 2022, and 2023 and ending on December 31 of each 2021, 2022 and 2023, for which, for each performance period, the performance metric is an average annual return on invested capital (ROIC) improvement versus 2020 ROIC. Similar to the Company's historical TSR awards granted in prior years, the TSR awards vest based on the Company's three-year TSR versus the peer group performance levels. Given these terms, the TSR metric is considered a market condition for which we used a Monte Carlo simulation to determine the weighted average grant date fair value of $29.07. The following weighted average assumptions were utilized to value the TSR grants:


	2021
Dividend yield	1.56	%
Expected historical volatility	71.1	%
Risk free interest rate	0.17	%
Expected life (in years)	3

The unrecognized compensation cost associated with all unvested awards at September 30, 2021 was $34 million, adjusted for estimated forfeitures, which is expected to be recognized over a weighted-average period of approximately 1.9 years.

During the three months ended September 30, 2021 and 2020, we recorded $7 million and $8 million of stock compensation expense, respectively. During the nine months ended September 30, 2021 and 2020, we recorded $23 million and $19 million of stock compensation expense, respectively. The nine months ended September 30, 2021 includes the acceleration of approximately $2 million of stock compensation expense associated with the retirement agreement entered into with the former CEO on March 18, 2021.

There were 318,852 options exercised during the nine month periods ended September 30, 2021 with an intrinsic value of $1.0 million. Cash proceeds from the exercise of stock options was $6 million for the nine months ended September 30, 2021.