SHARE-BASED COMPENSATION

3 Months Ended

Mar. 31, 2023

Share-Based Payment Arrangement [Abstract]

Share-Based Compensation Expense

Share-based compensation expense, which is included in general and administrative expenses in our consolidated statements of income and comprehensive income, is summarized as follows:


	Three Months Ended March 31,
(Amounts in thousands)	2023		2022
Share-based compensation expense components:
Time-based LTIP expense(1)	$	987	$	1,232
Performance-based LTIP expense(2)	728		1,045
Restricted share expense	239		60
Deferred share unit (“DSU”) expense	33		25
Stock option expense	20		235
Total Share-based compensation expense	$	2,007	$	2,597

(1) Expense for the three months ended March 31, 2023 includes the 2023, 2022, 2021, 2020 and 2019 LTI Plans.

(2) Expense for the three months ended March 31, 2023 includes the 2017 OPP plan and the 2023, 2022, 2021, 2020, 2019, and 2018 LTI Plans.

Equity award activity during the three months ended March 31, 2023 included: (i) 257,561 LTIP units granted, (ii) 176,268 LTIP units vested, (iii) 72,227 restricted shares granted, (iv) 32,134 stock options vested, and (v) 29,939 restricted shares vested.

2023 Long-Term Incentive Plan

On February 10, 2023, the Company established the 2023 Long-Term Incentive Plan (“2023 LTI Plan”) under the Omnibus Share Plan. The plan is a multi-year, equity compensation program under which participants, including our Chairman and Chief Executive Officer, receive awards in the form of LTIP units that, with respect to one half of the program, vest based solely on the passage of time. With respect to the other half of the program, the awards are earned and vest if certain relative and absolute total shareholder return (“TSR”) and/or funds from operations (“FFO”) and same-property net operating income (“SP NOI”) growth targets are achieved by the Company over a three-year performance period. The total grant date fair value under the 2023 LTI Plan was $7.4 million, comprising both performance-based and time-based awards as described further below:

Performance-based awards

For the performance-based awards under the 2023 LTI plan, participants have the opportunity to earn awards in the form of LTIP units if Urban Edge’s absolute and/or relative TSR meets certain criteria over the three-year performance measurement

period beginning on February 10, 2023 and ending on February 9, 2026. Participants also have the opportunity to earn awards in the form of LTIP units if Urban Edge’s FFO growth component and SP NOI growth component meets certain criteria over the three-year performance measurement period beginning January 1, 2023 and ending on December 31, 2025. The Company granted performance-based awards under the 2023 LTI Plan representing 309,611 units. The fair value of the performance-based award portion of the 2023 LTI Plan on the grant date was $3.7 million using a Monte Carlo simulation to estimate the fair value of the Absolute and Relative components through a risk-neutral premise. Assumptions include historical volatility (53.3%), risk-free interest rates (4.2%), and historical daily return as compared to certain peer companies.

Time-based awards

The time-based awards granted under the 2023 LTI Plan, also granted in the form of LTIP units, vest ratably over three years except in the case of our Chairman and Chief Executive Officer, where the vesting is ratable over four years. As of March 31, 2023, the Company granted time-based awards under the 2023 LTI Plan that represent 257,561 LTIP units with a grant date fair value of $3.7 million.