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Share-Based Compensation
 12 Months Ended
Dec. 31, 2020
Share-based Payment Arrangement, Noncash Expense [Abstract]  
SHARE-BASED COMPENSATION SHARE-BASED COMPENSATION
Incentive compensation and award plan - On January 11, 2017, we adopted the TechnipFMC plc Incentive Award Plan (the “Plan”). The Plan provides certain incentives and awards to officers, employees, non-employee directors and consultants of TechnipFMC and its subsidiaries. The Plan allows our Board of Directors to make various types of awards to non-employee directors and the Compensation Committee (the “Committee”) of the Board of Directors to make various types of awards to other eligible individuals. Awards may include share options, share appreciation rights, performance share units, restricted share units, restricted shares or other awards authorized under the Plan. All awards are subject to the Plan’s provisions, including all share-based grants previously issued prior to consummation of the merger of FMC Technologies and Technip S.A. (the “Merger”). Under the Plan, 24.1 million ordinary shares were authorized for awards. As of December 31, 2020, 8.5 million ordinary shares were available for future grant.
The exercise price for options is determined by the Committee but cannot be less than the fair market value of our ordinary shares at the grant date. Restricted share and performance share unit grants generally vest after three years of service.
Under the Plan, our Board of Directors has the authority to grant non-employee directors share options, restricted shares, restricted share units and performance shares. Unless otherwise determined by our Board of Directors, awards to non-employee directors generally vest one year from the date of grant. All restricted share units awarded prior to 2020 will be settled when a non-executive director ceases services on the Board of Directors. Beginning with the 2020 equity award, non-executive directors now have the opportunity to elect the year in which they will take receipt of the equity grants from either (a) a period of 1 to 10 years from the grant date or (b) upon their separation from Board service. The elections are made prior to the beginning of the grant year and are irrevocable after December 31 of the year prior to grant. Restricted share units are settled when a director ceases services to the Board of Directors. As of December 31, 2020, outstanding awards to active and retired non-employee directors included 254.3 thousand of share units.
The measurement of share-based compensation expense on restricted share awards is based on the market price and fair value at the grant date and the number of shares awarded. The fair value of performance shares is estimated using a combination of the closing stock price on the grant date and the Monte Carlo simulation model. We use Black-Scholes options pricing model to measure the fair value of stock options granted on or after January 1, 2017.
The share-based compensation expense for each award is recognized ratably over the applicable service period or the period beginning at the start of the service period and ending when an employee becomes eligible for retirement (currently age 62 under the Plan), after taking into account estimated forfeitures.
We recognize compensation expense and the corresponding tax benefits for awards under the Plan. The compensation expense under the Plan was as follows:
Year Ended December 31,
(In millions)202020192018
Share-based compensation expense$69.0 $74.5 $49.1 
Income tax benefits related to share-based compensation expense$18.6 $20.1 $13.2 
As of December 31, 2020, the portion of share-based compensation expense related to outstanding awards to be recognized in future periods is as follows:
December 31, 2020
Share-based compensation expense not yet recognized (in millions)$68.1 
Weighted-average recognition period (in years)1.8
Restricted Share Units
A summary of the non-vested restricted share units’ activity is as follows:
(Shares in thousands)SharesWeighted-Average 
Grant Date 
Fair Value
Non-vested as of December 31, 20194,525.9 $27.44 
Granted3,836.0 $9.27 
Vested(1,909.1)$27.16 
Cancelled/forfeited(330.9)$15.71 
Non-vested as of December 31, 20206,121.9 $18.43 
The total grant date fair value of restricted stock share units vested during the years ended December 31, 2020 and 2019 was $51.8 million and $10.2 million, respectively.
Performance Share Units
The Board of Directors has granted certain employees, senior executives and directors performance share units that vest subject to achieving satisfactory performances. For performance share units issued on or after January 1, 2017, performance is based on results of return on invested capital and total shareholder return (“TSR”).
For the performance share units which vest based on TSR, the fair value of performance shares is estimated using a combination of the closing stock price on the grant date and the Monte Carlo simulation model. The weighted-average fair value and the assumptions used to measure the fair value of performance share units subject to performance-adjusted vesting conditions in the Monte Carlo simulation model were as follows:
Year Ended December 31,
202020192018
Weighted-average fair value (a)
$10.02$29.04$41.97
Expected volatility (b)
38.30 %34.00 %34.00 %
Risk-free interest rate (c)
0.40 %2.42 %2.37 %
Expected performance period in years (d)
3.03.03.0
(a) The weighted-average fair value was based on performance share units granted during the period.
(b) Expected volatility is based on normalized historical volatility of our shares over a preceding period commensurate with the expected term of the performance share units.
(c) The risk-free rate for the expected term of the performance share units is based on the U.S. Treasury yield curve in effect at the time of grant.
(d) For awards subject to service-based vesting, due to the lack of historical exercise and post-vesting termination patterns of the post-Merger employee base, the expected term was estimated using a simplified method for all awards granted in 2020, 2019 and 2018.
A summary of the non-vested performance share units’ activity is as follows:
(Shares in thousands)SharesWeighted-Average 
Grant Date 
Fair Value
Non-vested as of December 31, 20193,817.7 $28.52 
Granted2,828.4 $10.02 
Vested(1,364.4)$31.65 
Cancelled/forfeited(441.0)$20.62 
Non-vested as of December 31, 20204,840.7 $17.55 
The total grant date fair value of performance share units vested during years ended December 31, 2020, 2019 and 2018 was $43.2 million, $13.3 million and $7.0 million, respectively.
Share Option Awards
The fair value of each share option award is estimated as of the date of grant using the Black-Scholes options pricing model.
Share options awarded prior to 2017 were granted subject to performance criteria based upon certain targets, such as TSR, return on capital employed, and operating income from recurring activities. Subsequent share options granted are time-based awards vesting over three years.
The weighted-average fair value and the assumptions used to measure fair value are as follows:
Year Ended December 31,
202020192018
Weighted-average fair value (a)
$— $5.64 $9.07 
Expected volatility (b)
— %32.5 %32.5 %
Risk-free interest rate (c)
— %2.5 %2.7 %
Expected dividend yield (d)
— %2.6 %2.0 %
Expected term in years (e)
06.56.5
(a)The weighted-average fair value was based on stock options granted during the period.
(b)Expected volatility is based on normalized historical volatility of our shares over a preceding period commensurate with the expected term of the option.
(c)The risk-free rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of grant.
(d)There were no share options awarded in 2020. Share options awarded in 2019 and 2018 were valued using an expected dividend yield of 2.6% and 2.0%, respectively.
(e)For awards subject to service-based vesting, due to the lack of historical exercise and post-vesting termination patterns of the post-Merger employee base, the expected term was estimated using a simplified method for all awards granted in 2020, 2019 and 2018.
The following is a summary of share option transactions during the year ended December 31, 2020:
Number of SharesWeighted average exercise priceWeighted average remaining life
(in years)
Balance as of December 31, 20194,842.4 $29.68 5.3
Granted— $— 
Exercised— $— 
Cancelled(244.0)$28.08 
Balance as of December 31, 20204,598.4 $29.77 4.2
Exercisable as of December 31, 20203,460.8 $31.47 3.0

The aggregate intrinsic value of stock options outstanding and stock options exercisable as of December 31, 2020 was nil and nil, respectively.
Cash received from the share option exercises was nil, during each of the years ended December 31, 2020, 2019 and 2018. The total intrinsic value of share options exercised during each of the years ended December 31, 2020, 2019 and 2018 was nil. To exercise share options, an employee may choose (1) to pay, either directly or by way of the group savings plan, the share option strike price to obtain shares, or (2) to sell the shares immediately after having exercised the share option (in this case, the employee does not pay the strike price but instead receives the intrinsic value of the share options in cash).
The following summarizes significant ranges of outstanding and exercisable share options as of December 31, 2020:
Options OutstandingOptions Exercisable
Exercise Price RangeNumber of options
(in thousands)		Weighted average remaining life (in years)Weighted average exercise priceNumber of options
(in thousands)		Weighted average exercise price
$20.00-$33.004,087.2 4.6$26.68 2,949.5 $26.90 
$45.00-$51.0033.0 1.0$45.49 33.0 $45.49 
$55.00-$57.00478.2 0.4$56.93 478.3 $56.93 
Total4,598.4 4.2$29.77 3,460.8 $31.47