Share-based Compensation

6 Months Ended

Jun. 30, 2012

Share-based Compensation [Abstract]

Share-based Compensation

Share-based Compensation

General Description of Share-based Plans

Synovus has a long-term incentive plan under which the Compensation Committee of the Board of Directors has the authority to grant share-based awards to Synovus employees. At June 30, 2012, Synovus had a total of 23,685,188 shares of its authorized but unissued Common Stock reserved for future grants under the 2007 Omnibus Plan. The Plan permits grants of share-based compensation including stock options, non-vested shares, and restricted share units. The grants generally include vesting periods ranging from two to five years and contractual terms of ten years. Stock options are granted at exercise prices which equal the fair market value of a share of common stock on the grant-date. Non-vested shares and restricted share units are awarded at no cost to the recipient upon their grant. Synovus has historically issued new shares to satisfy share option exercises and share unit conversions. Dividend equivalents are paid on outstanding restricted share units in the form of additional restricted share units that vest over the same vesting period or the vesting period left on the original restricted share unit grant.

Share-based Compensation Expense

Synovus’ share-based compensation costs associated with employee grants are recorded as a component of salaries and other personnel expense in the consolidated statements of operations. Share-based compensation costs associated with grants made to non-employee directors of Synovus are recorded as a component of other operating expenses. Share-based compensation expense for service-based awards is recognized net of estimated forfeitures for plan participants on a straight-line basis over the vesting period. Total share-based compensation expense was $4.6 million and $2.9 million for the six and three months ended June 30, 2012 and $2.4 million and $1.5 million for the six and three months ended June 30, 2011, respectively.

Stock Options

During the six months ended June 30, 2012, Synovus awarded an aggregate amount of 4,586,666 stock options to key employees throughout the Synovus organization. The awards contain a service-based vesting period of three years. The weighted average grant-date fair value of the awarded stock options was $1.03 determined using the Black-Scholes option pricing model. At June 30, 2012, there were 19,456,631 options to purchase shares of Synovus' common stock outstanding with a weighted average exercise price of $8.37.

Restricted Share Units and Salary Stock Units

During the six months ended June 30, 2012, Synovus awarded an aggregate amount of 3,160,800 restricted share units to key employees and non-employee directors. The majority of the awards contain a service-based vesting period of three years. In addition to the service vesting requirement, the vesting of certain awards made to senior management is contingent upon the repayment of its Series A Preferred Stock and achievement of profitability vesting requirements. The weighted average grant-date fair value of the awarded restricted share units was $2.05 per share. At June 30, 2012, including dividend equivalents granted, there were 6,355,357 restricted share units outstanding with a weighted average grant-date fair value of $2.36.

During the six months ended June 30, 2012, Synovus also granted 300,478 salary stock units to certain key employees of Synovus, which vested and were expensed immediately upon grant. Each restricted stock unit represents a right to one share of common stock. Compensation expense is determined based on the number of restricted stock units granted and the market price of Synovus' common stock at the grant date. The total fair value of salary stock units granted during the six months ended June 30, 2012 was $595 thousand. The restricted stock units are classified as liabilities and will be settled in cash in February 2013.