Share-based Compensation

6 Months Ended

Jun. 30, 2014

Share-based Compensation [Abstract]

Share-based Compensation

Note 13 - 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, 2014, Synovus had a total of 7,231,901 shares of its authorized but unissued Common Stock reserved for future grants under the 2013 Omnibus Plan. The 2013 Omnibus Plan authorizes 8,571,429 common share equivalents available for grant, where grants of options count as one share equivalent and grants of full value awards (e.g., restricted share units, market restricted share units) count as 2 share equivalents. Any restricted share units that are forfeited and options that expire unexercised will again become available for issuance under the 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 10 years. Stock options are granted at exercise prices which equal the fair value of a share of common stock on the grant-date. 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

Share-based compensation costs associated with employee grants are recorded as a component of salaries and other personnel expense in the consolidated statements of income. 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 $4.7 million and $2.5 million for the six and three months ended June 30, 2014, respectively, and $3.4 million and $1.6 million for the six and three months ended June 30, 2013, respectively.

Stock Options

No stock option grants were made during the six months ended June 30, 2014. At June 30, 2014, there were 3,010,614 options to purchase shares of Common Stock outstanding with a weighted average exercise price of $48.60.

Restricted Share Units, Performance Share Units and Market Restricted Share Units

During the six months ended June 30, 2014, Synovus awarded 402,577 restricted share units that have a service-based vesting period of three years and awarded 57,645 performance share units that vest upon service conditions and performance conditions. Synovus also granted 86,465 market restricted share units during the six months ended June 30, 2014. The weighted average grant-date fair value of the awarded restricted share units, performance share units and market restricted share units was $23.75 per share. At June 30, 2014, including dividend equivalents granted, there were 1,077,224 restricted share units, performance share units and market restricted share units outstanding with a weighted average grant-date fair value of $20.55.

During the six months ended June 30, 2014, Synovus also granted 18,938 salary stock units to senior management, which vested and were expensed immediately upon grant. Compensation expense is initially determined based on the number of salary stock units granted and the market price of Common Stock at the grant date. Subsequent to the grant date, compensation expense is recorded for changes in Common Stock market price. The total fair value of salary stock units granted during the six months ended June 30, 2014 was $465 thousand. The salary stock units granted during 2014 are classified as liabilities and will be settled in cash on January 15, 2015.