Share-Based Compensation Plan

12 Months Ended

Dec. 31, 2021

Share-based Payment Arrangement [Abstract]

Share-Based Compensation Plan

Stock-Based Compensation Plan

In May 2018, our shareholders approved the 2018 LTIP, a long-term incentive plan under which any employee or non-employee director who provides services to us is eligible to participate in the plan. The 2018 LTIP, which is overseen by the Compensation Committee of our Board of Directors, provides for the grant of various types of equity awards, of which restricted stock unit awards and performance-based compensation awards have been granted. The maximum number of shares authorized for issuance under the 2018 LTIP is 150,000 shares, and the 2018 LTIP is effective until May 8, 2028. We began awarding stock-based compensation to eligible employees and directors in June 2018. After giving effect to awards granted and forfeitures made under the 2018 LTIP, and the achievement of performance factors through December 31, 2021, a total of 55,809 shares were available for issuance.

Compensation expense recognized in connection with equity-based awards was as follows for the periods indicated (in thousands):

	Year Ended December 31,
	2021		2020		2019
Compensation expense	$	854	$	643	$	478

If dividends are paid with respect to our common shares during the vesting period, an equivalent amount will accrue and be held by us without interest until the restricted stock unit awards and performance share unit awards vest, at which time the amount will be paid to the recipient. If the award is forfeited prior to vesting, the accrued dividends will also be forfeited. At December 31, 2021 and 2020, we had $82,500 and $50,800, respectively, of accrued dividend amounts for awards granted under the 2018 LTIP.

Restricted Stock Unit Awards

A restricted stock unit award is a grant of a right to receive our common shares in the future at no cost to the recipient apart from fulfilling service and other conditions once a defined vesting period expires, subject to customary forfeiture provisions. A restricted stock unit award will either be settled by the delivery of common shares or by the payment of cash based upon the fair market value of a specified number of shares, at the discretion of the Compensation Committee, subject to the terms of the applicable award agreement. The Compensation Committee intends for these awards to vest with the settlement of common shares. Restricted stock unit awards generally vest at a rate of approximately 33 percent per year beginning one year after the grant date and are non-vested until the required service periods expire.

The fair value of a restricted stock unit award is based on the market price per share of our common shares on the date of grant. Compensation expense is recognized based on the grant date fair value over the requisite service or vesting period.

The following table presents restricted stock unit award activity for the periods indicated:

		Weighted-
		Average Grant
	Number of	Date Fair Value
	Shares	per Share (1)
Restricted stock unit awards at January 1, 2019	13,733	$	43.00
Granted (2)	14,376	$	34.00
Vested	(7,188)	$	41.90
Forfeited	(2,139)	$	38.42
Restricted stock unit awards at December 31, 2019	18,782	$	37.05
Granted (3)	20,346	$	24.85
Vested	(9,578)	$	36.36
Forfeited	(2,060)	$	30.07
Restricted stock unit awards at December 31, 2020	27,490	$	28.64
Granted (4)	26,369	$	29.70
Vested	(14,244)	$	30.20
Forfeited	(1,350)	$	28.92
Restricted stock unit awards at December 31, 2021	38,265	$	28.78

____________________

(1)Determined by dividing the aggregate grant date fair value of awards by the number of awards issued.

(2)The aggregate grant date fair value of restricted stock unit awards issued during 2019 was $0.5 million based on a grant date market price of our common shares of $34.00 per share.

(3)The aggregate grant date fair value of restricted stock unit awards issued during 2020 was $0.5 million based on grant date market prices of our common shares ranging from $24.77 to $26.23 per share.

(4)The aggregate grant date fair value of restricted stock unit awards issued during 2021 was $0.8 million based on grant date market prices of our common shares ranging from $29.70 to $30.00 per share.

Unrecognized compensation cost associated with restricted stock unit awards was approximately $0.4 million at December 31, 2021. Due to the graded vesting provisions of these awards, we expect to recognize the remaining compensation cost for these awards over a weighted-average period of 1.4 years.

Performance Share Unit Awards

An award granted as performance-based compensation is awarded to a participant contingent upon attainment of our future performance goals during a performance cycle. Performance goals are pre-established by the Compensation Committee. Following the end of the performance period, the holder of a performance-based compensation award is entitled to receive payment of an amount not exceeding the number of shares of common stock subject to, or the maximum value of, the performance-based compensation award, based on the achievement of the performance measures for the performance period. The performance share unit awards generally vest in full approximately three years after grant date, and are non-vested until the required service period expires.

The fair value of a performance share unit award is based on the market price per share of our common shares on the date of grant. Compensation expense is recognized based on the grant date fair value over the requisite service or vesting period. Compensation expense is generally adjusted for the performance goals on a quarterly basis.

The following table presents performance share unit award activity for the periods indicated:

		Weighted-
		Average Grant
	Number of	Date Fair Value
	Shares	per Share (1)
Performance share unit awards at January 1, 2019	3,966	$	43.00
Granted (2)	8,094	$	34.00
Performance factor decrease (3)	(7,312)	$	34.23
Vested	(416)	$	43.00
Forfeited	(1,545)	$	37.37
Performance share unit awards at December 31, 2019	2,787	$	43.00
Granted (4)	10,781	$	24.92
Performance factor increase (3)	3,981	$	24.92
Vested	(713)	$	28.55
Forfeited	(595)	$	30.22
Performance share unit awards at December 31, 2020	16,241	$	27.67
Granted (5)	12,205	$	29.70
Performance factor decrease (3)	(4,493)	$	29.70
Vested	(2,461)	$	43.00
Forfeited	—	$	—
Performance share unit awards at December 31, 2021	21,492	$	26.64

____________________

(1)Determined by dividing the aggregate grant date fair value of awards by the number of awards issued.

(2)The aggregate grant date fair value of performance share unit awards issued during 2019 was $0.3 million based on a grant date market price of our common shares of $34.00 per share and assuming a performance factor of 100 percent.

(3)The performance factor for awards granted in 2019 was lowered to 0 percent based on a comparison of actual results for 2019 to performance goals. The performance factor for awards granted in 2020 was increased to 138.5 percent based upon a comparison of actual results for 2020 to performance goals. The performance factor for awards granted in 2021 decreased to 63.1 percent based upon a comparison of actual results for 2021 to performance goals.

(4)The aggregate grant date fair value of performance share unit awards issued during 2020 was $0.2 million based on grant date market prices of our common shares ranging from $24.77 to $26.23 per share and assuming a performance factor of 100 percent.

(5)The aggregate grant date fair value of performance share unit awards issued during 2021 was $0.4 million based on a grant date market price of our common shares of $29.70 per share and assuming a performance factor of 100 percent.

Unrecognized compensation cost associated with performance share unit awards was approximately $0.3 million at December 31, 2021. We expect to recognize the remaining compensation cost for these awards over a weighted-average period of 1.7 years.