Share-Based Compensation

3 Months Ended

Mar. 31, 2012

Share-Based Compensation [Abstract]

Share-Based Compensation

6. Share-Based Compensation

Under terms of its share-based compensation plans, Con-way grants various types of share-based compensation awards to employees and directors. The plans provide for awards in the form of stock options, nonvested stock (also known as restricted stock), performance-share plan units ("PSPUs") and stock appreciation rights ("SARs"). See Note 11, "Share-Based Compensation," of Item 8, "Financial Statements and Supplementary Data," in Con-way's 2011 Annual Report on Form 10-K for additional information concerning its share-based compensation awards.

A portion of the awards Con-way granted in the first quarter of 2012 included PSPUs. The PSPUs vest three years from the grant date if certain performance criteria are achieved. The number of shares the award recipients ultimately receive depends upon the achievement of certain performance criteria and can range from 0% to 200% of the grant target. PSPUs are subject to forfeiture if an award recipient leaves Con-way during the three-year period. The PSPUs are valued at the market price of Con-way's common stock at the date of the award, reduced by the present value of the dividends not received during the three-year vesting period. The amount of expense recorded each period is based on Con-way's current estimate of the number of shares that will ultimately vest.

The SARs are liability-classified awards and, as a result, Con-way re-measures the fair value of the awards each reporting period until the awards are settled. At March 31, 2012 and December 31, 2011, Con-way had recognized accrued liabilities for cash-settled SARs of $4.2 million and $3.1 million, respectively, using a weighted-average fair value per SAR of $13.33 and $10.85, respectively.

The following expense was recognized for share-based compensation:

	Three Months Ended March 31,
(Dollars in thousands)	2012			2011
Salaries, wages and employee benefits	$	5,062		$	4,763
Deferred income tax benefit		(1,965	)		(1,844	)
Net share-based compensation expense	$	3,097		$	2,919