Deferred Compensation

12 Months Ended

Dec. 31, 2019

Compensation Related Costs [Abstract]

Deferred Compensation

11. Deferred Compensation

We have a Deferred Equity Participation Plan, (which we refer to as the DEPP), which is a non-qualified plan that generally provides for distributions to certain of our key executives when they reach age 62 (or the one-year anniversary of the date of the grant for participants over the age of 61 as of the grant date) or upon or after their actual retirement. Under the provisions of the DEPP, we typically contribute cash in an amount approved by the compensation committee to a rabbi trust on behalf of the executives participating in the DEPP, and instruct the trustee to acquire a specified number of shares of our common stock on the open market or in privately negotiated transactions based on participant elections. Distributions under the DEPP may not normally be made until the participant reaches age 62 (or the one-year anniversary of the date of the grant for participants over the age of 61 as of the grant date) and are subject to forfeiture in the event of voluntary termination of employment prior to then. DEPP awards are generally made annually in the first quarter. In addition, we annually make awards under sub-plans of the DEPP for certain production staff, which generally provide for vesting and/or distributions no sooner than five years from the date of awards, although certain awards vest and/or distribute after earlier of fifteen years or the participant reaching age 65. All contributions to the plan (including sub-plans) deemed to be invested in shares of our common stock are distributed in the form of our common stock and all other distributions are paid in cash.

Our common stock that is issued to or purchased by the rabbi trust as a contribution under DEPP is valued at historical cost, which equals its fair market value at the date of grant or date of purchase. When common stock is issued, we record an unearned deferred compensation obligation as a reduction of capital in excess of par value in the accompanying consolidated balance sheet, which is amortized to compensation expense ratably over the vesting period of the participants. Future changes in the fair market value of our common stock owed to the participants do not have any impact on the amounts recorded in our consolidated financial statements.

In the first quarter of each of 2019, 2018 and 2017, the compensation committee approved $10.1 million, $11.5 million and $14.0 million, respectively, of awards in the aggregate to certain key executives under the DEPP that were contributed to the rabbi trust in the first quarters of 2019, 2018 and 2017. We contributed cash to the rabbi trust and instructed the trustee to acquire a specified number of shares of our common stock on the open market to fund these 2019, 2018 and 2017 awards. During 2019, 2018 and 2017, we charged $9.8 million, $9.1 million and $9.6 million, respectively, to compensation expense related to these awards.

In 2019, 2018 and 2017, the compensation committee approved $2.6 million, $0.9 million and $4.0 million, respectively, of awards under the sub-plans referred to above, which were contributed to the rabbi trust in first quarter 2019, 2018 and 2017, respectively. During 2019, 2018 and 2017, we charged $2.4 million, $2.2 million and $1.9 million, respectively, to compensation expense related to these awards. There was $0.5 million of distributions from the sub-plans during 2019. There were no distributions from the sub-plans during 2018 and 2017.

At December 31, 2019 and 2018, we recorded $64.5 million (related to 2.9 million shares) and $57.6 million (related to 2.7 million shares), respectively, of unearned deferred compensation as a reduction of capital in excess of par value in the accompanying consolidated balance sheet. The total intrinsic value of our unvested equity based awards under the plan at December 31, 2019 and 2018 was $276.3 million and $199.8 million, respectively. During 2019, 2018 and 2017, cash and equity awards with an aggregate fair value of $3.1 million, $6.4 million and $8.4 million, respectively, were vested and distributed to executives under the DEPP.

We have a Deferred Cash Participation Plan (which we refer to as the DCPP), which is a non-qualified deferred compensation plan for certain key employees, other than executive officers, that generally provides for vesting and/or distributions no sooner than five years from the date of awards. Under the provisions of the DCPP, we typically contribute cash in an amount approved by the compensation committee to the rabbi trust on behalf of the executives participating in the DCPP, and instruct the trustee to acquire a specified number of shares of our common stock on the open market or in privately negotiated transactions based on participant elections. In the first quarter of each of 2019, 2018 and 2017, the compensation committee approved $2.4 million, $5.6 million and $5.1 million, respectively, of awards in the aggregate to certain key executives under the DCPP that were contributed to the rabbi trust in second quarter 2019, 2018 and 2017, respectively. In addition, the compensation committee approved $7.7 million and $1.6 million of awards in the aggregate to certain key executives under the DCPP that were contributed to the rabbi trust in the second and third quarters of 2019, respectively. During 2019, 2018 and 2017 we charged $5.2 million, $3.0 million and $2.5 million to compensation expense related to these awards. There was $2.5 million and $3.6 million of distributions from the DCPP during 2019 and 2018, respectively. There were no distributions from the DCPP during 2017.