Stock-Based Compensation

12 Months Ended

Dec. 31, 2021

Share-based Payment Arrangement [Abstract]

The 2013 Equity and Incentive Plan as amended (the "2013 Plan") authorizes the issuance of up to 9.9 million shares of the Company's common stock for use in paying incentive compensation awards in the form of stock options or other equity awards such as restricted stock, restricted stock units ("RSUs"), stock appreciation rights ("SARs") or performance share units ("PSUs"). Of the 9.9 million shares authorized, a maximum of 6.5 million shares may be issued for awards other than option rights or SARs, as defined in the 2013 Plan. The 2016 Non-Employee Directors' Long-Term Equity Compensation Plan, as amended (the "2016 Plan") authorizes the issuance of up to 800 thousand shares of the Company's common stock for equity awards. Both plans have been approved by the Company's stockholders. At December 31, 2021, there were 2.4 million shares available for granting equity awards under the 2013 Plan, of which 1.8 million shares were available for awards other than option rights or SARs. At December 31, 2021, there were 430 thousand shares available for granting equity awards under the 2016 Plan.

Restricted Stock Units

The Board approves the granting of performance-based RSUs as the long-term equity component of director, officer and certain key employee compensation. The RSUs require no payment from the recipient and compensation cost is measured based on the market price of the Company's common stock on the grant date and is generally recorded over the vesting period. RSUs granted to officers and certain key employees in 2019, 2020 and 2021 either vest on a pro-rata basis over three years or upon obtainment of specified retirement or years of service criteria. The vesting period for RSUs granted to non-employee directors is one year and each RSU is exchanged for an equal number of shares of the Company's common stock upon vesting for awards issued under the 2016 Plan and following the termination of the participant's service as a director under prior plans. RSUs do not have an option for cash payment.

The following table summarizes RSUs issued and the compensation expense from continuing operations recorded for the years ended December 31, 2021, 2020, and 2019:


	RSUs (a)	Weighted Average Fair Value	Expense
(Dollars in thousands, except per unit)			2021		2020		2019
Directors:








2018	43,821	20.54	—		—		280
2019	14,211	25.33	—		120		240
2020	34,986	10.29	120		240		—
2021	23,224	21.53	333		—		—
Employees:








2016	536,773	7.09	—		—		245
2017	286,251	13.70	—		85		763
2018	242,791	19.93	142		706		1,064
2019	270,864	22.25	1,239		1,270		1,524
2020	522,087	8.22	1,093		1,244		—
2021	343,125	18.62	1,892		—		—
Total			$	4,819	$	3,665	$	4,116

(a) Represents number of awards originally issued.

RSU activity for the year ended December 31, 2021 was as follows:



	Number of Shares	Weighted Average Grant-Date Fair Value








Non-vested at December 31, 2020	686,287	$	11.84
Granted	366,349	18.81
Vested	(307,543)	13.33
Forfeited	(32,249)	14.16
Non-vested at December 31, 2021	712,844	14.68

At December 31, 2021, the total unrecognized compensation expense related to non-vested RSUs was $6.0 million, which will be recognized over a weighted-average period of 1.9 years.

The total fair value of RSU's vested in 2021, 2020 and 2019 was $4.1 million, $4.3 million and $4.7 million, respectively.

Stock Appreciation Rights

The Board approves the granting of SARs to officers and certain key employees under the 2013 Plan. The SARs generally vest on a pro-rata three-year basis from the grant date or upon specified retirement or years of service criteria and expire no later than ten years after the grant date. The exercise price of the SARs is equal to the fair value of Harsco common stock on the grant date. Upon exercise, shares of the Company's common stock are issued based on the increase in the fair value of the Company's common stock over the exercise price of the SAR. SARs do not have an option for cash payment.

During 2019, the Company issued SARS covering 216,100 shares in March and 13,244 shares in July under the 2013 Plan. During 2020, the Company issued SARS covering 785,152 shares in March and 20,526 in October under the 2013 Plan.

During 2021, the Company issued SARS covering 184,641 shares in March under the 2013 Plan.

The fair value of each SAR grant was estimated on the grant date using a Black-Scholes pricing model with the following assumptions:



	Risk-free Interest rate		Dividend Yield		Expected Life (Years)	Volatility		SAR Grant Price	Fair Value of SAR



















March 2019 Grant	2.52	%	—	%	6.0	46.2	%	22.51	10.62
July 2019 Grant	1.84	%	—	%	6.0	47.1	%	27.39	12.80
March 2020 Grant	0.76	%	—	%	6.0	45.2	%	10.29	3.03
October 2020 Grant	0.44	%	—	%	6.0	60.3	%	14.89	8.12
March 2021 Grant	0.91	%	—	%	6.0	61.9	%	18.58	10.48

The March 2020 Grant's fair value was estimated using a Monte Carlo simulation because the exercise price is greater than the fair value of Harsco common stock on the grant date.

SARs activity for the year ended December 31, 2021 was as follows:



	Number of Shares	Weighted Average Exercise Price		Aggregate Intrinsic Value (in millions) (b)












Outstanding, December 31, 2020	2,401,131	$	14.37	$	11.7
Granted	184,641	18.58
Exercised	(107,413)	10.81
Forfeited/Expired	(84,304)	17.31
Outstanding, December 31, 2021	2,394,055	14.75		8.6

(b) Intrinsic value is defined as the difference between the current market value and the exercise price, for those SARs where the market price exceeds the exercise price.

The total intrinsic value of SARs exercised in 2021, 2020 and 2019 was $0.6 million, $0.5 million, and $0.3 million, respectively.

The following table summarizes information concerning outstanding and exercisable SARs at December 31, 2021:


	SARs Outstanding					SARs Exercisable
Range of exercisable prices	Vested	Non-vested	Weighted-Average Exercise Price per Share		Weighted-Average Remaining Contractual Life in Years	Number Exercisable	Weighted-Average Exercise Price per Share
$7.00 - $14.89	807,168	443,256	$	9.87	6.53	807,168	$	9.48
$16.53 - $22.70	727,909	221,624	19.12		5.31	727,909	19.01
$23.25 - $26.92	194,098	—	24.80		2.61	194,098	24.80
	1,729,175	664,880	14.75		5.73	1,729,175	15.21

Total compensation expense from continuing operations related to SARs was $1.8 million, $1.7 million and $1.8 million for the years ended December 31, 2021, 2020 and 2019, respectively. At December 31, 2021, total unrecognized compensation expense related to non-vested SARs was $2.2 million , which will be recognized over a weighted average period of 1.8 years.

Weighted-average grant date fair value of non-vested SARs for the year ended December 31, 2021 was as follows:


	Number of Shares	Weighted-Average Grant Date Fair Value














Non-vested shares, December 31, 2020	877,947	$	4.50
Granted	184,641	10.48
Vested	(348,340)	5.33
Forfeited	(49,368)	5.77
Non-vested shares, December 31, 2021	664,880	5.63

Performance Share Units

The Board approves the granting of PSUs to officers and certain key employees that may be earned based on the Company's total shareholder return over the three-year performance period. PSUs are paid out at the end of each performance period based on the Company’s performance, which is measured by determining the percentile rank of the total shareholder return of the Company's common stock in relation to the total shareholder return of a specific peer group of companies. The peer group of companies utilized is the S&P 600 Industrial Index. The payment of PSUs following the performance period will be based in accordance with the scale set forth in the PSU agreements, and may range from 0% to 200% of the initial grant. PSUs do not have an option for cash payment.

During the year ended December 31, 2019, the Company granted 233,112 shares in March, 6,189 shares in July and 38,006 shares in August under the 2013 Plan. During the year ended December 31, 2020, the Company granted 513,995 shares in March and 11,194 shares in October under the 2013 Plan. During the year ended December 31, 2021, the Company granted 316,959 shares in March under the 2013 Plan. The fair value of PSUs granted was estimated on the grant date using a Monte Carlo pricing model with the following assumptions:



	Risk-free Interest rate		Dividend Yield		Expected Life (Years)	Volatility		Fair Value of PSU





March 2019 Grant	2.48	%	—	%	2.82	33.8	%	29.04
July 2019 Grant	1.75	%	—	%	2.50	34.3	%	40.07
August 2019 Grant	1.57	%	—	%	2.41	34.9	%	23.38
March 2020 Grant	0.56	%	—	%	2.81	36.0	%	4.40
October 2020 Grant	0.17	%	—	%	2.20	53.7	%	17.01
March 2021 Grant	0.25	%	—	%	2.83	50.7	%	25.38

Total compensation expense from continuing operations related to PSUs was $5.1 million, $3.2 million and $4.8 million for the years ended

December 31, 2021, 2020 and 2019, respectively. At December 31, 2021, total unrecognized compensation expense related to non-vested PSUs was $5.6 million, which will be recognized over a weighted average period of 1.9 years.

A summary of the Company's non-vested PSU activity during the year ending December 31, 2021 was as follows:



	Number of Shares	Weighted-Average Grant Date Fair Value
















Non-vested shares, December 31, 2020	696,318	$	11.85
Granted	316,959	25.38


Forfeited	(44,839)	15.47
Vested, not issued (c)	(214,645)	26.84
Non-vested shares, December 31, 2021	753,793	13.05

(c) The measurement period for PSUs issued in 2019 ended on December 31, 2021 and these shares vested but will not be issued until the Board certifies the measurement period results in early 2022. A total of 0 shares are expected to be issued.