Common Stock Incentive Plan

3 Months Ended

Mar. 31, 2012

Common Stock Incentive Plan [Abstract]

Common Stock Incentive Plan

17.    Common Stock Incentive Plan

In 2003, our Board of Directors adopted, and stockholders approved, the 2003 Incentive Award Plan of Realty Income Corporation, or the Stock Plan, to enable us to attract and retain the services of directors, employees and consultants, considered essential to our long-term success. The Stock Plan offers our directors, employees and consultants an opportunity to own stock in Realty Income and/or rights that will reflect our growth, development and financial success. The Stock Plan was amended and restated by our Board of Directors in February 2006 and in May 2007.

In March 2012, our Board of Directors adopted the Realty Income 2012 Incentive Award Plan, or 2012 Plan. This 2012 Plan will replace the Stock Plan, pending approval by stockholders at our May 2012 Annual Meeting.

The amount of share-based compensation costs recognized in general and administrative expense on our consolidated statements of income during the first three months of 2012 was $3.0 million and, during the first three months of 2011 was $2.2 million.

The following table summarizes our common stock grant activity under our Stock Plan. Our common stock grants vest over periods ranging from immediately to 10 years.

	For the three months ended March 31, 2012					For the year ended  December 31, 2011
	Number of shares			Weighted average price (1)		Number of shares			Weighted average price (1)
Outstanding nonvested shares, beginning of year		925,526		$	20.21		924,294		$	19.69
Shares granted		235,811			34.57		247,214			33.94
Shares vested		(250,876	)		26.51		(245,487	)		25.26
Shares forfeited		(275	)		26.02		(495	)		31.37
Outstanding nonvested shares, end of each period		910,186		$	26.25		925,526		$	20.21

(1) Grant date fair value.

During the first three months of 2012, we issued 235,811 shares of common stock under our Stock Plan. These shares vest over the following service periods: 18,484 vested immediately, 64,600 vest over a service period of two years, 4,000 vest over a service period of three years and 148,727 vest over a service period of five years.

As of March 31, 2012, the remaining unamortized share-based compensation expense totaled $23.9 million, which is being amortized on a straight-line basis over the service period of each applicable award.

Due to a historically low turnover rate, we do not estimate a forfeiture rate for our nonvested shares. Accordingly, unexpected forfeitures will lower share-based compensation expense during the applicable period. Under the terms of our Stock Plan, we pay non-refundable dividends to the holders of our nonvested shares. Applicable accounting guidance requires that the dividends paid to holders of these nonvested shares be charged as compensation expense to the extent that they relate to nonvested shares that do not or are not expected to vest. However, since we do not estimate forfeitures given our historical trends, we did not record any amount to compensation expense related to dividends paid in 2012 or 2011.