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Common Stock Incentive Plan
 3 Months Ended
Mar. 31, 2021
Share-based Payment Arrangement [Abstract]  
Common Stock Incentive Plan Common Stock Incentive Plan
In 2012, our Board of Directors adopted and stockholders approved the Realty Income Corporation 2012 Incentive Award Plan, or the 2012 Plan, to enable us to motivate, attract and retain the services of directors and employees considered essential to our long-term success. The 2012 Plan offers our directors and employees an opportunity to own our stock or rights that will reflect our growth, development and financial success. Under the terms of the 2012 plan, the aggregate number of shares of our common stock subject to options, restricted stock, stock appreciation rights, restricted stock units, performance shares and other awards, will be no more than 3,985,734 shares. The 2012 Plan has a term of ten years from the date it was adopted by our Board of Directors.
In March 2021, our Board of Directors adopted the Realty Income 2021 Incentive Award Plan, or 2021 Plan. This 2021 Plan will replace the 2012 Plan, pending approval by stockholders at our May 2021 Annual Meeting.
The amount of share-based compensation costs recognized in general and administrative expense on our consolidated statements of income and comprehensive income was $3.7 million during the three months ended March 31, 2021 and $5.5 million during the three months ended March 31, 2020 (including $1.8 million of accelerated share-based compensation costs for our former Chief Financial Officer ("CFO"). Upon the departure of our former CFO in the first quarter of 2020, we incurred a severance charge of $3.5 million, consisting of $1.6 million of cash, $1.8 million related to share-based compensation expense and $58,000 of professional fees.
A.    Restricted Stock
During the three months ended March 31, 2021, we granted 74,183 shares of common stock under the 2012 Plan. These restricted stock awards vest over a four-year service period.
As of March 31, 2021, the remaining unamortized share-based compensation expense related to restricted stock totaled $11.9 million, which is being amortized on a straight-line basis over the service period of each applicable award. The amount of share-based compensation is based on the fair value of the stock at the grant date. We define the grant date as the date the recipient and Realty Income have a mutual understanding of the key terms and conditions of the award, and the recipient of the grant begins to benefit from, or be adversely affected by, subsequent changes in the price of the shares.
B.    Performance Shares and Restricted Stock Units
During the three months ended March 31, 2021, we granted 157,341 performance shares, as well as dividend equivalent rights, to our executive officers. The performance shares are earned based on our Total Shareholder Return (TSR) performance relative to select industry indices and peer groups as well as achievement of certain operating metrics, and vest 50% on the first and second January 1 after the end of the three-year performance period, subject to continued service.
During the three months ended March 31, 2021, we also granted 13,837 restricted stock units, all of which vest over a four-year service period. These restricted stock units have the same economic rights as shares of restricted stock.
As of March 31, 2021, the remaining share-based compensation expense related to the performance shares and restricted stock units totaled $18.6 million. The fair value of the performance shares were estimated on the date of grant using a Monte Carlo Simulation model. The performance shares are being recognized on a tranche-by-tranche basis over the service period. The amount of share-based compensation for the restricted stock units is based on the fair value of our common stock at the grant date. The expense amortization period for restricted stock units is the lesser of the four-year service period or the period over which the awardee reaches the qualifying retirement age. For employees who have already met the qualifying retirement age, restricted stock units are fully expensed at the grant date.