Share-Based Compensation Arrangements |
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Share-Based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Compensation Arrangements | Share-Based Compensation Arrangements The Corporation’s equity compensation plans include the 2003 Stock Incentive Plan, the 2013 Stock Option and Incentive Plan and the 2022 Long Term Incentive Plan, which have been approved by the Corporation’s Board of Directors and shareholders. Following shareholder approval of the 2022 Long Term Incentive Plan on April 26, 2022, awards are being granted only from the 2022 Long Term Incentive Plan. The maximum number of shares of common stock that may be issued under the 2022 Long Term Incentive Plan is 600,000 and is subject to adjustment in accordance with the terms of this plan. The types of permitted equity awards under the 2022 Long Term Incentive Plan include stock options (both incentive and non-qualified options), stock appreciation rights, restricted stock, restricted stock units, unrestricted stock, cash-based awards, and dividend equivalent rights. See Item 12 for additional information regarding the equity compensation plans. Reserved Shares As of December 31, 2022, a total of 1,438,109 common stock shares were reserved for issuance under the 2003 Stock Incentive Plan, 2013 Stock Option and Incentive Plan and 2022 Long Term Incentive Plan. Share-based Compensation Expense The following table presents share-based compensation expense and the related income tax benefits recognized in the Consolidated Statements of Income for stock options, restricted stock units and performance share units:
(1)Includes $78 thousand and $182 thousand, respectively, of excess tax benefits recognized upon the settlement of share-based compensation awards in 2022 and 2021. Includes $103 thousand of excess tax expenses recognized upon the settlement of share-based compensation awards in 2020. As of December 31, 2022, there was $5.1 million of total unrecognized compensation cost related to share-based compensation arrangements, including stock options, restricted stock units and performance share units granted under the Plans. That cost is expected to be recognized over a weighted average period of 1.9 years. Stock Options The exercise price of each stock option may not be less than the fair market value of the Bancorp’s common stock on the date of grant, and options shall have a term of no more than ten years. Stock options are designated as either non-qualified or incentive stock options. For the years ended 2022, 2021 and 2020, all stock options granted by the Corporation were designated as non-qualified stock options. Washington Trust uses historical data to estimate stock option exercise and employee departure behavior in the option-pricing model. The expected term of options granted was derived from the output of the option valuation model and represents the period of time that options granted are expected to be outstanding. Expected volatility was based on historical volatility of Washington Trust shares. The risk-free rate for periods within the contractual life of the stock option was based on the U.S. Treasury yield curve in effect at the date of grant. The following presents the assumptions used in determining the grant date fair value of the stock option awards granted to certain key employees:
The following table presents a summary of stock options outstanding as of and for the year ended December 31, 2022:
The total intrinsic value is the amount by which the fair value of the underlying stock exceeds the exercise price of an option on the exercise date. The following table presents additional information concerning options outstanding and options exercisable at December 31, 2022:
The total intrinsic value of stock options exercised during the years ended December 31, 2022, 2021 and 2020 was $142 thousand, $897 thousand and $46 thousand, respectively. Restricted Stock Units In 2022, 2021 and 2020, the Corporation granted to directors and certain key employees 21,467, 19,185 and 27,385 restricted stock units, respectively, with 3-year cliff vesting. The following table presents a summary of restricted stock units as of and for the year ended December 31, 2022:
Performance Share Units The Corporation granted performance share units to certain key employees providing the opportunity to earn shares of common stock over a 3-year to 5-year performance period. The number of shares to be vested will be contingent upon the Corporation’s attainment of certain performance measures as detailed in the performance share unit award agreements. The following table presents a summary of outstanding performance share units as of December 31, 2022:
The following table presents a summary of performance share units as of and for the year ended December 31, 2022:
(1)The number of shares include adjustments made to performance measure estimates on outstanding awards that have not yet vested. The weighted average grant date fair value pertains only to awards granted during the year.
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