Stock-based compensation

6 Months Ended

Jun. 30, 2012

Notes to Financial Statements [Abstract]

Disclosure Of Compensation Related Costs Share Based Payments [Text Block]

Note 28- Stock-based compensation

The Corporation maintained a Stock Option Plan (the “Stock Option Plan”), which permitted the granting of incentive awards in the form of qualified stock options, incentive stock options, or non-statutory stock options of the Corporation. In April 2004, the Corporation's shareholders adopted the Popular, Inc. 2004 Omnibus Incentive Plan (the “Incentive Plan”), which replaced and superseded the Stock Option Plan. The adoption of the Incentive Plan did not alter the original terms of the grants made under the Stock Option Plan prior to the adoption of the Incentive Plan.

Stock Option Plan

Employees and directors of the Corporation or any of its subsidiaries were eligible to participate in the Stock Option Plan. The Board of Directors or the Compensation Committee of the Board had the absolute discretion to determine the individuals that were eligible to participate in the Stock Option Plan. This plan provided for the issuance of Popular, Inc.'s common stock at a price equal to its fair market value at the grant date, subject to certain plan provisions. The shares are to be made available from authorized but unissued shares of common stock or treasury stock. The Corporation's policy has been to use authorized but unissued shares of common stock to cover each grant. The maximum option term is ten years from the date of grant. Unless an option agreement provides otherwise, all options granted are 20% exercisable after the first year and an additional 20% is exercisable after each subsequent year, subject to an acceleration clause at termination of employment due to retirement.

	(Not in thousands)
Exercise price range per share					Options outstanding	Weighted-average exercise price of options outstanding		Weighted-average remaining life of options outstanding in years	Options exercisable (fully vested)	Weighted-average exercise price of options exercisable
$	158.35	-	$	185.00	58,978	$	167.85	0.69	58,978	$	167.85
$	192.50	-	$	272.00	107,237	$	252.51	2.01	107,237	$	252.51
$	158.35	-	$	272.00	166,215	$	222.47	1.54	166,215	$	222.47

There was no intrinsic value of options outstanding at June 30, 2012and 2011. There was no intrinsic value of options exercisable at June 30,2012 and 2011.

The following table summarizes the stock option activity and related information:

(Not in thousands)	Options Outstanding		Weighted-Average Exercise Price
Outstanding at December 31, 2010	227,518	$	206.71
Granted	-		-
Exercised	-		-
Forfeited	-		-
Expired	(20,572)		195.48
Outstanding at December 31, 2011	206,946	$	207.83
Granted	-		-
Exercised	-		-
Forfeited	-		-
Expired	(40,731)		148.06
Outstanding at June 30, 2012	166,215	$	222.47

The stock options exercisable at June 30,2012totaled 166,215(June 30,2011 – 210,303). There were no stock options exercised during the quarters and six months ended June 30,2012and 2011. Thus, there was no intrinsic value of options exercised during the quarters and six months ended June 30,2012and 2011.

There were no new stock option grants issued by the Corporation under the Stock Option Plan during 2011 and 2012.

There was no stock option expense recognized for the quarters and six months ended June 30,2012and 2011.

Incentive Plan

The Incentive Plan permits the granting of incentive awards in the form of Annual Incentive Awards, Long-term Performance Unit Awards, Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Units or Performance Shares. Participants in the Incentive Plan are designated by the Compensation Committee of the Board of Directors (or its delegate as determined by the Board). Employees and directors of the Corporation and/or any of its subsidiaries are eligible to participate in the Incentive Plan.

Under the Incentive Plan, the Corporation has issued restricted shares, which become vested based on the employees' continued service with Popular. Unless otherwise stated in an agreement, the compensation cost associated with the shares of restricted stock is determined based on a two-prong vesting schedule. The first part is vested ratably over five years commencing at the date of grant and the second part is vested at termination of employment after attainment of 55 years of age and 10 years of service. The five-year vesting part is accelerated at termination of employment after attaining 55 years of age and 10 years of service. The restricted shares granted consistent with the requirements of the Troubled Asset Relief Program (“TARP”) Interim Final Rule vest in two years from grant date.

The following table summarizes the restricted stock activity under the Incentive Plan for members of management.

(Not in thousands)	Restricted Stock		Weighted-Average Grant Date Fair Value
Non-vested at December 31, 2010	113,174	$	36.06
Granted	155,945		32.35
Vested	(5,156)		89.97
Forfeited	(22,029)		42.03
Non-vested at December 31, 2011	241,934	$	31.98
Granted	359,427		17.72
Vested	(93,768)		38.14
Forfeited	(2,007)		36.39
Non-vested at June 30, 2012	505,586	$	20.68

During the quarter ended June 30,2012, 207,237shares of restricted stock (June 30,2011 – 63,689)were awarded to management under the Incentive Plan, of which 100,980 shares (June 30,2011 – 18,788) were awarded to management consistent with the requirements of the TARP Interim Final Rule. For thesix-month period ended June 30,2012, 359,427 shares of restricted stock (June 30,2011 – 155,945)were awarded to management under the Incentive Plan, of which 253,170shares (June 30,2011 –111,045) were awarded to management consistent with the requirements of the TARP Interim Final Rule.

Beginning in 2007, the Corporation authorized the issuance of performance shares, in addition to restricted shares, under the Incentive Plan. The performance share awards consist of the opportunity to receive shares of Popular Inc.'s common stock provided that the Corporation achieves certain performance goals during a three-year performance cycle. The compensation cost associated with the performance shares is recorded ratably over a three-year performance period. The performance shares are granted at the end of the three-year period and vest at grant date, except when the participant's employment is terminated by the Corporation without cause. In such case, the participant would receive a pro-rata amount of shares calculated as if the Corporation would have met the performance goal for the performance period.During the six months ended June 30,2012 and 2011, no performanceshares were granted under this plan.

During the quarter ended June 30,2012, the Corporation recognized $ 1.2million of restricted stock expense related to management incentive awards, with a tax benefit of $ 0.3million (June 30,2011 - $ 0.8 million, with atax benefit of $ 0.2million). For the six-month period ended June 30,2012, the Corporation recognized $ 2.1million of restricted stock expense related to management incentive awards, with a tax benefit of $ 0.5million (June 30,2011 - $ 1.3 million, with a tax benefit of $ 0.3million). During the quarter ended June 30,2012, there was vesting of restricted stock. For the six-month period ended June 30,2012, the fair market value of the restricted stock vested was $2.7millionat grant date and $1.6millionat vesting date. This triggers a shortfallof $0.3million that was recorded as an additional income tax expense at the applicable income tax rate. No additional income tax expense was recorded for the U.S. employees due to the valuation allowance of the deferred tax asset. There was no performance share expense recognized for the quarters and six months ended June 30,2012 and 2011. The total unrecognized compensation cost related to non-vested restricted stock awards and performance shares to members of management at June 30,2012 was $ 12.0million and is expected to be recognized over a weighted-average period of 1.5years.

The following table summarizes the restricted stock activity under the Incentive Plan for members of the Board of Directors:

(Not in thousands)	Restricted Stock		Weighted-Average Grant Date Fair Value
Non-vested at December 31, 2010	-		-
Granted	30,163	$	26.72
Vested	(30,163)		26.72
Forfeited	-		-
Non-vested at December 31, 2011	-		-
Granted	34,478	$	16.27
Vested	(34,478)		16.27
Forfeited	-		-
Non-vested at June 30, 2012	-		-

During the quarter ended June 30,2012, the Corporation granted 29,103shares of restricted stock to members of the Board of Directors of Popular, Inc. and BPPR, which became vested at grant date (June 30,2011 – 19,542). During this period, the Corporation recognized $0.1million of restricted stock expense related to these restricted stock grants, with a tax benefit of $33thousand (June 30,2011 - $0.1million, with a tax benefit of $35thousand). For the six-month period ended June 30,2012, the Corporation granted 34,478shares of restricted stock to members of the Board of Directors of Popular, Inc. and BPPR, which became vested at grant date (June 30,2011 – 21,871). During this period, the Corporation recognized $0.2million of restricted stock expense related to these restricted stock grants, with a tax benefit of $70thousand (June 30,2011 - $0.2million, with a tax benefit of $70thousand). The fair value at vesting date of the restricted stock vested during thesix months ended June 30,2012for directors was $ 0.6 million.