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Stock-based compensation
 6 Months Ended
Jun. 30, 2023
Disclosure of compensation related costs sharebased payments [Abstract]  
Stock-based Compensation
Note 30 - Stock-based compensation
Incentive Plan
On May 12, 2020,
 
the shareholders of the
 
Corporation approved the Popular,
 
Inc. 2020 Omnibus Incentive Plan,
 
which permits the
Corporation to
 
issue several
 
types of
 
stock-based compensation
 
to employees
 
and directors
 
of the
 
Corporation and/or
 
any of
 
its
subsidiaries (the
 
“2020 Incentive
 
Plan”). The
 
2020 Incentive
 
Plan replaced
 
the Popular,
 
Inc. 2004
 
Omnibus Incentive
 
Plan, which
was in effect
 
prior to the adoption of
 
the 2020 Incentive Plan (the
 
“2004 Incentive Plan” and, together
 
with the 2020 Incentive
 
Plan,
the “Incentive Plan”). Participants under the Incentive Plan are designated by the Talent and Compensation Committee of the Board
of Directors (or its delegate, as determined by the Board). Under the Incentive Plan, the Corporation has issued restricted stock and
performance shares to its employees and restricted
 
stock and restricted stock units (“RSUs”)
 
to its directors.
The restricted
 
stock granted
 
under the
 
Incentive Plan
 
to employees
 
becomes 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
granted prior to 2021 was determined based on a two-prong vesting schedule. The first part is vested ratably over five or four years
commencing at the date of grant (“the graduated vesting portion”) and the second part is vested at termination of employment after
attainment of 55 years of age and 10 years of service or 60 years of age and 5 years of service (“the retirement vesting portion”).
The graduated vesting portion is accelerated at termination of employment after attaining 55 years of age and 10 years of service or
60 years of age and 5 years of service. Restricted stock granted on or after 2021 will vest ratably in equal annual installments over
a period of 4 years or 3 years, depending on the classification of the employee. The vesting schedule is accelerated at termination
of employment after attaining the earlier of 55 years of age and 10 years of service or 60 years of age and 5 years of service.
The
 
performance share
 
awards
 
granted
 
under
 
the
 
Incentive
 
Plan
 
consist
 
of
 
the
 
opportunity
 
to
 
receive
 
shares
 
of
 
Popular,
 
Inc.’s
common stock provided that the Corporation achieves certain goals during a three-year performance cycle.
 
The goals will be based
on
 
two
 
metrics
 
weighted
 
equally:
 
the
 
Relative
 
Total
 
Shareholder
 
Return
 
(“TSR”)
 
and
 
the
 
Absolute
 
Return
 
on
 
Average
 
Tangible
Common
 
Equity (“ROATCE”)
 
goal.
 
The
 
TSR
 
metric is
 
considered to
 
be
 
a market
 
condition under
 
ASC
 
718.
 
For
 
equity settled
awards based
 
on a
 
market condition,
 
the fair
 
value is
 
determined as
 
of the
 
grant date
 
and is
 
not subsequently
 
revised based
 
on
actual
 
performance.
 
The
 
ROATCE
 
metric
 
is
 
considered
 
to
 
be
 
a
 
performance
 
condition
 
under
 
ASC
 
718.
 
The
 
fair
 
value
 
is
determined based on the probability of achieving the ROATCE goal as of each reporting period.
 
The TSR and ROATCE metrics are
equally
 
weighted and
 
work independently.
 
The number of shares that will ultimately vest ranges from 50% to a 150% of target
based on both market (TSR) and performance (ROATCE) conditions. The performance shares vest at the end of the three-year
performance cycle. If a participant terminates employment after attaining the earlier of 55 years of age and 10 years of service or 60
years of age and 5 years of service, the performance shares shall continue outstanding and vest at the end of the performance
cycle.
The
 
following
 
table
 
summarizes
 
the
 
restricted
 
stock
 
and
 
performance
 
shares
 
activity
 
under
 
the
 
Incentive
 
Plan
 
for
 
members
 
of
management.
(Not in thousands)
Shares
Weighted-Average
Grant Date Fair
Value
Non-vested at December 31, 2021
321,883
$
47.98
Granted
194,791
84.29
Performance Shares Quantity Adjustment
6,947
78.02
Vested
 
(240,033)
66.11
Forfeited
(1,625)
78.86
Non-vested at December 31, 2022
281,963
$
56.50
Granted
258,018
67.04
Performance Shares Quantity Adjustment
11,499
75.96
Vested
 
(223,471)
66.77
Forfeited
(15,371)
55.82
Non-vested at June 30, 2023
312,638
$
58.20
During
 
the
 
quarter
 
ended
 
June
 
30,
 
2023,
130,815
 
shares
 
of
 
restricted
 
stock
 
(June
 
30,
 
2022
 
–
83,462
)
 
were
 
awarded
 
to
management under the Incentive
 
Plan. During the
 
quarters ended June 30,
 
2023 and 2022,
no
 
performance shares were awarded
to management
 
under the
 
Incentive Plan.
 
For the
 
six months
 
ended June
 
30, 2023,
200,303
 
shares of
 
restricted stock
 
(June 30,
2022 –
136,046
) and
57,715
 
performance shares (June 30, 2022 -
56,857
) were awarded to management under the
 
Incentive Plan.
 
During the quarter ended June 30, 2023, the Corporation recognized
 
$
3.3
 
million of restricted stock expense related to management
incentive awards, with a tax benefit of $
0.8
 
million (June 30, 2022 - $
2.9
 
million, with a tax benefit of $
0.7
 
million). For the six months
ended June 30, 2023, the Corporation recognized $
7.7
 
million of restricted stock expense related to management incentive awards,
with a tax benefit of
 
$
1.1
 
million (June 30, 2022 - $
7.5
 
million, with a tax benefit of
 
$
1.2
 
million). For the six months ended June
 
30,
2023, the fair market value
 
of the restricted stock and
 
performance shares vested was $
10.6
 
million at grant date
 
and $
13.4
 
million
at vesting date. This
 
differential triggers a windfall
 
of $
1.0
 
million that was recorded
 
as a reduction on
 
income tax expense.
 
During
the quarter ended June 30, 2023 the Corporation recognized
 
$
(0.1)
 
million of performance shares benefit, with a tax expense
 
of $
(4)
thousand due to
 
performance shares target
 
adjustment (June 30,
 
2022 - $
0.3
 
million, with a
 
tax benefit of
 
$
12
 
thousand).
 
For the
six months ended June 30, 2023, the Corporation recognized $
3.5
 
million of performance shares expense, with a tax benefit of $
0.1
million (June 30,
 
2022 -
 
$
4.0
 
million, with a
 
tax benefit
 
of $
0.3
 
million).
 
The total
 
unrecognized compensation cost
 
related to non-
vested
 
restricted stock
 
awards
 
and performance
 
shares to
 
members of
 
management at
 
June
 
30, 2023
 
was
 
$
15.8
 
million
 
and
 
is
expected to be recognized over a weighted-average
 
period of
1.9
 
years.
The following table summarizes the restricted stock
 
activity under the Incentive Plan for members of
 
the Board of Directors:
(Not in thousands)
RSUs / Unrestricted
stock
Weighted-Average
 
Grant Date Fair
Value per Unit
Non-vested at December 31, 2021
$
-
$
-
Granted
25,321
77.48
Vested
 
(25,321)
77.48
Forfeited
-
-
Non-vested at December 31, 2022
$
-
$
-
Granted
36,328
54.78
Vested
 
(36,328)
54.78
Forfeited
-
-
Non-vested at June 30, 2023
$
-
$
-
The
 
equity
 
awards
 
granted
 
to
 
members
 
of
 
the
 
Board
 
of
 
Directors
 
of
 
Popular,
 
Inc.
 
(the
 
“Directors”)
 
will
 
vest
 
and
 
become
 
non-
forfeitable on the
 
grant date of
 
such award. Effective
 
in May 2019,
 
all equity awards
 
granted to the
 
Directors may be
 
paid in either
restricted stock,
 
unrestricted stock or
 
RSUs
 
at each Directors election.
 
If RSUs are
 
elected, the Directors may
 
defer the delivery
 
of
the shares
 
of common
 
stock underlying
 
the RSUs
 
award until
 
their retirement.
 
To
 
the extent
 
that cash
 
dividends are
 
paid on
 
the
Corporation’s outstanding common stock, the
 
Directors
 
will receive an additional number
 
of RSUs that reflect
 
a reinvested dividend
equivalent.
 
For 2023
 
and 2022,
 
Directors elected
 
RSUs and
 
unrestricted stock.
 
During the
 
quarter ended
 
June 30,
 
2023,
32,999
 
RSUs and
2,300
 
unrestricted stocks
 
were granted
 
to the
 
Directors (June
 
30, 2022
 
-
23,022
 
RSUs) and
 
the Corporation
 
recognized expense
related
 
to
 
these
 
shares
 
of
 
$
1.9
 
million
 
with
 
a
 
tax
 
benefit
 
of
 
$
0.4
 
million
 
(June
 
30,
 
2022
 
-
 
$
1.8
 
million
 
with
 
a
 
tax
 
benefit
 
of
 
$
0.3
million).
 
For
 
the
 
six
 
months
 
ended
 
June
 
30,
 
2023,
 
the
 
Corporation
granted
34,028
 
RSUs
 
and
2,300
 
unrestricted
 
stocks
 
to
 
the
Directors (June 30, 2022 -
23,552
 
RSUs) and the Corporation recognized $
2.0
 
million of expense related to these shares, with a tax
benefit of $
0.4
 
million, (June 30,
 
2022 - $
1.8
 
million, with a
 
tax benefit of
 
$
0.3
 
million). The fair
 
value at vesting
 
date of the
 
shares
vested during the six months ended June 30, 2023
 
for the Directors was $
2.0
 
million.