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Stock-based compensation
 3 Months Ended
Mar. 31, 2024
Disclosure of compensation related costs sharebased payments [Abstract]  
Stock-based Compensation
Note 29 - Stock-based compensation
On May 12,
 
2020, the stockholders 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 the earlier of 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”).
 
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, 2022
281,963
$
56.50
Granted
257,757
66.01
Performance Shares Quantity Adjustment
19,753
75.32
Vested
 
(243,133)
66.31
Forfeited
(16,444)
55.82
Non-vested at December 31, 2023
299,896
$
58.20
Granted
143,084
85.57
Performance Shares Quantity Adjustment
33,858
88.92
Vested
 
(185,177)
79.81
Forfeited
411
69.92
Non-vested at March 31, 2024
292,072
$
61.48
During the
 
quarter ended
 
March 31,
 
2024,
77,859
 
shares of
 
restricted stock
 
(March 31,
 
2023 -
69,488
) and
65,225
 
performance
shares (March 31, 2023 -
57,715
) were awarded to management under the
 
Incentive Plan.
 
During
 
the
 
quarter
 
ended
 
March
 
31,
 
2024,
 
the
 
Corporation
 
recognized
 
$
6.4
 
million
 
of
 
restricted
 
stock
 
expense
 
related
 
to
management incentive awards, with a tax benefit of $
0.6
 
million (March 31, 2023 - $
4.4
 
million, with a tax benefit of $
0.3
 
million). For
the quarter ended
 
March 31, 2024,
 
the fair market
 
value of the
 
restricted stock and performance
 
shares vested was
 
$
9.5
 
million at
grant date
 
and $
13.2
 
million at
 
vesting date.
 
This excess
 
requires the
 
recognition of
 
a windfall
 
tax benefit
 
of $
1.4
 
million that
 
was
recorded as a
 
reduction in income
 
tax expense. For
 
the quarter ended
 
March 31, 2024,
 
the Corporation recognized
 
$
5.0
 
million of
performance shares expense, with a tax benefit of $
0.3
 
million (March 31, 2023 - $
3.6
 
million, with a tax benefit of $
0.1
 
million). The
total
 
unrecognized
 
compensation
 
cost
 
related
 
to
 
non-vested
 
restricted
 
stock
 
awards
 
and
 
performance
 
shares
 
to
 
members
 
of
management at March 31, 2024 was $
11.4
 
million and is expected to be recognized over
 
a weighted-average period of
1.79
 
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, 2022
-
$
-
Granted
39,104
55.30
Vested
 
(39,104)
55.30
Forfeited
-
-
Non-vested at December 31, 2023
-
$
-
Granted
1,195
82.08
Vested
 
(1,195)
82.08
Forfeited
-
-
Non-vested at March 31, 2024
-
$
-
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
common stock or RSUs, at the Directors’ election. If RSUs are elected
 
the Directors may defer the delivery of the shares of common
stock underlying the RSUs award after 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 reinvested dividend equivalent.
 
During the quarter ended March 31,
 
2024,
1,195
 
RSUs were granted to the
 
Directors (March 31, 2023 -
1,029
).
 
During this period,
the Corporation
 
recognized $
98
 
thousand of
 
restricted stock
 
expense related
 
to
 
these RSUs,
 
with a
 
tax
 
benefit of
 
$
18
 
thousand
(March 31, 2023
 
- $
67
 
thousand, with a
 
tax benefit of
 
$
13
 
thousand). The fair
 
value at vesting
 
date of the
 
RSUs vested during the
quarter ended March 31, 2024 for Directors was
 
$
98
 
thousand