Equity Plans

9 Months Ended

Sep. 30, 2020

Share-based Payment Arrangement [Abstract]

Equity Plans

SJW Group accounts for stock-based compensation based on the grant date fair value of awards issued to employees in accordance with FASB ASC Topic 718 - “Compensation - Stock Compensation,” which requires the measurement and recognition of compensation expense based on the estimated fair value of stock-based payment awards.

The Incentive Plan allows SJW Group to provide employees, non-employee board members or the board of directors of any parent or subsidiary, consultants, and other independent advisors who provide services to the company or any parent or subsidiary the opportunity to acquire an equity interest in SJW Group. The types of awards included in the Incentive Plan are restricted stock awards, restricted stock units, performance shares, or other share-based awards. As of September 30, 2020, 182,367 shares are issuable upon the exercise of outstanding restricted stock units and deferred restricted stock units and an additional 743,038 shares are available for award issuances under the Incentive Plan. In addition, shares are issued to employees under the company’s ESPP.

In connection with the merger with CTWS on October 9, 2019, SJW Group assumed outstanding awards of restricted stock units and deferred share units under the following stock plans: CTWS 2014 Performance Stock Program, CTWS 2004 Performance Stock Program and CTWS 1994 Performance Stock Program (collectively, the “CTWS Plans”). As of September 30, 2020, approximately 66,430 shares are issuable upon the exercise of outstanding restricted stock units and deferred restricted stock units under the CTWS Plans.

Stock compensation costs charged to income are recognized on a straight-line basis over the requisite service period. A summary of compensation costs charged to income and proceeds from the exercise of any restricted stock and similar instruments that are recorded to additional paid-in capital and common stock, by award type, are presented below for the three and nine months ended September 30, 2020, and 2019.



	Three months ended September 30,			Nine months ended September 30,
	2020		2019	2020		2019
Adjustments to additional paid-in capital and common stock for:
Compensation costs charged to income:
ESPP	$	152	140	$	323	283
Restricted stock and deferred restricted stock	906		812	1,995		2,273
Total compensation costs charged to income	$	1,058	952	$	2,318	2,556
ESPP proceeds	$	860	792	$	1,830	1,603

Stock, Restricted Stock and Deferred Restricted Stock

For the three months ended September 30, 2020, and 2019, SJW Group granted under the Incentive Plan 761 and 0, respectively, three year service-based restricted stock awards with a weighted-average grant date fair value of $58.63 and $0, respectively, per unit.

For the nine months ended September 30, 2020, and 2019, SJW Group granted under the Incentive Plan 43,474 and 26,565, respectively, one year and three year service-based restricted stock awards with a weighted-average grant date fair value of $63.87 and $51.42, respectively, per unit.

Performance-based and market-based restricted stock awards granted for the three months ended September 30, 2020, and 2019 were 58 and 0 target units, respectively, with a weighted-average grant date fair value of $62.95 and $0 respectively, per unit.

Performance-based and market-based restricted stock awards granted for the nine months ended September 30, 2020, and 2019 were 24,777 and 30,401 target units, respectively, with a weighted-average grant date fair value of $65.02 and $60.46, respectively, per unit. Based upon actual attainment relative to the target performance metric, the number of shares issuable can range between 0% to 150% of the target number of shares for performance-based restricted stock awards, or between 0% and 200% of the target number of shares for market-based restricted stock awards.

As of September 30, 2020, the total unrecognized compensation costs related to restricted and deferred restricted stock plans amounted to $4,987. This cost is expected to be recognized over a weighted-average period of 1.86 years.

Employee Stock Purchase Plan

The ESPP allows eligible employees to purchase shares of SJW Group’s common stock at 85% of the fair value of shares on the purchase date. Under the ESPP, employees can designate up to a maximum of 10% of their base compensation for the purchase of shares of common stock, subject to certain restrictions. A total of 400,000 shares of common stock have been reserved for issuance under the ESPP.

SJW Group’s recorded expenses were $85 and $244 for the three and nine months ended September 30, 2020, respectively, and $82 and $223 for the three and nine months ended September 30, 2019, respectively, related to the ESPP. The total unrecognized compensation costs related to the semi-annual offering period that ends January 29, 2021, for the ESPP is approximately $116. This cost is expected to be recognized during the fourth quarter of 2020 and first quarter of 2021.