Share-Based Compensation

9 Months Ended

Sep. 30, 2020

Share-based Payment Arrangement [Abstract]

Share-Based Compensation

Share-Based Compensation

As of September 30, 2020, there were 1,616,672 shares of common stock available for grant under the Tutor Perini Corporation Omnibus Incentive Plan. During the first nine months of 2020 and 2019, the Company granted the following share-based instruments: (1) restricted stock units totaling 75,000 and 400,000 with weighted-average fair values per share of $13.93 and $20.90, respectively; (2) stock options totaling 75,000 and 135,000 with weighted-average fair values per share of $3.94 and $6.84, respectively, and weighted-average per share exercise prices of $25.70 and $20.94, respectively; and (3) unrestricted stock units totaling 194,177 and 98,591 with weighted-average fair values per share of $8.60 and $15.72, respectively.

The fair value of restricted and unrestricted stock units is based on the closing price of the Company’s common stock on the New York Stock Exchange on the date of the grant and the fair value of stock options is based on the Black-Scholes model. The fair value of stock options granted during the first nine months of 2020 was determined using the Black-Scholes model based on the following weighted-average assumptions: (i) expected life of 6.0 years, (ii) expected volatility of 44.91%, (iii) risk-free rate of 1.56%, and (iv) no quarterly dividends. Certain performance-based awards contain market condition components and are valued on the date of grant using a Monte Carlo simulation model.

For the three and nine months ended September 30, 2020, the Company recognized, as part of general and administrative expenses, costs for share-based payment arrangements totaling $2.5 million and $10.7 million, respectively, and $4.3 million and $14.3 million for the three and nine months ended September 30, 2019, respectively. As of September 30, 2020, the balance of unamortized share-based compensation expense was $9.6 million, which is expected to be recognized over a weighted-average period of 1.7 years.