Share-Based Compensation

12 Months Ended

Dec. 31, 2021

Share-based Payment Arrangement [Abstract]

On April 10, 2018, the Company adopted the Tutor Perini Corporation Omnibus Incentive Plan (the “Current Plan”), which was approved by the Company’s shareholders on May 23, 2018. The Current Plan effected the merger of the Company’s Amended and Restated Tutor Perini Corporation Long-Term Incentive Plan, as amended and restated on October 2, 2014 (the “2014 Plan”) and the Tutor Perini Corporation Incentive Compensation Plan adopted on April 3, 2017 (the “2017 Plan,” together with the 2014 Plan and the Current Plan, the “Plans”). As of December 31, 2021, there were 1,243,070 shares of common stock available for grant under the Company’s Current Plan. As of December 31, 2021, the Plans had an aggregate of 3,356,616 restricted stock units and stock options from outstanding, historical awards that either have not vested or have vested but have not been exercised. Any awards that were granted under the Plans that are forfeited, cancelled or held back for net settlement will become available to be issued under the Current Plan.

The terms of the Plans give the Company the right to settle the vesting of share-based grants in cash or shares.

Many of the awards issued under the Plans contain separate tranches, each for a separate performance period and each with a performance target to be established subsequent to the award date; accordingly, the tranches are accounted for under ASC 718,

Stock Compensation (“ASC 718”) as separate grants, with the grant date being the date the performance targets for a given tranche are established and communicated to the grantee. Similarly, for these awards, compliance with the requirements of the Plans is also based on the number of units granted in a given year, as determined by ASC 718, rather than the number of units awarded in a given year.

The following table summarizes restricted stock unit, stock option and CPSU activity:


	Restricted Stock Units			Stock Options			CPSUs
	Number	Weighted- Average Grant Date Fair Value Per Share		Number	Weighted- Average Exercise/ (Strike) Price Per Share		Number	Weighted- Average Grant Date Fair Value Per Unit
Outstanding as of December 31, 2018	1,469,000	$	27.27	2,943,044	$	20.89	—	$	—
Granted	530,000	20.23		220,000	19.66		—	—
Expired or cancelled	(104,029)	28.98		(884,029)	21.03		—	—
Vested/exercised	(179,971)	25.39		—	—		—	—
Outstanding as of December 31, 2019	1,715,000	$	25.19	2,279,015	$	20.62	—	$	—
Granted	245,000	20.67		165,000	19.24		—	—
Expired or cancelled	(403,750)	25.52		(168,750)	25.87		—	—
Vested/exercised	(521,250)	29.44		—	—		—	—
Outstanding as of December 31, 2020	1,035,000	$	21.85	2,275,265	$	20.13	—	$	—
Granted	678,851	16.26		100,000	19.24		398,852	20.39
Expired or cancelled	(155,000)	15.37		(202,500)	20.07		—	—
Vested/exercised	(370,000)	23.53		(5,000)	13.32		—	—
Outstanding as of December 31, 2021	1,188,851	$	18.98	2,167,765	$	20.11	398,852	$	20.39

Included in the above table are certain restricted stock unit grants which are classified as liabilities in accordance with ASC 718 because they contain a guaranteed minimum payout. These awards may be performance-based or time-based and may be settled in shares of the Company's stock, cash or a combination thereof, at the Company's discretion. As of December 31, 2021 and 2020, there were 260,000 and 270,000 restricted stock units with guaranteed minimum payouts outstanding, with weighted-average grant date fair values per share of $27.53 and $27.80, respectively.

The Company recognized liabilities for CPSUs and restricted stock units with guaranteed minimum payouts totaling approximately $4.8 million and $2.4 million as of December 31, 2021 and 2020, respectively. The Company paid approximately $0.3 million in each of 2021 and 2020 to settle liability-classified awards, and there were no cash settlements in 2019.

The following table summarizes unrestricted stock awards, which are generally issued to the non-employee members of the Company’s Board of Directors as part of their annual retainer fees:


	Unrestricted Stock Awards
Year	Number	Weighted-Average Grant Date Fair Value Per Share
2019	98,591	$	15.72
2020	194,177	8.60
2021	101,894	15.47

The fair value of unrestricted stock awards issued during 2021, 2020 and 2019 was approximately $1.6 million, $1.7 million and $1.5 million, respectively.

The fair value of restricted stock units that vested during 2021, 2020 and 2019 was approximately $5.3 million, $4.1 million and $3.1 million, respectively. As of December 31, 2021, the balance of unamortized restricted stock, stock option and CPSU expense was $12.9 million, $2.0 million and $6.8 million, respectively, which is expected to be recognized over weighted-average periods of 1.9 years for restricted stock units, 1.9 years for stock options and 2.0 years for CPSUs.

The 2,167,765 outstanding stock options as of December 31, 2021 had an intrinsic value of $0.6 million and a weighted-average remaining contractual life of 3.8 years. Of those outstanding options: (1) 1,842,765 were exercisable with an intrinsic value of $0.6 million, a weighted-average exercise price of $20.77 per share and a weighted-average remaining contractual life of 3.0 years; (2) 325,000 have not vested and have no intrinsic value, a weighted-average exercise price of $16.37 per share and a weighted-average remaining contractual life of 8.5 years. The 325,000 unvested stock options include 187,500 with time-based or market-based vesting conditions that are expected to vest, as well as 137,500 with market-based vesting conditions that are not expected to vest.

The fair value on the grant date and the significant assumptions used in the Black-Scholes option-pricing model are as follows:


	Year Ended December 31,
	2021			2020			2019
Total stock options granted	100,000			165,000			220,000
Weighted-average grant date fair value	$	15.21		$	7.67		$	7.59
Weighted-average assumptions:
Risk-free rate	1.4		%	1.2		%	2.1		%
Expected life of options(a)	6.5 years			6.3 years			6.1 years
Expected volatility(b)	73.7		%	60.7		%	39.4		%
Expected quarterly dividends	$	—		$	—		$	—

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(a)Calculated using the simplified method due to the terms of the stock options and the limited pool of grantees.

(b)Calculated using historical volatility of the Company’s common stock over periods commensurate with the expected life of the option.

For the respective years ended December 31, 2021, 2020 and 2019, the Company recognized, as part of general and administrative expenses, costs for share-based payment arrangements for employees of $10.0 million, $10.2 million and $17.5 million. Additionally for the same periods, the Company recognized as part of general and administrative expenses, costs for share-based awards to non-employee directors of $1.6 million for each of the three years. The aggregate tax benefits for these awards were approximately $1.2 million, $1.3 million and $2.9 million, for the respective periods.