Share-Based Compensation

12 Months Ended

Dec. 31, 2023

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, 2023, there were 987,001 shares of common stock available for grant under the Company’s Current Plan. As of December 31, 2023, the Plans had an aggregate of 2,682,894 RSUs 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 RSU grants in cash or shares. CPSU and DCA grants must only be settled in cash.

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 RSU, stock option, CPSU and DCA activity:


	RSUs			Stock Options			CPSUs			DCAs
	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		Number	Weighted- Average Grant Date Fair Value Per Unit
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	—	$	—
Granted	375,769	10.53		—	—		415,768	12.99		100,000	6.99
Expired or cancelled	(42,500)	19.27		(542,500)	11.66		—	—		—	—
Vested/exercised	(415,450)	20.14		—	—		—	—		—	—
Outstanding as of December 31, 2022	1,106,670	$	15.66	1,625,265	$	22.93	814,620	$	16.61	100,000	$	6.99
Granted	590,188	8.66		—	—		901,541	11.18		214,379	8.43
Expired or cancelled	(45,000)	16.19		(190,000)	19.88		(380,782)	20.37		—	—
Vested/exercised	(404,229)	15.75		—	—		(150,696)	11.98		(30,000)	8.98
Outstanding as of December 31, 2023	1,247,629	$	12.30	1,435,265	$	23.33	1,184,683	$	11.86	284,379	$	7.87
Vested and expected to vest at December 31, 2023	1,197,629	$	11.85	1,385,265	$	23.48	603,821	$	11.68	284,379	$	7.87

Included in the above table are certain RSU 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, 2023 and 2022, there were 50,000 and 125,000 RSUs with guaranteed minimum payouts outstanding, with weighted-average grant date fair values per share of $26.32 and $26.33, respectively.

The Company recognized liabilities for CPSUs, RSUs with guaranteed minimum payouts and DCAs totaling approximately $4.9 million and $2.1 million as of December 31, 2023 and 2022, respectively. The Company paid approximately $2.8 million in 2023, $3.6 million in 2022 and $0.3 million in 2021 to settle certain awards.

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
2021	101,894	$	15.47
2022	165,030	10.63
2023	302,112	5.66

The fair value of unrestricted stock awards issued during 2023, 2022 and 2021 was approximately $1.7 million, $1.8 million and $1.6 million, respectively.

The fair value of RSUs that vested during 2023, 2022 and 2021 was approximately $4.1 million, $5.7 million and $5.3 million, respectively. The fair value of CPSUs and DCAs that vested during 2023 was approximately $1.1 million and $0.2 million, respectively. There were no CPSUs or DCAs that vested during 2022 or 2021. As of December 31, 2023, the balance of unamortized RSU, CPSU and DCA expense was $7.2 million, $4.4 million and $1.6 million, respectively, which is expected to be recognized over weighted-average periods of 1.6 years for RSUs, 1.9 years for CPSUs and 2.3 years for DCAs. As of December 31, 2023, the remaining balance of unamortized stock option expense was immaterial.

The 1,435,265 outstanding stock options as of December 31, 2023 had an intrinsic value of zero and a weighted-average remaining contractual life of 2.9 years. Of those outstanding options: (1) 1,335,265 were exercisable with an intrinsic value of zero, a weighted-average exercise price of $23.64 per share and a weighted-average remaining contractual life of 2.6 years; (2) 100,000 have not vested and have no intrinsic value, a weighted-average exercise price of $19.24 per share and a weighted-average remaining contractual life of 7.2 years.

No options were granted in either 2023 and 2022. The fair value on the grant date and the significant assumptions used in the Black-Scholes option-pricing model for grants made in the year ended December 31, 2021 were as follows:


	Year Ended December 31,
		2021
Total stock options granted		100,000
Weighted-average grant date fair value		$	15.21
Weighted-average assumptions:
Risk-free rate		1.4		%
Expected life of options(a)		6.5 years
Expected volatility(b)		73.7		%
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 years ended December 31, 2023, 2022 and 2021, the Company recognized, as part of general and administrative expenses, costs for share-based payment arrangements for employees of $10.5 million, $7.4 million and $10.0 million, respectively. 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 $1.7 million, $1.6 million and $1.6 million, respectively. The aggregate tax benefits for these awards were approximately $0.3 million, $0.9 million and $1.2 million, for the respective periods. During the year ended December 31, 2023, share-based compensation was reduced by $0.5 million due to the modification of certain share-based awards. The modifications related to the separation of certain employees from the Company. The modifications also resulted in a modification-date fair value totaling $0.4 million which will be amortized as share-based compensation expense through March 2024.