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SHARE BASED COMPENSATION
 12 Months Ended
Dec. 31, 2022
Share-Based Payment Arrangement [Abstract]  
SHARE BASED COMPENSATION SHARE-BASED COMPENSATION Share-based awards are provided to officers, non-officer employees, and trustees under our 2015 Incentive Plan approved by shareholders on September 15, 2015, as amended and restated on May 18, 2021 which allows for awards in the form of cash, unrestricted, and restricted common shares, stock options, stock appreciation rights, and restricted stock units (“RSUs”) up to an aggregate of 775,000 shares over the ten-year period in which the plan will be in effect. Under our 2015 Incentive Plan,
officers and non-officer employees may earn share awards under a long-term incentive plan (“LTIP”), which is a forward-looking program that measures long-term performance over the stated performance period. These awards are payable to the extent deemed earned in shares. The terms of the long-term incentive awards granted under the program may vary from year to year. Through December 31, 2022, awards under the 2015 Incentive Plan consisted of restricted and unrestricted common shares, RSUs, and stock options. We account for forfeitures of restricted and unrestricted common shares, RSUs, and stock options when they occur instead of estimating the forfeitures.
Year Ended December 31, 2022 LTIP Awards
Awards granted to employees on January 1, 2022, consist of an aggregate of 5,849 time-based RSU awards, 13,407 performance based RSUs based on total shareholder return (“TSR”), and 30,002 stock options. The time-based RSUs vest as to one-third of the shares on each of January 1, 2023, January 1, 2024, and January 1, 2025. The stock options vest as to 25% on each of January 1, 2023, January 1, 2024, January 1, 2025, and January 1, 2026 and expire 10 years after grant date. The fair value of stock options was $17.094 per share and was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions:
2022
Exercise price$110.90 
Risk-free rate1.44 %
Expected term6.25 years
Expected volatility21.2 %
Dividend yield2.597 %
The TSR performance RSUs are earned based on the Company’s TSR as compared to the FTSE Nareit Apartment Index over a forward looking three-year period. The maximum number of RSUs eligible to be earned is 26,814 RSUs, which is 200% of the RSUs granted. Earned awards (if any) will fully vest as of the last day of the measurement period. These awards have market conditions in addition to service conditions that must be met for the awards to vest. Compensation expense is recognized ratably based on the grant date fair value, as determined using the Monte Carlo valuation model, regardless of whether the market conditions are achieved and the awards ultimately vest. Therefore, previously recorded compensation expense is not adjusted in the event that the market conditions are not achieved. The Company based the expected volatility on a weighted average of the historical volatility of the Company’s daily closing share price and a select peer average volatility, the risk-free interest rate on the interest rates on U.S. treasury bonds with a maturity equal to the remaining performance period of the award, and the expected term on the performance period of the award. The assumptions used to value the TSR performance RSUs were an expected volatility of 22.40%, a risk-free interest rate of 0.97%, and an expected life of 3 years. The share price at the grant date, January 1, 2022, was $110.90 per share.
Awards granted to employees on February 1, 2022, consist of an aggregate of 1,295 time-based RSU awards which vest as to one-third of the RSUs on each of February 1, 2023, February 1, 2024, and February 1, 2025.
Awards granted to trustees on May 17, 2022 consisted of 6,563 RSUs with a one-year vesting period. All of these awards are classified as equity awards. We recognize compensation expense associated with the time-based awards ratably over the requisite service period. The fair value of share awards at grant date for non-employee trustees was approximately $618,000, $425,000, and $533,000 for the years ended December 31, 2022, 2021, and 2020, respectively.
Share-Based Compensation Expense 
Total share-based compensation expense recognized in the consolidated financial statements for the years ended December 31, 2022, 2021, and 2020, for all share-based awards was as follows:
(in thousands)
 Year Ended December 31,
 202220212020
Share based compensation expense$2,615 $2,689 $2,106 
Restricted Stock Units
During the year ended December 31, 2022, we issued 8,203 time-based RSUs to employees and 7,156 to trustees. The RSUs to employees generally vest over a three-year period and the RSUs to trustees generally vest over a one-year period. The fair value of the time-based RSUs granted during the year ended December 31, 2022 was $1.5 million. The total compensation cost
related to non-vested time-based RSUs not yet recognized is $646,000, which we expect to recognize over a weighted average period of 1.3 years.
The unamortized value of RSUs with market conditions as of December 31, 2022, 2021, and 2020, was approximately $1.7 million, $1.1 million, and $487,000, respectively.
The activity for the years ended December 31, 2022, 2021, and 2020, related to our RSUs was as follows:
RSUs with Service ConditionsRSUs with Market Conditions
  Wtd Avg Grant- Wtd Avg Grant-
 SharesDate Fair ValueSharesDate Fair Value
Unvested at December 31, 201922,346 $58.41 37,822 $68.62 
Granted17,981 68.25 — — 
Vested(14,991)59.10 (13,357)74.68 
Change in awards(1)
— — 4,436 — 
Forfeited(508)62.99 (1,907)63.92 
Unvested at December 31, 202024,828 $65.03 26,994 $67.87 
Granted13,693 71.54 19,224 87.04 
Vested(17,065)63.42 (35,920)65.34 
Change in awards(1)
— — 8,926 — 
Forfeited(482)70.44 — — 
Unvested at December 31, 202120,974 $69.97 19,224 $87.04 
Granted15,359 96.29 13,559 131.05 
Vested(13,357)69.24 — — 
Forfeited(1,562)76.49 (2,741)87.04 
Unvested at December 31, 202221,414 $88.83 30,042 $106.90 
(1)Represents the change in the number of restricted stock units earned at the end of the measurement period.
Stock Options
During the year ended December 31, 2022, we issued 30,245 stock options to employees. The stock options vest over a four-year period. The weighted average grant date fair value of the stock options granted during the year ended December 31, 2022 was $17.02 per share. The total compensation costs related to non-vested stock options not yet recognized is $363,000, which we expect to recognize over a weighted average period of 2.53 years.
The stock option activity for the years ended December 31, 2022, 2021, and 2020 was as follows:
Number of SharesWeighted Average Exercise Price
Outstanding at December 31, 2019— — 
Granted141,000 $66.36 
Exercised— — 
Forfeited(1,952)66.36 
Outstanding at December 31, 2020139,048 $66.36 
Exercisable at December 31, 2020— — 
Granted43,629 70.64 
Exercised— — 
Forfeited— — 
Outstanding at December 31, 2021182,677 $67.38 
Exercisable at December 31, 202134,758 66.36 
Granted30,245 110.67 
Exercised— — 
Forfeited(16,299)67.59 
Outstanding at December 31, 2022196,623 $74.02 
Exercisable at December 31, 202280,421 $66.94 
The intrinsic value of a stock option represents the amount by which the current price of the underlying stock exceeds the exercise price of the option. As of December 31, 2022, stock options outstanding had no aggregate intrinsic value with a weighted average remaining contractual term of 6.74 years.