Stock-Based Compensation Plans

12 Months Ended

Dec. 31, 2019

Share-based Payment Arrangement, Noncash Expense [Abstract]

STOCK-BASED COMPENSATION PLANS

Pursuant to our Amended and Restated Incentive Compensation Plan (the “Incentive Plan”), we can grant stock-based awards in the form of restricted stock, restricted stock units and stock options to team members, officers, directors, and contractors at any time prior to March 26, 2022. On March 26, 2012, our board of directors approved an amendment to our Incentive Plan, increasing the number of shares authorized for issuance by 500,000 shares, to 2.0 million shares. The shares available for future grants under the Incentive Plan totaled 121,621 as of December 31, 2019.

Restricted Stock

We grant performance-based and time-based shares of restricted stock to team members in accordance with our Incentive Plan. The grant-date fair value per share is estimated to equal the market price of our common stock on the date of grant. Based on the terms of individual restricted stock grant agreements, shares vest under one of the following methods:


•	Over a period of 15 years, based on continuous employment and a combination of the cumulative improvement in our annual adjusted economic profit, a non-GAAP financial measure, and the attainment of annual adjusted economic profit targets.


•	Over a period of three years, based on continuous employment.

A summary of the non-vested restricted stock activity under the Incentive Plan for the year ended December 31, 2019 is presented below:



Restricted Stock	Number of Shares		Weighted Average Grant-Date Fair Value Per Share
Non-vested as of December 31, 2018	150,647		$	117.41
Granted	5,301		441.54
Vested	(17,971	)	148.14
Forfeited	(474	)	363.16
Non-vested as of December 31, 2019	137,503		$	125.04

The grant-date weighted average fair value of shares granted in 2019, 2018 and 2017 was $441.54, $317.87, and $200.79, respectively. The total fair value of shares vested was $7.9 million in 2019, $4.8 million in 2018 and $5.6 million in 2017.

Restricted Stock Units

We grant performance-based restricted stock units to team members and directors in accordance with our Incentive Plan. The grant-date fair value per share is estimated to equal the market price of our common stock on the date of grant. Each restricted stock unit represents and has a value equal to one share of common stock. Based on the terms of individual restricted stock grant agreements, restricted stock units vest under one of the following methods:


•	Over a period of ten years, based on continuous employment and the cumulative improvement in our annual adjusted economic profit.


•	Over a period of five years, based upon the compounded annual growth rate in our adjusted economic profit.


•	Over a period of one to four years, based on continuous employment and the compounded annual growth rate in our adjusted EPS, a non-GAAP financial measure.

A summary of the restricted stock unit activity under the Incentive Plan for the year ended December 31, 2019, is presented below:



Restricted Stock Units	Number of Restricted Stock Units		Weighted Average Grant-Date Fair Value Per Share		Aggregate Intrinsic Value (2) (in millions)		Weighted Average Remaining Contractual Term (in years)
Outstanding as of December 31, 2018	516,773		$	127.07
Granted	3,000		453.64
Converted	(87,842	)	106.54
Forfeited	(3,100	)	206.45
Outstanding as of December 31, 2019 (1)	428,831		$	132.99	$	189.7	4.1
Vested as of December 31, 2019	285,250		$	124.67	$	126.2	3.6


(1)	No RSUs outstanding at December 31, 2019 were convertible to shares of common stock.


(2)	The intrinsic value of RSUs is measured by applying the closing stock price as of December 31, 2019 to the applicable number of units.

The grant-date weighted average fair value of RSUs granted in 2019, 2018 and 2017 was $453.64, $363.11, and $206.45, respectively. The total intrinsic value of RSUs converted to common stock during 2019, 2018 and 2017 was $36.9 million, $0.5 million, and $6.9 million, respectively.

Stock-based compensation expense

Stock-based compensation expense consists of the following:



(In millions)	For the Years Ended December 31,
	2019		2018		2017
Restricted stock	$	3.0	$	2.7	$	2.9
Restricted stock units	4.6		7.6		12.5
Total	$	7.6	$	10.3	$	15.4

While the stock-based awards are often expected to vest in equal, annual installments over the corresponding requisite service periods of the grants, the related stock-based compensation expense is not recognized on a straight-line basis over the same periods. Each installment is accounted for as a separate award and as a result, the fair value of each installment is recognized as stock-based compensation expense on a straight-line basis over the related expected vesting period. Assuming performance targets are achieved in the periods currently estimated, we expect to recognize the remaining expense for stock-based awards outstanding as of December 31, 2019 over a weighted average period of 1.7 years, as follows:



(In millions)
For the Years Ended December 31,	Restricted Stock Units		Restricted Stock		Total Projected Expense
2020	$	2.8	$	1.9	$	4.7
2021	0.6		1.2		1.8
2022	0.1		0.9		1.0
2023	—		0.7		0.7
2024	—		0.5		0.5
Thereafter	—		0.5		0.5
Total	$	3.5	$	5.7	$	9.2