Stock-based Compensation

3 Months Ended

Mar. 31, 2024

Notes to Financial Statements

Stock-Based Compensation

8.     Stock-Based Compensation

The Company has a long-term incentive compensation program for certain Company executive officers that includes grants of performance-based restricted stock units (“PRSUs”) in addition to time-based restricted stock units (“RSU”). Under the terms of the PRSU Agreement, the number of PRSUs that may be earned depends on the extent to which performance goals for the award are achieved over a three-year performance period, as determined by the Compensation Committee of the Board. The number of PRSUs that may be earned ranges from 0% to 150% of the target award, with no PRSUs earned for below threshold-level performance, 50% of PRSUs earned for threshold-level performance, 100% of PRSUs earned for target-level performance, and 150% of PRSUs earned for maximum-level performance. As of March 31, 2024, PRSUs granted in 2024 and 2023 are being accrued at target and PRSUs granted in 2022 are being accrued below target. The different levels of accrual are commensurate with the projected performance of the respective grant. As of March 31, 2024, 533,298 shares were available for future issuance under the 2014 Omnibus Plan.

For the three months ended March 31, 2024 and 2023, the Company’s net income, as reported, included $1.0 million and $3.1 million, respectively, of stock-based compensation costs, including the benefit of phantom stock awards, and $0.3 million and $0.8 million of income tax benefit, respectively, related to the stock-based compensation plans.

During the three months ended March 31, 2024 and 2023 the Company granted 217,650 and 235,850 RSU awards and 67,350 and 79,050 PRSU awards, respectively.

The Company uses the fair value of the common stock on the date of award to measure compensation cost for restricted stock unit awards and performance restricted stock units. Compensation cost is recognized over the vesting period of the award using the straight-line method. Forfeitures are recorded in the period they occur.

The following table summarizes the Company’s RSU and PRSU awards under the 2014 Omnibus Plan for the three months ended March 31, 2024:

	RSU Awards			PRSU Awards
		Weighted-Average			Weighted-Average
		Grant-Date			Grant-Date
	Shares	Fair Value		Shares	Fair Value
Non-vested awards at December 31, 2023	280,161	$	21.14	77,570	$	20.08
Granted	217,650		16.92	67,350		16.81
Vested	(145,435)		19.86	(30,540)		18.46
Non-vested awards at March 31, 2024	352,376	$	19.06	114,380	$	18.59
Vested but unissued at March 31, 2024	190,814	$	20.18	63,645	$	21.70

As of March 31, 2024, there was $7.1 million of total unrecognized compensation cost related to RSU and PRSU awards granted. That cost is expected to be recognized over a weighted-average period of 2.7 years. The total fair value of awards vested for the three months ended March 31, 2024 and 2023, was $2.5 million and $5.0 million respectively.

Phantom Stock Plan: The Company maintains a non-qualified phantom stock plan as a supplement to its profit-sharing plan for officers who have achieved the designated level and completed one year of service. The Company adjusts its liability under this plan to the fair value of the shares at the end of each period.

The following table summarizes the Phantom Stock Plan at or for the three months ended March 31, 2024:

Phantom Stock Plan	Shares	Fair Value		Weighted-Average Fair Value
Outstanding at December 31, 2023	180,847	$	16.48
Granted	7,272			$	14.52
Distributions	(1,299)			$	16.24
Outstanding and vested at March 31, 2024	186,820	$	12.61

The Company recorded stock-based compensation expense (benefit) for the Phantom Stock Plan of ($0.7) million for both of the three months ended March 31, 2024 and 2023. The total fair value of the distributions from the Phantom Stock Plan was $21,000 and $15,000 for the three months ended March 31, 2024 and 2023, respectively.