Share-based payments

12 Months Ended

Dec. 31, 2020

Share-based Payment Arrangement [Abstract]

Share-based payments. Prior to 2020, the Company granted time-based and performance-based restricted stock units to executives and senior management employees. Each restricted stock unit represents a contractual right to receive a share of the Company's common stock. The time-based units vest on each of the first three anniversaries of the grant date, while the performance-based units vest upon achievement of certain financial objectives over a period of approximately three years. During 2020, the Company granted time-based restricted stock units, and nonqualified stock options in lieu of performance-based restricted stock units. The stock options vest and may be exercised at a strike price of $39.76 on each of the first three anniversaries of the grant date at a rate of 20%, 30% and 50%, chronologically, and expire 10 years after the grant date.

Awards are made pursuant to the Company’s employee incentive compensation plans and the compensation expense associated with the awards is recognized over the corresponding vesting period as part of employee costs in the consolidated statements of income and comprehensive income. Award forfeitures are recorded as credits against employee costs in the period in which they occur. The aggregate grant-date fair values of restricted share and unit awards to employees during 2020, 2019 and 2018 were $4.1 million (104,200 shares with an average grant price of $39.78), $5.1 million (122,400 shares with an average grant price of $42.02) and $4.8 million (110,600 shares with an average grant price of $43.39), respectively. The aggregate grant-date fair value of stock option awards during 2020 was $3.4 million, comprised of 647,800 options with an average grant price of $5.32.

Additionally, in 2020, 2019 and 2018, the Company granted its board of directors, as a component of their annual director retainer compensation, approximately 18,700, 13,700 and 14,300 shares, respectively, of restricted common stock that had aggregate fair values of $0.6 million each year. The associated expense for these grants is recognized in other operating expenses in the consolidated statements of income and comprehensive income.

A summary of the restricted common stock award activity during the year ended December 31, 2020 is presented below:


	Shares	Weighted-Average Grant-Date Fair Value per Share ($)

Outstanding at January 1, 2020	53,389	40.60
Granted	18,673	32.83
Vested	(52,738)	40.55
Forfeited	(651)	44.13
Outstanding at December 31, 2020	18,673	32.83

A summary of the restricted common stock unit activity during the year ended December 31, 2020 is presented below:


	Units	Weighted-Average Grant-Date Fair Value per Share ($)

Outstanding at January 1, 2020	196,017	42.21
Granted	104,202	39.78

Converted	(32,242)	41.19
Forfeited	(37,049)	42.31
Outstanding at December 31, 2020	230,928	41.25
Nonvested at December 31, 2020	177,855	40.61

A summary of the stock option activity during the year ended December 31, 2020 is presented below:


	Units	Weighted-Average Exercise Price ($)

Outstanding at January 1, 2020	—	—
Granted	647,832	39.76


Forfeited	(14,552)	39.76
Outstanding and nonvested at December 31, 2020	633,280	39.76

As of December 31, 2020, the aggregate intrinsic value and weighted average remaining contractual term related to outstanding options was $5.4 million and 9.1 years, respectively.

The fair value of grants that vested in 2020 and 2019 aggregated to $5.6 million and $2.1 million, respectively. For the years ended December 31, 2020, 2019 and 2018, compensation costs recognized in the consolidated statements of income and comprehensive income, presented primarily within employee costs, were approximately $5.8 million, $2.1 million and $4.8 million, respectively. The total tax benefits recognized in the consolidated statements of income and comprehensive income from tax deductions relating to vesting of equity awards in 2020, 2019 and 2018 were $0.6 million, $0.5 million and $1.1 million, respectively. As of December 31, 2020, compensation costs not yet recognized related to all nonvested awards was $5.3 million, which is expected to be recognized over a weighted average period of two years.