Stock compensation plans

12 Months Ended

Dec. 31, 2019

Share-based Payment Arrangement, Noncash Expense [Abstract]

In May 2014, our stockholders approved the Teleflex Incorporated 2014 Stock Incentive Plan (the "2014 Plan") which replaced the 2008 Stock Incentive Plan and 2000 Stock Compensation Plan (the "Prior Plans"), under which stock options and restricted stock awards previously were granted. The 2014 Plan provides for several different kinds of awards, including stock options, stock appreciation rights, stock awards and other stock-based awards to directors, officers and key employees. Under the 2014 Plan, we are authorized to issue up to 5.3 million shares of common stock, subject to adjustment in accordance with special share counting rules in the 2014 Plan that, among other things, (i) count shares underlying a stock option or stock appreciation right (each, an "option award") as one share and each share underlying any other type of award (a "stock award") as 1.8 shares, (ii) increase the shares we are authorized to issue by one or 1.8 shares for each share underlying an option award or stock award, respectively, under the Prior Plans that have been canceled, expired, settled in cash or forfeited after December 31, 2013 and (iii) decrease the number of shares we are authorized to issue by one share and 1.8 shares for each share underlying an option award or stock award, respectively, granted under the Prior Plans between January 1, 2014 and the May 2, 2014 adoption of the 2014 Plan by our stockholders. Options granted under the 2014 Plan have an exercise price equal to the closing price of the common stock on the date of the grant. In 2019, we granted, under the 2014 Plan, non-qualified options to purchase 162,087 shares of common stock and granted restricted stock units relating to 69,799 shares of common stock under the 2014 Plan. We also granted performance share units (“PSUs”), as described in the following paragraph.

In 2018, we began granting PSUs to specified senior managers. The PSUs are designed to provide further incentive to our senior management with respect to achievement of the long term financial objectives. The PSU component of the equity incentive program is designed to provide shares of our common stock to the holder based upon our achievement of certain financial performance criteria during a designated performance period of three years. The number of shares to be awarded under the PSUs granted are subject to modification based upon our total stockholder return relative to a designated group of public companies. Assuming target performance is achieved, a total of 18,663 shares of common stock would be issuable in respect of the PSUs granted and a maximum of 46,660 shares would be issuable in respect of such PSUs upon achievement of maximum performance levels.

The following table summarizes the share-based compensation activity:


	2019		2018		2017
	(Dollars in millions)
Share-based compensation expense	$	26.9	$	22.4	$	19.4
Total income tax benefit recognized for share-based compensation arrangements	$	21.1	$	20.7	$	12.8
Net excess tax benefit	$	15.4	$	15.9	$	6.6

The unrecognized compensation expense for all awards granted in 2019 as of the grant date was $34.0 million, which will be recognized over the vesting period of the awards. As of December 31, 2019, 3,357,048 shares were available for future grants under the 2014 Plan.

Option Awards

The fair value of options granted in 2019, 2018 and 2017 was estimated at the date of grant using a Black-Scholes option pricing model. The following weighted-average assumptions were used:


	2019		2018		2017
Risk-free interest rate	2.44	%	2.67	%	1.88	%
Expected life of option	4.99 years		4.98 years		4.94 years
Expected dividend yield	0.47	%	0.54	%	0.71	%
Expected volatility	23.92	%	22.65	%	21.74	%

The following table summarizes the option activity during 2019:


	Shares Subject to Options	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life In Years	Aggregate Intrinsic Value
					(Dollars in thousands)
Outstanding, beginning of the year	1,471,449	$	136.62
Granted	162,087	288.45
Exercised	(291,696)	99.96
Forfeited or expired	(16,308)	245.65
Outstanding, end of the year	1,325,532	161.91		6.0	284,371
Exercisable, end of the year	1,018,703	$	133.71	5.3	247,275

The weighted average grant date fair value for options granted during 2019, 2018 and 2017 was $68.22, $58.16 and $39.70, respectively. The total intrinsic value of options exercised during 2019, 2018 and 2017 was $64.3 million, $69.4 million and $15.7 million, respectively.

We recorded $9.6 million of expense related to options during 2019, which is included in cost of goods sold or selling, general and administrative expenses. As of December 31, 2019, the unamortized share-based compensation cost related to non-vested stock options, net of expected forfeitures, was $10.6 million, which is expected to be recognized over a weighted-average period of 1.4 years. Authorized but unissued shares of our common stock are issued upon exercises of options.

Stock Awards

The fair value of PSUs granted in 2019 was determined using a Monte Carlo simulation valuation model. The grant date fair value for these awards was $305.58.

The fair value for restricted stock units granted in 2019, 2018 and 2017 was estimated at the date of grant based on the market price for the underlying stock on the grant date discounted for the risk free interest rate and the present value of expected dividends over the vesting period. The following weighted-average assumptions were used:


	2019		2018		2017
Risk-free interest rate	2.41	%	2.41	%	1.47	%
Expected dividend yield	0.46	%	0.53	%	0.71	%

The following table summarizes the non-vested restricted stock unit activity during 2019:


	Number of Non-Vested Shares	Weighted Average Grant-Date Fair Value		Weighted Average Remaining Contractual Life	Aggregate Intrinsic Value
				(In years)	(Dollars in thousands)
Outstanding, beginning of the year	201,812	$	188.10
Granted	69,799	286.51
Vested	(80,835)	150.83
Forfeited	(13,428)	236.31
Outstanding, end of the year	177,348	$	240.17	1.2	$	66,761

We issued 69,799, 62,221 and 82,865 of non-vested restricted stock units in 2019, 2018 and 2017, respectively, the majority of which provide for vesting as to all underlying shares on the third anniversary of the grant date. The weighted average grant-date fair value for non-vested restricted stock units granted during 2019, 2018 and 2017 was $286.51, $250.66 and $187.85, respectively.

We recorded $14.1 million of expense related to stock awards during 2019, which is included in cost of goods sold or selling, general and administrative expenses. As of December 31, 2019, the unamortized share-based compensation cost related to non-vested restricted stock units, net of estimated forfeitures, was $18.6 million, which is expected to be recognized over a weighted-average period of 1.2 years. We use treasury stock to provide shares of common stock in connection with vesting of the stock awards.