Stock compensation plans

12 Months Ended

Dec. 31, 2021

Share-based Payment Arrangement, Noncash Expense [Abstract]

In May of 2014, our stockholders approved the Teleflex Incorporated 2014 Stock Incentive Plan (the "Plan"). The 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 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 Plan. Options granted under the Plan have an exercise price equal to the closing price of the common stock on the date of the grant. In 2021, we granted, under the Plan, non-qualified options to purchase 108,686 shares of common stock and granted restricted stock units relating to 59,210 shares of common stock under the 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 the achievement of our 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 16,903 shares of common stock would be issuable in respect of the PSUs granted and a maximum of 42,272 shares would be issuable in respect of such PSUs upon achievement of maximum performance levels.

The following table summarizes the share-based compensation activity:


	2021		2020		2019

Share-based compensation expense	$	22,937	$	20,739	$	26,940
Total income tax benefit recognized for share-based compensation arrangements	10,912		21,958		21,121
Net excess tax benefit	6,355		17,549		15,380

The unrecognized compensation expense for all awards granted in 2021 as of the grant date was $37.8 million, which will be recognized over the vesting period of the awards. As of December 31, 2021, 3,082,554 shares were available for future grants under the Plan.

Option Awards

The fair value of options granted in 2021, 2020 and 2019 was estimated at the date of grant using a Black-Scholes option pricing model. The following weighted-average assumptions were used:


	2021		2020		2019
Risk-free interest rate	0.67	%	1.16	%	2.44	%
Expected life of option	5.01 years		5.00 years		4.99 years
Expected dividend yield	0.34	%	0.39	%	0.47	%
Expected volatility	30.03	%	23.98	%	23.92	%

The following table summarizes the option activity during 2021:


	Shares Subject to Options	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life In Years	Aggregate Intrinsic Value

Outstanding, beginning of the year	1,157,315	$	195.57
Granted	108,686	403.99
Exercised	(125,143)	175.90
Forfeited or expired	(32,859)	334.14
Outstanding, end of the year	1,107,999	214.13		5.11	$	136,520
Exercisable, end of the year	908,854	$	181.31	4.37	$	135,036

The weighted average grant date fair value for options granted during 2021, 2020 and 2019 was $103.87, $74.60 and $68.22, respectively. The total intrinsic value of options exercised during 2021, 2020 and 2019 was $27.4 million, $77.9 million and $64.3 million, respectively.

We recorded $8.8 million of expense related to options during 2021, which is included in cost of goods sold or selling, general and administrative expenses. As of December 31, 2021, the unamortized share-based compensation cost related to non-vested stock options, net of expected forfeitures, was $9.4 million, which is expected to be recognized over a weighted-average period of 1.47 years. Authorized but unissued shares of our common stock are issued upon exercises of options.

Stock Awards

The fair value of PSUs granted were determined using a Monte Carlo simulation valuation model. The grant date fair value for the 2021 awards was $419.25.

The fair value for restricted stock units granted in 2021, 2020 and 2019 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:


	2021		2020		2019
Risk-free interest rate	0.28	%	1.07	%	2.41	%
Expected dividend yield	0.34	%	0.38	%	0.46	%

The following table summarizes the non-vested restricted stock unit activity during 2021:


	Number of Non-Vested Shares	Weighted Average Grant-Date Fair Value		Weighted Average Remaining Contractual Life	Aggregate Intrinsic Value

Outstanding, beginning of the year	150,812	$	293.10
Granted	59,210	398.59
Vested	(50,098)	260.32
Forfeited	(24,546)	334.38
Outstanding, end of the year	135,378	$	343.89	1.2	$	44,469

We issued 59,210, 52,464 and 69,799 of non-vested restricted stock units in 2021, 2020 and 2019, 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 2021, 2020 and 2019 was $398.59, $344.70 and $286.51, respectively.

We recorded $13.5 million of expense related to stock awards during 2021, which is included in cost of goods sold or selling, general and administrative expenses. As of December 31, 2021, the unamortized share-based compensation cost related to non-vested restricted stock units, net of estimated forfeitures, was $17.7 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.