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Stock-Based Compensation (Tables)
 12 Months Ended
Dec. 31, 2020
Schedule of Estimated Fair Value of TSR Performance-Based Restricted Stock Unit Awards Assumptions The fair value was estimated using the Monte Carlo simulation model with the following assumptions:
 
  
2020
 
 
2019
 
 
2018
 
Risk-free interest rate
  
 
1.5
% 
 
 
2.6
% 
 
 
2.2
% 
Teradyne volatility-historical
  
 
34.9
% 
 
 
31.9
% 
 
 
26.8
% 
NYSE Composite Index volatility-historical
  
 
11.4
% 
 
 
11.9
% 
 
 
12.4
% 
Dividend yield
  
 
0.6
% 
 
 
1.0
% 
 
 
0.8
% 
Fair Value of Stock Options Using Assumptions
The fair value of stock options was estimated using the Black-Scholes option-pricing model with the following assumptions:
 
 
  
2020
 
 
2019
 
 
2018
 
Expected life (years)
  
 
5.0
 
 
 
5.0
 
 
 
5.0
 
Risk-free interest rate
  
 
1.5
% 
 
 
2.5
% 
 
 
2.4
% 
Volatility-historical
  
 
32.0
% 
 
 
30.1
% 
 
 
26.4
% 
Dividend yield
  
 
0.5
% 
 
 
1.0
% 
 
 
0.8
% 
Stock Compensation Plan Activity
Stock compensation plan activity for the years 2020, 2019, and 2018, is as follows:
 
 
  
2020
 
 
2019
 
 
2018
 
 
  
(in thousands)
 
Restricted Stock Units:
  
      
 
      
 
      
Non-vested at January 1
  
 
2,269
 
 
 
2,454
 
 
 
3,174
 
Awarded
  
 
616
 
 
 
1,139
 
 
 
790
 
Vested
  
 
(1,028
) 
 
 
(1,237
) 
 
 
(1,382
) 
Forfeited
  
 
(68
) 
 
 
(87
) 
 
 
(128
) 
    
 
 
    
 
 
    
 
 
  
Non-vested at December 31
  
 
1,789
 
 
 
2,269
 
 
 
2,454
 
    
 
 
    
 
 
    
 
 
  
Stock Options:
  
      
 
      
 
      
Outstanding at January 1
  
 
319
 
 
 
506
 
 
 
531
 
Granted
  
 
56
 
 
 
102
 
 
 
69
 
Exercised
  
 
(159
) 
 
 
(280
) 
 
 
(94
) 
Forfeited
  
 
 —
 
 
 
(7
) 
 
 
 —
 
Expired
  
 
 —
 
 
 
(2
) 
 
 
 —
 
    
 
 
    
 
 
    
 
 
  
Outstanding at December 31
  
 
216
 
 
 
319
 
 
 
506
 
    
 
 
    
 
 
    
 
 
  
Vested and expected to vest at December 31
  
 
216
 
 
 
319
 
 
 
506
 
    
 
 
    
 
 
    
 
 
  
Exercisable at December 31
  
 
27
 
 
 
85
 
 
 
256
 
    
 
 
    
 
 
    
 
 
  
Share Based Compensation Total Shares Available
Total shares available for the years 2020, 2019, and 2018:
 
 
  
2020
 
 
2019
 
 
2018
 
 
  
(in thousands)
 
Shares available:
  
      
 
      
 
      
Available for grant at January 1
  
 
6,727
 
 
 
7,874
 
 
 
8,605
 
Options granted
  
 
(56
) 
 
 
(102
) 
 
 
(69
) 
Options forfeited
  
 
 —
 
 
 
 
7
 
 
      
Restricted stock units awarded
  
 
(616
) 
 
 
(1,139
) 
 
 
(790
) 
Restricted stock units forfeited
  
 
68
 
 
 
87
 
 
 
128
 
    
 
 
    
 
 
    
 
 
  
Available for grant at December 31
  
 
6,123
 
 
 
6,727
 
 
 
7,874
 
    
 
 
    
 
 
    
 
 
  
Weighted-Average Restricted Stock Unit Award Date Fair Value
Weighted average restricted stock unit award date fair value information for the years 2020, 2019, and 2018, is as follows:
 
 
  
2020
 
  
2019
 
  
2018
 
Non-vested at January 1
  
$
35.58
 
  
$
29.22
 
  
$
21.71
 
Awarded
  
 
72.76
 
  
 
39.08
 
  
 
45.99
 
Vested
  
 
31.53
 
  
 
23.59
 
  
 
20.20
 
Forfeited
  
 
45.36
 
  
 
35.60
 
  
 
24.67
 
Non-vested at December 31
  
$
47.84
 
  
$
35.58
 
  
$
29.22
 
Restricted Stock Unit Awards Aggregate Intrinsic Value
Restricted stock unit awards aggregate intrinsic value information at December 31 for the years 2020, 2019, and 2018 is as follows:
 
 
  
2020
 
  
2019
 
  
2018
 
 
  
(in thousands)
 
Vested
  
$
71,582
 
  
$
46,110
 
  
$
63,688
 
Outstanding
  
 
214,509
 
  
 
154,752
 
  
 
77,015
 
Expected to vest
  
 
210,301
 
  
 
152,374
 
  
 
77,187
 
Restricted Stock Units Weighted Average Remaining Contractual Terms
Restricted stock units weighted average remaining contractual terms (in years) information at December 31 for the years 2020, 2019, and 2018 is as follows:
 
 
  
2020
 
  
2019
 
  
2018
 
Outstanding
  
 
0.96
 
  
 
1.02
 
  
 
0.92
 
Expected to vest
  
 
0.96
 
  
 
1.02
 
  
 
0.91
 
Weighted Average Stock Options Exercise Price
Weighted average stock options exercise price information for the year ended December 31, 2020 is as follows:
 
 
  
2020
 
Outstanding at January 1
  
$
29.91
 
Options granted
  
 
72.61
 
Options exercised
  
 
23.77
 
Options forfeited
  
 
—
 
Options cancelled
  
 
—
 
Outstanding at December 31
  
 
45.59
 
Exercisable at December 31
  
 
23.51
 
Stock Option Aggregate Intrinsic Value Information Stock option aggregate intrinsic value information for the years ended December 31, 2020, 2019, and 2018 is as follows:
 
  
2020
 
  
2019
 
  
2018
 
 
  
(in thousands)
 
Exercised
  
$
9,682
 
  
$
9,232
 
  
$
2,960
 
Outstanding
  
 
16,083
 
  
 
12,218
 
  
 
7,359
 
Vested and expected to vest
  
 
13,499
 
  
 
7,701
 
  
 
7,359
 
Exercisable
  
 
2,584
 
  
 
4,517
 
  
 
5,905
 
Stock Options Weighted Average Remaining Contractual Terms
Stock options weighted average remaining contractual terms (in years) information at December 31, for the years 2020, 2019, and 2018 is as follows:
 
 
  
2020
 
  
2019
 
  
2018
 
Outstanding
  
 
4.6
 
  
 
4.2
 
  
 
3.6
 
Vested and expected to vest
  
 
4.9
 
  
 
5.0
 
  
 
3.6
 
Exercisable
  
 
2.5
 
  
 
2.1
 
  
 
2.4
 
Effect to Income (Loss) from Operations for Recording Stock-Based Compensation
The following table provides the effect to income from operations for recording stock-based compensation for the years ended December 31, 2020, 2019, and 2018:
 
 
  
2020
 
 
2019
 
 
2018
 
 
  
(in thousands)
 
Cost of revenues
  
$
4,227
 
 
$
3,480
 
 
$
3,129
 
Engineering and development
  
 
12,039
 
 
 
9,913
 
 
 
9,181
 
Selling and administrative
  
 
28,640
 
 
 
24,504
 
 
 
21,267
 
    
 
 
    
 
 
    
 
 
  
Stock-based compensation
  
 
44,906
 
 
 
37,897
 
 
 
33,577
 
Income tax benefit
  
 
(13,060
) 
 
 
(8,360
) 
 
 
(12,036
) 
    
 
 
    
 
 
    
 
 
  
Total stock-based compensation expense after income taxes
  
$
31,846
 
 
$
29,537
 
 
$
21,541