Stock-Based Payments

12 Months Ended

Dec. 31, 2021

Share-based Payment Arrangement, Noncash Expense [Abstract]

STOCK-BASED PAYMENTSCME Group adopted an Omnibus Stock Plan under which stock-based awards may be made to employees. A total of 40.2 million Class A shares have been reserved for awards under the plan. Awards totaling 25.1 million shares have been granted and are outstanding or have been exercised under the plan as of December 31, 2021. Awards granted generally vest over a four-year period, with 25% vesting one year after the grant date and on that same date in each of the following three years.

Total compensation expense for stock-based payments and total income tax benefit recognized on the consolidated statements of income for stock-based awards at December 31, 2021, 2020 and 2019 were as follows:


(in millions)	2021		2020		2019
Compensation expense	$	76.4	$	96.9	$	85.8
Income tax benefit recognized	20.6		23.6		27.3

At December 31, 2021, there was $135.0 million of total unrecognized compensation expense related to employee stock-based compensation arrangements that had not yet vested. The total unrecognized expense is expected to be recognized over a weighted average period of 2.2 years.

Stock options have not been granted since 2012. The following table summarizes stock option activity for 2021. Aggregate intrinsic value is in millions.


	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in years)	Aggregate Intrinsic Value
Outstanding at December 31, 2020	102,823	$	54	0.7	$	13.1

Exercised	(101,363)	54
Cancelled	(440)	54
Outstanding at December 31, 2021	1,020	56		0.5	0.2
Exercisable at December 31, 2021	1,020	56		0.5	0.2

The total intrinsic value of options exercised during 2021, 2020 and 2019 was $15.0 million, $16.7 million and $23.1 million, respectively.

In 2021, the company granted 349,279 shares of restricted Class A common stock and 11,384 shares of restricted stock units. Restricted common stock and restricted stock units generally have a vesting period of two to four years. The fair value related to these grants was $68.4 million, which is recognized as compensation expense on an accelerated basis over the vesting period. Dividends are accrued on restricted Class A common stock and restricted stock units and are paid once the restricted stock vests. In 2021, the company also granted 138,969 performance shares. The fair value related to these grants was $32.6 million, which is recognized as compensation expense on a straight-lined basis over the vesting period. The vesting of these shares is contingent on meeting stated performance or market conditions, generally measured over a three-year period.

The following table summarizes restricted stock, restricted stock units and performance shares activity for 2021:


	Number of Shares	Weighted Average Grant Date Fair Value
Outstanding at December 31, 2020	1,264,287	$	190
Granted	499,632	202
Vested	(335,411)	167
Cancelled	(313,453)	180
Outstanding at December 31, 2021	1,115,055	205

The total fair value of restricted stock, restricted stock units and performance shares that vested during 2021, 2020 and 2019 was $65.7 million, $79.4 million and $77.7 million, respectively.

Under the ESPP, eligible employees may acquire shares of Class A common stock using after-tax payroll deductions made during consecutive offering periods of approximately six months in duration. Shares are purchased at the end of each offering period at a price of 90% of the closing price of the Class A common stock as reported on the Nasdaq Global Select Market. Compensation expense is recognized on the dates of purchase for the discount from the closing price. In 2021, 2020 and 2019, a total of 37,861, 44,029 and 26,134 shares, respectively, of Class A common stock were issued to participating employees. These shares are subject to a six-month holding period. Annual expense of $0.8 million for the purchase discount was recognized in 2021, $0.8 million was recognized in 2020 and $0.5 million was recognized in 2019.

In 2021, non-executive directors received an annual award of Class A common stock with a value equal to $120,000. Non-executive directors could also elect to receive some or all of the cash portion of their annual stipend, up to $80,000, in shares of stock based on the closing price at the date of distribution. In 2022, non-execute directors will receive an annual award of Class A common stock with a value equal to $145,000 and a cash stipend of $95,000. As a result, 13,769 shares, 17,322 shares and

16,328 shares of Class A common stock were issued to non-executive directors during 2021, 2020 and 2019, respectively. These shares are not subject to any vesting restrictions. Expense of $2.9 million, $3.1 million and $3.0 million related to these stock-based payments was recognized for the years ended December 31, 2021, 2020 and 2019, respectively.