Under various share-based compensation plans and under terms established or modified by our Board or a committee thereof, we grant equity awards to trustees, officers, and key employees, including non-qualified options to purchase the Company’s common shares, RSUs, deferred share units (“DSUs”), and unrestricted common shares issued in lieu of trustee compensation.

On April 26, 2021, the Company’s Shareholders approved the 2021 Equity and Performance-Based Incentive Compensation Plan (“2021 Plan”), which authorized an additional three million shares available for future issuance of equity-based awards. As of December 31, 2022, there were a total of 1,724,352 shares reserved for granting of future options and stock awards under the 2021 Plan.

We recorded share-based compensation expense associated with our equity awards in the various expense categories in the Consolidated Statements of Income as set forth in the following table. In addition, $4.1 million and $3.9 million share-based compensation cost was capitalized as real estate facilities for the year ended December 31, 2022 and 2021, respectively (none in 2020).



	For Years Ended December 31,
	2022		2021		2020

	(Amounts in thousands)

Self-storage cost of operations	$	17,950	$	20,544	$	14,904
Ancillary cost of operations	888		1,561		—
General and administrative	37,865		37,760		18,586
Total	$	56,703	$	59,865	$	33,490

We have service-based and performance-based stock options outstanding. Performance-based stock options outstanding vest upon meeting certain performance conditions or market conditions. Stock options generally vest over 3 to 5 years, expire 10 years after the grant date, and have an exercise price equal to the closing trading price of our common shares on the grant date. New shares are issued for options exercised. Employees cannot require the Company to settle their award in cash.

During 2022, we granted 65,000 stock options in connection with non-management trustee compensation. We also granted 77,683 stock options, of which vesting is dependent upon meeting certain market conditions over the three-year period from January 1, 2022 through December 31, 2024, with continued service-based vesting through the first quarter of 2027. These stock options require relative achievement of the Company’s total shareholder return as compared to the weighted average total shareholder return of specified peer groups and can result in grantees earning up to 200% of the target options originally granted.

During 2021, 245,000 stock options were awarded where vesting is dependent upon meeting certain performance targets over the three-year period from January 1, 2021 through December 31, 2023, which are considered performance conditions, with continued service-based vesting through the first quarter of 2026. These awards contain a relative Total Shareholder Return modifier that will adjust the payout based on relative performance as compared to the market. As of December 31, 2022, these performance targets were expected to be met at 125% achievement, an increase from 100% as of December 31, 2021.

During 2020, 770,000 stock options were awarded where vesting is dependent upon meeting certain performance targets over the three-year period from January 1, 2020 through December 31, 2022, which are considered performance conditions, with continued service-based vesting through the first quarter of 2025. These performance targets were met at 125% achievement at December 31, 2022.

The stock options outstanding at December 31, 2022 have an aggregate intrinsic value (the excess, if any, of each option’s market value over the exercise price) of approximately $209.8 million and remaining average contractual lives of approximately five years. Total compensation cost related to nonvested stock options that has not yet been recognized is $21.2 million and is expected to be recognized as compensation cost over approximately three years on average. Exercisable stock options have an aggregate intrinsic value of approximately $128.9 million at December 31, 2022 and remaining average contractual lives of approximately three years.


	Service-Based			Performance-Based			Total
	Number of Options	Weighted Average Exercise Price per Share		Number of Options	Weighted Average Exercise Price per Share		Number of Options	Weighted Average Exercise Price per Share
Options outstanding January 1, 2020	2,339,667	$	204.53	—	$	—	2,339,667	$	204.53
Granted	70,000	200.61		770,000	228.94		840,000	226.58
Exercised	(71,500)	(175.16)		—	—		(71,500)	(175.16)
Cancelled	(107,000)	(220.33)		(40,000)	(228.94)		(147,000)	(222.67)
Options outstanding December 31, 2020	2,231,167	$	204.60	730,000	$	228.94	2,961,167	$	210.59
Granted (a)	140,000	248.54		420,000	229.53		560,000	234.29
Exercised	(471,216)	(203.30)		—	—		(471,216)	(203.30)
Cancelled	—	—		(10,000)	(228.94)		(10,000)	(228.94)
Options outstanding December 31, 2021	1,899,951	$	208.16	1,140,000	$	229.16	3,039,951	$	216.04
Granted (b)	65,000	398.97		138,933	299.88		203,933	331.46
Special dividend adjustment (c)	62,512	N/A		41,836	N/A		104,348	N/A
Exercised	(173,422)	(189.95)		(10,327)	(221.68)		(183,749)	(191.74)
Cancelled	—	—		—	—		—	—
Options outstanding December 31, 2022 (d)	1,854,041	$	209.53	1,310,442	$	229.39	3,164,483	$	217.75
Options exercisable at December 31, 2022 (d)	1,617,555	$	200.87	10,327	$	221.68	1,627,882	$	201.00


	2022		2021		2020
Aggregate exercise date intrinsic value of options exercised during the year (in 000's)	$	27,210	$	44,613	$	3,433

Average assumptions used in valuing options with the Black-Scholes method:
Expected life of options in years	6		5		5
Risk-free interest rate	2.9%		0.8%		0.4%
Expected volatility, based upon historical volatility	22.9%		24.1%		21.6%
Expected dividend yield	2.0%		2.9%		3.8%

Average assumptions used in valuing options with market conditions with the Monte-Carlo simulation method:
Expected life of options in years	7		5
Risk-free interest rate	1.8%		0.9%
Expected volatility, based upon historical volatility	22.6%		26.5%
Expected dividend yield	2.3%		2.9%

Average estimated value of options granted during the year	$	87.57	$	62.66	$	17.79

(c) On August 4, 2022, we paid a Special Dividend of $13.15 per common share to shareholders of record as of August 1, 2022. Stock options that were outstanding at the time of the Special Dividend were adjusted pursuant to the anti-dilution provisions of the Company’s applicable equity and performance-based incentive compensation plans that provide for equitable adjustments in the event of an extraordinary cash dividend. The anti-dilution adjustments

proportionately increased the number of outstanding stock options and reduced the exercise prices of outstanding stock options by a conversion rate of 1.03275, resulting in an increase of 104,348 stock options outstanding. The adjustments did not result in incremental share-based compensation expense.

We have service-based and performance-based RSUs outstanding, which generally vest over 5 to 8 years from the grant date. Performance-based RSUs outstanding vest upon meeting certain performance conditions or market conditions. The grantee receives dividends for each outstanding RSU equal to the per-share dividends received by our common shareholders. We expense any dividends previously paid upon forfeiture of the related RSU. Upon vesting, the grantee receives new common shares equal to the number of vested RSUs, less common shares withheld to satisfy the grantee’s statutory tax liabilities arising from the vesting.

During 2022, 21,985 RSUs were awarded where vesting is dependent upon meeting certain market conditions over a three-year period from January 1, 2022 through December 31, 2024, with continued service-based vesting through the first quarter of 2027. The amount of these RSUs that are earned and vested, if any, will be based, in addition to continued employment requirements, on the Company's relative total shareholder return over the three-year period as compared to the weighted average total shareholder return of the specified peer groups and can result in grantees earning up to 200% of the target RSUs originally granted.

During 2021, 37,000 RSUs were awarded where vesting is dependent upon meeting certain performance targets for 2021, which are considered performance conditions, with continued service-based vesting through the first quarter of 2026. As of December 31, 2021, these targets were met at 125% achievement.

Remaining compensation cost related to RSUs outstanding at December 31, 2022 totals approximately $74.3 million and is expected to be recognized over the next two years on average. The following tables set forth relevant information with respect to restricted shares (dollar amounts in thousands):


	Service-Based			Performance-Based			Total
	Number of Restricted Share Units	Weighted-Average Grant-Date Fair Value		Number of Restricted Share Units	Weighted-Average Grant-Date Fair Value		Number of Restricted Share Units	Weighted-Average Grant-Date Fair Value
Restricted share units outstanding January 1, 2020	619,150	$	213.29	—	$	—	619,150	$	213.29
Granted	110,755	222.27		—	—		110,755	222.27
Vested	(140,089)	(200.88)		—	—		(140,089)	(200.88)
Forfeited	(37,028)	(215.08)		—	—		(37,028)	(215.08)
Restricted share units outstanding December 31, 2020	552,788	$	218.11	—	$	—	552,788	$	218.11
Granted (a)	143,068	336.06		46,250	275.12		189,318	321.17
Vested	(138,420)	(216.63)		—	—		(138,420)	(216.63)
Forfeited	(32,864)	(221.32)		—	—		(32,864)	(221.32)
Restricted share units outstanding December 31, 2021	524,572	$	249.90	46,250	$	275.12	570,822	$	251.95
Granted	51,575	293.43		21,985	465.11		73,560	344.74
Vested	(146,138)	(240.71)		—	—		(146,138)	(240.71)
Forfeited	(22,197)	(256.50)		—	—		(22,197)	(256.50)
Restricted share units outstanding December 31, 2022	407,812	$	258.34	68,235	$	336.33	476,047	$	269.52


	2022		2021		2020
Amounts for the year (in 000's, except number of shares):
Fair value of vested shares on vesting date	$	47,244	$	37,430	$	31,076
Cash paid for taxes upon vesting in lieu of issuing common shares	$	16,827	$	13,069	$	10,518
Common shares issued upon vesting	99,009		81,325		91,627

Average assumptions used in valuing restricted share units with market conditions with the Monte-Carlo simulation method:
Time from the valuation date to the end of the performance period	3
Risk-free interest rate	1.6%
Expected volatility, based upon historical volatility	26.5%
Expected dividend yield	2.3%

Average estimated value of restricted share units granted during the year	$	465.11