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Share-Based Compensation Plans | 12 Months Ended
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Dec. 31, 2023
Share-Based Payment Arrangement [Abstract] |
Share-Based Compensation Plans | Share-Based Compensation Plans The following table summarizes the Company's share-based compensation expense.
| Years Ended December 31,
| 2023 |  | 2022 |  | 2021
| (Thousands)
Incentive Performance Share Unit Programs | $ | 23,915 |  |  | $ | 23,443 |  |  | $ | 15,386 |
Restricted stock awards | 20,119 |  |  | 23,028 |  |  | 19,217 |
Non-qualified stock options | 28 |  |  | 221 |  |  | 550 |
Stock appreciation rights | 4,056 |  |  | 17,406 |  |  | 9,183 |
Other programs, including non-employee director awards | 3,082 |  |  | 3,313 |  |  | 3,171 |
Total share-based compensation expense (a) | $ | 51,200 |  |  | $ | 67,411 |  |  | $ | 47,507 |
(a)For the years ended December 31, 2023 and 2021, share-based compensation expense of $3.6 million and $4.7 million, respectively, was included in other operating expenses. There were no such costs in 2022. The Company typically elects to fund awards paid in stock through stock acquired by the Company in the open market or from any other person, issued directly by the Company or any combination of the foregoing. Prior to 2023, the Company typically used treasury stock to fund awards paid in stock. Cash received from exercises under all share-based payment arrangements for employees and directors for the year ended December 31, 2022 was $15.9 million. There was no cash received from exercises under all share-based payment arrangements for employees and directors for the years ended December 31, 2023 and 2021. During the years ended December 31, 2023, 2022 and 2021, share-based payment arrangements paid in stock generated tax benefits of $16.5 million, $4.1 million and $1.3 million, respectively. Cash paid for taxes related to net settlement of share-based incentive awards for the years ended December 31, 2023, 2022 and 2021 were $41.8 million, $24.8 million and $3.8 million, respectively. Incentive Performance Share Unit Programs – Equity & Liability The Management Development and Compensation Committee of the Company's Board of Directors (the Compensation Committee) has adopted the following programs under each respective Long-Term Incentive Plan (LTIP): •2019 Incentive Performance Share Unit Program (2019 Incentive PSU Program) under the 2014 LTIP; •2020 Incentive Performance Share Unit Program (2020 Incentive PSU Program) under the 2019 LTIP; •2021 Incentive Performance Share Unit Program (2021 Incentive PSU Program) under the 2020 LTIP; •2022 Incentive Performance Share Unit Program (2022 Incentive PSU Program) under the 2020 LTIP; and •2023 Incentive Performance Share Unit Program (2023 Incentive PSU Program) under the 2020 LTIP. The programs noted above are collectively referred to as the Incentive PSU Programs. The 2020 Incentive PSU Program, 2021 Incentive PSU Program, 2022 Incentive PSU Program and 2023 Incentive PSU Program granted equity awards. The 2019 Incentive PSU Program granted both equity and liability awards. The Incentive PSU Programs were established to provide long-term incentive opportunities to executives and key employees to further align their interests with those of the Company's shareholders and with the strategic objectives of the Company. The performance period for each of the awards under the Incentive PSU Programs is 36 months, with vesting occurring upon payment following the expiration of the performance period. Executive performance incentive program awards granted in year 2019 were earned based on: •the level of total shareholder return relative to a predefined peer group; •the level of operating and development cost improvement; and •return on capital employed. Executive performance incentive program awards granted in year 2020 are earned based on: •adjusted well costs; •adjusted free cash flow; and •the level of total shareholder return relative to a predefined peer group. Executive performance incentive program awards granted in year 2021 are earned based on: •the level of absolute total shareholder return and total shareholder return relative to a predefined peer group. Executive performance incentive program awards granted in year 2022 are earned based on: •the level of absolute total shareholder return and total shareholder return relative to a predefined peer group; and •the Company's performance in achieving its 2025 net zero Scopes 1 and 2 emissions target. Executive performance incentive program awards granted in year 2023 are earned based on: •the level of absolute total shareholder return and total shareholder return relative to a predefined peer group. The payout factor for the 2019 Incentive PSU Program varied between zero and 300% of the number of outstanding units contingent upon the performance metrics listed above. The 2020 Incentive PSU Program has a payout factor that ranges from zero to 150%, the 2021 Incentive PSU Program and 2023 Incentive PSU Program have a payout factor that ranges from zero to 200% and the 2022 Incentive PSU Program has a payout factor that ranges from zero to 220% (which includes the Company's performance in achieving its 2025 net zero Scopes 1 and 2 emissions target). The Company recorded the 2020 Incentive PSU Program, the 2021 Incentive PSU Program, the 2022 Incentive PSU Program, the 2023 Incentive PSU Program and the portion of the 2019 Incentive PSU Program to be settled in stock as equity awards using a grant date fair value determined through a Monte Carlo simulation, which projected the share price for the Company and its peers at the end point of the performance period. The 2019 Incentive PSU Program also included awards to be settled in cash, which are recorded at fair value as of the measurement date determined through a Monte Carlo simulation, which projected the share price for the Company and its peers at the end point of the performance period. The expected share prices were generated using each company's annual volatility for the expected term and the commensurate three-year risk-free rate shown in the chart below. As the Incentive PSU Programs include a performance condition that affects the number of shares that will ultimately vest, the Monte Carlo simulation computed either the grant date fair value for equity awards or the measurement date fair value for liability awards for each possible performance condition outcome on the grant date for equity awards or the measurement date for liability awards. The Company reevaluates the then-probable outcome at the end of each reporting period to record expense at the probable outcome grant date fair value or measurement date fair value, as applicable. Vesting of the units under each Incentive PSU Program occurs upon payment after the end of the performance period. The following table summarizes Incentive PSU Programs to be settled in stock and classified as equity awards.
Incentive PSU Programs – Equity Settled |  | Nonvested Shares (a) |  | Weighted Average Fair Value |  | Aggregate Fair Value
Outstanding at December 31, 2020 |  | 1,939,728 |  |  | $ | 15.92 |  |  | $ | 30,878,465 |
Granted in Period |  | 922,260 |  |  | 23.44 |  |  | 21,617,774 |
Granted from Multiplier |  | 61,076 |  |  | 76.53 |  |  | 4,674,146 |
Vested |  | (168,416) |  |  | 76.53 |  |  | (12,888,876) |
Outstanding at December 31, 2021 |  | 2,754,648 |  |  | 16.08 |  |  | 44,281,509 |
Granted in Period |  | 575,120 |  |  | 29.73 |  | (b) | 17,098,318 |
Granted from Multiplier |  | 162,183 |  |  | 29.45 |  |  | 4,776,289 |
Vested |  | (625,563) |  |  | 29.45 |  |  | (18,422,830) |
Forfeited |  | (4,398) |  |  | 13.28 |  |  | (58,405) |
Outstanding at December 31, 2022 |  | 2,861,990 |  |  | 16.66 |  |  | 47,674,881 |
Granted in Period |  | 404,790 |  |  | 38.79 |  |  | 15,701,804 |
Granted from Multiplier |  | 409,383 |  |  | 6.56 |  |  | 2,685,552 |
Vested |  | (1,773,994) |  |  | 6.56 |  |  | (11,637,401) |
Forfeited |  | (70,616) |  |  | 37.59 |  |  | (2,654,455) |
Outstanding at December 31, 2023 |  | 1,831,553 |  |  | $ | 28.27 |  |  | $ | 51,770,381 |
(a)For the years ended December 31, 2021 and 2020, the Company settled total shares of 9,550 and 7,020, respectively, for Equitrans Midstream employees. (b)The 2022 Incentive PSU Program was granted as a liability award and converted to an equity award in April 2022. The fair value determined through a Monte Carlo simulation at the time of conversion totaled $75.32 per share, which was an increase of $45.59 per share from fair value determined through a Monte Carlo simulation at the grant date. The following table summarizes Incentive PSU Programs to be settled in cash and classified as liability awards.
Incentive PSU Programs – Cash Settled |  | Nonvested Shares (a) |  | Weighted Average Fair Value |  | Aggregate Fair Value
Outstanding at December 31, 2020 |  | 339,695 |  |  | $ | 43.52 |  |  | $ | 14,782,424 |
Granted from Multiplier |  | 32,350 |  |  | 76.53 |  |  | 2,475,746 |
Vested |  | (134,525) |  |  | 76.53 |  |  | (10,293,571) |
Forfeited |  | (3,940) |  |  | 29.45 |  |  | (116,033) |
Outstanding at December 31, 2021 |  | 233,580 |  |  | 29.32 |  |  | 6,848,566 |
Granted from Multiplier |  | 81,753 |  |  | 29.32 |  |  | 2,396,998 |
Vested |  | (315,333) |  |  | 29.32 |  |  | (9,245,564) |
Outstanding at December 31, 2022 |  | — |  |  | $ | — |  |  | $ | — |
(a)For the years ended 2021 and 2020, the Company settled total shares paid in cash of 84,697 and 40,018, respectively, for Equitrans Midstream employees. Total capitalized compensation costs related to the Incentive PSU Programs for the years ended December 31, 2023, 2022 and 2021 were $0.6 million, $0.6 million and $0.8 million, respectively. As of December 31, 2023, $12.9 million and $9.6 million of unrecognized compensation cost (assuming no changes to the performance condition achievement level) related to the 2022 Incentive PSU Program and 2023 Incentive PSU Program, respectively, was expected to be recognized over the remainder of the performance periods. Fair value is estimated using a Monte Carlo simulation valuation method with the following weighted average assumptions at grant date:
| Incentive PSU Programs Issued During the Years Ended December 31,
| 2023 (a) |  | 2022 |  | 2021 (a) |  | 2020 (b) |  | 2019
Risk-free rate | 4.16% |  | 1.52% |  | 0.18% |  | 1.22% |  | 2.44%
Volatility factor | 59.31% |  | 65.38% |  | 72.50% |  | 45.41% |  | 54.60%
Expected term | 3 years |  | 3 years |  | 3 years |  | 3 years |  | 3 years
(a)There were two grant dates for the 2023 Incentive PSU Program and the 2021 Incentive PSU Program. Amounts shown represent weighted average. (b)There were three grant dates for the 2020 Incentive PSU Program. Amounts shown represent weighted average. Dividends paid from the beginning of the performance period will be cumulatively added as additional shares of common stock; therefore, dividend yield is not applicable. Restricted Stock Unit Awards The Company granted 953,270, 1,288,430 and 1,980,230 restricted stock unit equity awards to employees of the Company during the years ended December 31, 2023, 2022 and 2021, respectively. Awards are subject to a three-year graded vesting schedule commencing with the date of grant, assuming continued service through each vesting date. For the years ended December 31, 2023, 2022 and 2021, the weighted average fair value of these restricted stock unit grants, based on the grant date fair value of EQT Corporation common stock, was approximately $31.88, $21.65 and $13.92, respectively. The total fair value of restricted stock unit equity awards vested during the years ended December 31, 2023, 2022 and 2021 was $23.5 million, $16.6 million and $8.6 million, respectively. Total capitalized compensation costs related to the restricted stock unit equity awards was $5.7 million, $6.6 million and $6.7 million for the years ended December 31, 2023, 2022 and 2021, respectively. As of December 31, 2023, $17.1 million of unrecognized compensation cost related to nonvested restricted stock unit equity awards was expected to be recognized over a remaining weighted average vesting term of approximately 0.7 years. The following table summarizes restricted stock unit equity award activity as of December 31, 2023.
Restricted Stock – Equity Settled |  | Nonvested Shares |  | Weighted Average Fair Value |  | Aggregate Fair Value
Outstanding at January 1, 2022 |  | 3,104,281 |  |  | $ | 12.58 |  |  | $ | 39,056,435 |
Granted |  | 1,288,430 |  |  | 21.65 |  |  | 27,893,331 |
Vested |  | (1,368,577) |  |  | 12.16 |  |  | (16,644,859) |
Forfeited |  | (97,189) |  |  | 15.56 |  |  | (1,512,333) |
Outstanding at December 31, 2022 |  | 2,926,945 |  |  | 16.67 |  |  | 48,792,574 |
Granted |  | 953,270 |  |  | 31.88 |  |  | 30,389,954 |
Vested |  | (1,544,968) |  |  | 15.20 |  |  | (23,482,927) |
Forfeited |  | (117,445) |  |  | 24.52 |  |  | (2,879,751) |
Outstanding at December 31, 2023 |  | 2,217,802 |  |  | $ | 23.82 |  |  | $ | 52,819,850 |
Non-Qualified Stock Options The fair value of the Company's option grants was estimated at the grant date using a Black-Scholes option-pricing model with the assumptions indicated in the table below for the year ended December 31, 2020. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the date of grant. The dividend yield is based on the dividend yield of EQT Corporation common stock at the time of grant. Expected volatilities are based on historical volatility of EQT Corporation common stock. The expected term represents the period of time that options granted are expected to be outstanding based on historical option exercise experience. There were no stock options granted in 2023, 2022 and 2021.
| Year Ended December 31, 2020
Risk-free interest rate | 1.10 | %
Dividend yield | — | %
Volatility factor | 60.00 | %
Expected term | 4 years
Number of Options Granted | 1,000,000 |
Weighted Average Grant Date Fair Value | $ | 1.61 |
The total intrinsic value of options exercised during the years ended December 31, 2023 and 2022 was $1.4 million and $20.2 million, respectively. There were no stock option exercises in 2021. The following table summarizes option activity as of December 31, 2023.
Non-Qualified Stock Options |  | Shares |  | Weighted Average Exercise Price |  | Weighted Average Remaining Contractual Term |  | Aggregate Intrinsic Value
Outstanding at January 1, 2023 |  | 1,583,636 |  |  | $ | 18.81 |  |  |  |  |
Exercised |  | (60,100) |  |  | 20.44 |  |  |  |  |
Outstanding and Exercisable at December 31, 2023 |  | 1,523,536 |  |  | $ | 18.75 |  |  | 2.7 years |  | $ | 31,840,100 |
Stock Appreciation Rights During 2020, the Company granted stock appreciation rights subject to certain performance conditions, such as adjusted well costs and adjusted free cash flow. The participant was entitled to receive, upon exercise, a number of shares of EQT Corporation common stock, cash or a combination of the two, based upon the excess of the fair market value as of the date of exercise over a base price of $10.00. The awards were accounted for as liability awards and, as such, compensation expense was recorded based on the fair value of the awards as remeasured at the end of each reporting period. Assumptions at grant date are indicated in the table below. The risk-free rate was based on the U.S. Treasury yield curve in effect at the reporting date. The dividend yield was based on the dividend yield of EQT Corporation common stock at the reporting date. Expected volatilities were based on a 50-50 blend of the expected term-matched historical volatility as of the valuation date and the weighted-average implied volatility from thirty days prior to the valuation date. The expected term represents the period of time between the valuation date and the midpoint of the exercise window.
| 2020 Stock Appreciation Rights
Risk-free interest rate | 0.30 | %
Dividend yield | — | %
Volatility factor | 67.50 | %
Expected term | 3.28 years
Number of Stock Appreciation Rights Granted | 1,240,000
Weighted Average Grant Date Fair Value | $ | 2.61 |
Total Intrinsic Value of Exercises | $ | — |
All outstanding stock appreciation rights were exercised during 2023. The total intrinsic value of stock appreciation rights exercised during the year ended December 31, 2023 was $33.4 million. There were no exercises in 2022 or 2021. The following table summarizes stock appreciation rights activity as of December 31, 2023.
Stock Appreciation Rights |  | Shares |  | Weighted Average Exercise Price |  | Weighted Average Remaining Contractual Term |  | Aggregate Intrinsic Value
Outstanding at January 1, 2023 |  | 1,240,000 |  |  | $ | 10.00 |  |  |  |  |
Exercised |  | (1,240,000) |  |  | 10.00 |  |  |  |  |
Outstanding and Exercisable at December 31, 2023 |  | — |  |  | $ | — |  |  | — |  |  | $ | — |
Non-employee Directors' Share-Based Awards The Company grants to non-employee directors restricted stock unit awards that vest on the date of the Company's annual meeting of shareholders immediately following the grant of such awards. The restricted stock unit awards are settled in EQT Corporation common stock on the vesting date or, if elected by the director, following a director's termination of service on the Company's Board of Directors. Awards granted prior to 2020 that are to be paid in cash are accounted for as liability awards and, as such, compensation expense is recorded based on the fair value of the awards as remeasured at the end of each reporting period. Awards to be settled in EQT Corporation common stock are accounted for as equity awards and, as such, compensation expense is recorded based on the fair value of the awards at the grant date fair value. A total of 421,358 non-employee director share-based awards, including accrued dividends, were outstanding as of December 31, 2023. A total of 66,300, 44,800 and 120,080 share-based awards were granted to non-employee directors during the years ended December 31, 2023, 2022 and 2021, respectively. The weighted average fair value of these grants, based on the closing price of EQT Corporation common stock on the business day prior to the grant date, was $33.31, $43.97 and $17.49 for the years ended December 31, 2023, 2022 and 2021, respectively.

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