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Share-based Payments | 12 Months Ended
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Dec. 31, 2024
Share-Based Payment Arrangement [Abstract] |
Share-based Payments | 24. Share-based Payments The following table summarizes the components of share-based payment expense by consolidated income statement classification:
Year ended December 31, |  | 2024 |  | 2023 |  | 2022
Selling, general and administrative: |  |  |  |  |  |
Stock option compensation expense |  | $ | 3.5 |  |  | $ | 7.7 |  |  | $ | 12.2 |
Equity-classified share units |  | 47.1 |  |  | 32.0 |  |  | 22.0 |
Liability-classified share units |  | 2.9 |  |  | 2.5 |  |  | — |
Employee share purchase plan |  | 7.3 |  |  | 4.7 |  |  | 2.8 |
|  | 60.8 |  |  | 46.9 |  |  | 37.0 |
Acquisition-related and integration costs: |  |  |  |  |  |
Acceleration of share-based payments expense |  | 1.0 |  |  | 6.8 |  |  | — |
Share-based continuing employment costs |  | 0.6 |  |  | 3.8 |  |  | 7.5 |
|  | 1.6 |  |  | 10.6 |  |  | 7.5 |
|  | $ | 62.4 |  |  | $ | 57.5 |  |  | $ | 44.5 |
Conversion of IAA Share Based Awards In connection with the acquisition of IAA in March 2023, IAA’s stock options, RSUs and PSU awards were cancelled and exchanged into 187,727 Company stock options and 366,379 Company RSU awards. At the closing of the acquisition, the converted share-based awards had an estimated aggregate fair value of $24.9 million, of which $4.8 million was attributable to post-combination services and is being recognized as share-based payments expense over the remaining service periods. The Company awards are subject to the same terms and conditions as applicable to the corresponding IAA equity awards held prior to the acquisition of IAA, including vesting terms, with the exception of any Company RSU awards that replace IAA’s PSU awards, where vesting will no longer be subject to the achievement of performance goals and will be solely based on providing continued services to the Company through the end of the applicable service period. Stock Option Plans On May 8, 2023, the Company’s shareholders approved the 2023 Share Incentive Plan (“2023 Plan”) under which 9,355,000 common shares of the Company were reserved for issuance. The 2023 Plan allows the Company to grant to employees, officers, non-employee directors and other key persons various types of equity-based awards, including stock options, PSUs and RSUs. At December 31, 2024, there were 7,958,801 (December 31, 2023: 8,511,523) shares available for issuance under the 2023 Plan. The following table summarizes stock option activity:
| Stock options |  | Premium-priced stock options
| Common shares under option |  | WA exercise price |  | WA remaining contractual life (in years) |  | Aggregate intrinsic value |  | Common shares under option |  | WA exercise price |  | WA remaining contractual life (in years) |  | Aggregate intrinsic value
Outstanding, December 31, 2021 | 2,208,057 |  | $ | 42.55 |  |  | 7.7 |  | $ | 41.9 |  |  | 1,017,064 |  | $ | 91.24 |  |  | 5.7 |  | $ | — |
Granted | 710,847 |  | 58.08 |  |  | — |  |  | — |  |  | 119,157 |  | 91.37 |  |  | — |  |  | — |
Exercised | (159,920) |  | 36.72 |  |  | — |  |  | 4.5 |  |  | — |  | — |  |  | — |  |  | — |
Forfeited | (28,689) |  | 48.09 |  |  | — |  |  | — |  |  | (17,789) |  | 90.93 |  |  | — |  |  | — |
Outstanding, December 31, 2022 | 2,730,295 |  | $ | 46.88 |  |  | 7.3 |  | $ | 31.2 |  |  | 1,118,432 |  | $ | 91.26 |  |  | 4.7 |  | $ | — |
Granted | 262,725 |  | 58.09 |  |  | — |  |  | — |  |  | — |  | — |  |  | — |  |  | — |
Assumed in IAA acquisition | 187,727 |  | 50.96 |  |  | — |  |  | — |  |  | — |  | — |  |  | — |  |  | — |
Exercised | (721,503) |  | 47.67 |  |  | — |  |  | 10.3 |  |  | — |  | — |  |  | — |  |  | — |
Forfeited | (140,162) |  | 53.84 |  |  | — |  |  | — |  |  | (225,765) |  | 91.26 |  |  | — |  |  | — |
Outstanding, December 31, 2023 | 2,319,082 |  | $ | 47.82 |  |  | 6.3 |  | $ | 44.5 |  |  | 892,667 |  | $ | 91.26 |  |  | 3.6 |  | $ | — |
Exercised | (978,238) |  | 44.71 |  |  | — |  |  | 31.8 |  |  | (66,309) |  | 83.92 |  |  | — |  |  | 0.4 |
Forfeited | (12,773) |  | 53.96 |  |  | — |  |  | — |  |  | (110,671) |  | 95.46 |  |  | — |  |  | — |
Outstanding, December 31, 2024 | 1,328,071 |  | $ | 50.05 |  |  | 5.5 |  | $ | 49.9 |  |  | 715,687 |  | $ | 91.29 |  |  | 2.5 |  | $ | 1.3 |
Exercisable, December 31, 2024 | 969,828 |  | $ | 47.14 |  |  | 4.9 |  | $ | 41.8 |  |  | 435,789 |  | $ | 91.24 |  |  | 2.5 |  | $ | 1.3 |
Stock options The Company did not grant any stock options during the year ended December 31, 2024. Stock options granted previously have been valued using the Black Scholes option pricing model. Expected volatility was based upon the historical volatility of the Company's common shares for the period corresponding with the expected term of the options. Stock options were granted with an exercise price equal to the fair market value of the Company’s common shares at the grant date, with a three-year vesting period and terms not exceeding 10 years. The options outstanding at December 31, 2024 expire on dates ranging to August 8, 2033. The weighted average grant date fair value of options granted during the years ended December 31, 2023 and December 31, 2022 were $17.63 and $14.35, respectively. The significant assumptions used to estimate the fair value of stock options granted in 2022 and 2023 are presented in the following table on a weighted average basis:
|  |  |  | December 31, 2023 |  | December 31, 2022
Risk free interest rate |  |  |  | 4.2 | % |  | 2.2 | %
Expected dividend yield |  |  |  | 1.84 | % |  | 1.74 | %
Expected lives of the stock options |  |  |  | 4 years |  | 4 years
Expected volatility |  |  |  | 35.8 | % |  | 31.8 | %
At December 31, 2024, the unrecognized stock-based compensation cost related to non-vested stock options was $0.9 million, which is expected to be recognized over a weighted average period of 0.9 years. Cash received from stock-based award exercises for the year ended December 31, 2024 was $49.3 million (2023: $34.5 million; 2022: $5.9 million). The actual tax benefit realized related to the exercise of stock options totaled $2.3 million for the year ended December 31, 2024 (2023: $0.8 million; 2022: $0.4 million). The fair value of the stock options assumed in the acquisition of IAA in March 2023 was estimated on the acquisition date using the Black-Scholes option pricing model. The weighted average fair value of the assumed options was $15.52. The significant assumptions used to estimate the fair value of these assumed stock options are presented in the following table on a weighted average basis:
|  | December 31, 2023
Risk free interest rate |  | 3.9 | %
Expected dividend yield |  | 2.05 | %
Expected lives of the stock options |  | 2 years
Expected volatility |  | 33.3 | %
Premium-priced Stock Options In 2021 and 2022, the Company granted premium-priced stock options to senior executives with exercise prices above the fair market value of the Company’s common shares on the respective grant dates, and which vest and become exercisable upon the third anniversary of their grant date. The weighted average estimated grant date fair value was $8.00 per option. The significant assumptions used to estimate the fair values using a Monte Carlo simulation model were as follows:
|  |  |  | December 31, 2022
Risk free interest rate |  |  |  | 3.0 | %
Expected dividend yield |  |  |  | 1.63 | %
Expected lives of the stock options |  |  |  | 4 years
Expected volatility |  |  |  | 30.2 | %
At December 31, 2024, the unrecognized compensation expense associated with premium-price options was nil. Share Units The following table summarizes share unit activity:
| Equity-classified |  | Liability-classified
| PSUs (Performance Conditions) |  | PSUs (Market Conditions) |  | RSUs |  | DSUs
| Number |  | WA grant date fair value |  | Number |  | WA grant date fair value |  | Number |  | WA grant date fair value |  | Number |  | WA grant date fair value
Outstanding, December 31, 2021 | 523,618 |  | $ | 45.90 |  |  | 88305 |  | $ | 65.45 |  |  | 79,112 |  | $ | 54.96 |  |  | 156,589 |  | $ | 35.28 |
Granted | 236,855 |  | 58.53 |  |  | 14,574 |  | 69.92 |  |  | 34,495 |  | 57.71 |  |  | 21,824 |  | 58.24 |
Vested and settled | (93,241) |  | 36.42 |  |  | — |  | — |  |  | (37,714) |  | 50.29 |  |  | (70,048) |  | 36.13 |
Forfeited | (4,598) |  | 51.76 |  |  | — |  | — |  |  | (7,869) |  | 60.30 |  |  | — |  | — |
Outstanding, December 31, 2022 | 662,634 |  | $ | 51.71 |  |  | 102,879 |  | $ | 66.08 |  |  | 68,024 |  | $ | 58.32 |  |  | 108,365 |  | $ | 39.35 |
Granted | 94,729 |  | 58.04 |  |  | 80,398 |  | 85.33 |  |  | 425,309 |  | 53.35 |  |  | 24,573 |  | 55.49 |
Assumed in IAA acquisition | — |  |  | — |  |  | — |  | — |  |  | 366,379 |  | 52.79 |  |  | — |  | — |
Vested and settled | (283,086) |  | 42.23 |  |  | — |  | — |  |  | (309,102) |  | 53.22 |  |  | (32,378) |  | 54.68 |
Forfeited | (58,848) |  | 60.62 |  |  | (9,017) |  | 68.59 |  |  | (10,939) |  | 55.06 |  |  | — |  | — |
Outstanding at December 31, 2023 | 415,429 |  | $ | 58.35 |  |  | 174,260 |  | $ | 74.83 |  |  | 539,671 |  | $ | 53.64 |  |  | 100,560 |  | $ | 38.36 |
Granted | 164,520 |  |  | 76.11 |  |  | 162,942 |  |  | 122.91 |  |  | 340,271 |  |  | 76.64 |  |  | 11,887 |  | 72.93 |
Vested and settled | (114,315) |  |  | 58.79 |  |  | (58,511) |  |  | 66.08 |  |  | (237,766) |  |  | 53.74 |  |  | (38,957) |  | 45.28 |
Forfeited | (15,459) |  |  | 58.37 |  |  | (9,737) |  |  | 84.04 |  |  | (34,371) |  |  | 62.12 |  |  | — |  | — |
Outstanding at December 31, 2024 | 450,175 |  | $ | 64.73 |  |  | 268,954 |  | $ | 105.53 |  |  | 607,805 |  | $ | 66.00 |  |  | 73,490 |  | $ | 40.29 |
PSUs PSUs are granted to executives and senior employees and may contain performance vesting conditions or market vesting conditions, conditional upon the Company's total shareholder return relative to a peer group. PSUs typically have three year performance and market vesting conditions. The PSUs with market conditions granted in June 2022 have approximately a two year performance period to coincide with the remaining performance period of the August 2021 grant. The fair value of PSUs with performance conditions are estimated on the respective grant date using the closing price of the Company’s common shares listed on the NYSE. The fair value of PSUs with market conditions are estimated on the grant date using a Monte Carlo simulation model. The significant assumptions used to estimate the fair value are presented in the following table on a weighted average basis:
|  | December 31, 2024 |  | December 31, 2023 |  | December 31, 2022
Risk free interest rate |  | 4.4 | % |  | 4.5 | % |  | 2.7 | %
Expected dividend yield |  | — | % |  | — | % |  | 1.63 | %
Expected lives of the PSUs |  | 3 years |  | 2 years |  | 2 years
Expected volatility |  | 32.2 | % |  | 32.7 | % |  | 33.4 | %
Average expected volatility of comparable companies |  | 48.3 | % |  | 48.6 | % |  | 34.4 | %
At December 31, 2024, the unrecognized share unit expense related to PSUs with market conditions was $17.1 million, which is expected to be recognized over a weighted average period of 2.07 years and the unrecognized share unit expense related to PSUs with performance conditions was $12.0 million, which is expected to be recognized over a weighted average period of 1.92 years. RSUs RSUs granted to employees typically vest over a three year service period and RSUs granted to directors vest on the earlier of (i) the one year anniversary of the grant date and (ii) the date of the Company's next annual meeting of shareholders. The issuance of shares related to RSUs granted to directors may be deferred at the holder's election. Fair values of RSUs are estimated on grant date using the closing price of the Company’s common shares listed on the NYSE. At December 31, 2024, the unrecognized share unit expense related to equity-classified RSUs was $16.5 million, which is expected to be recognized over a weighted average period of 1.38 years. DSUs Fair values of DSUs are estimated on the respective grant date and at each reporting date using the closing price of the Company’s common shares listed on the NYSE. DSUs are granted to members of the Board of Directors. There is no unrecognized share unit expense related to liability-classified DSUs as they vest immediately and are expensed upon grant. At December 31, 2024, the Company had a total share unit liability of $8.4 million (2023: $7.6 million) in respect of DSUs presented in trade and other liabilities. The total market value of liability-classified share units which vested during the year ended December 31, 2024 was $3.2 million (2023: $1.8 million; 2022: $4.9 million). Employee Share Purchase Plan In February 2023, the Board approved the suspension of the Company’s 1999 Employee Stock Purchase Plan. On May 8, 2023, the Company's shareholders approved the 2023 Employee Stock Purchase Plan (the "2023 ESPP") under which 3,000,000 common shares of the Company were reserved for issuance. The 2023 ESPP allows eligible employees to contribute up to 15% of their base compensation during each semi-annual offering period, up to twenty-five thousand dollars, towards the purchase of the Company’s stock, at 85% of the lower of the fair market value on: i. the first day of the applicable offering period, or ii. the last day of the applicable purchase period within the offering period. Employees also have the option to participate through a cashless program, by electing to settle on a net basis on purchase date. At the end of each purchase period, employee contributions are used to purchase the Company's common stock. During each of the years ended December 31, 2024 and December 31, 2023, there were two offerings under the 2023 ESPP. The 2024 offerings had weighted average grant date fair values of $15.94 and $19.42 (2023: $11.99 and $12.43). The significant assumptions used to estimate the fair value of ESPP awards are presented in the following table on a weighted average basis:
|  | December 31, 2024 |  | December 31, 2023
Risk free interest rate |  | 4.4 | % |  | 5.3 | %
Expected dividend yield |  | 1.26 | % |  | 1.81 | %
Expected lives of the ESPP |  | 9 months |  | 8 months
Expected volatility |  | 27.5 | % |  | 28.1 | %

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