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STOCK-BASED COMPENSATION | 6 Months Ended
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Jun. 30, 2025
Share-Based Payment Arrangement [Abstract] |
Stock-Based Compensation | STOCK-BASED COMPENSATION EastGroup applies the provisions of ASC 718, Compensation - Stock Compensation, to account for its stock-based compensation plans. ASC 718 requires that the compensation cost relating to share-based payment transactions be recognized in the financial statements and that the cost be measured on the fair value of the equity or liability instruments issued. The cost for market-based awards and awards that only require service are expensed on a straight-line basis over the requisite service periods. The cost for performance-based awards is determined using the graded vesting attribution method which recognizes each separate vesting portion of the award as a separate award on a straight-line basis over the requisite service period. This method accelerates the expensing of the award compared to the straight-line method. For awards with a performance condition, compensation expense is recognized when the performance condition is considered probable of achievement. The total compensation expense for service-based and performance-based awards is based upon the fair market value of the shares on the grant date. The grant date fair value for awards that have been granted and are subject to a future market condition (total shareholder return) are determined using a Monte Carlo simulation pricing model developed to specifically accommodate the unique features of the awards. The Company accrues dividends on unvested restricted shares and holds the certificates for the shares. Employees may vote the shares once performance-based or market-based conditions are met. Share certificates and dividends are delivered to the employee as the shares vest. Forfeitures of awards are recognized as they occur. The Compensation Committee of the Company’s Board of Directors (the “Committee”) approves long-term and annual equity compensation awards for the Company’s executive officers. The vesting periods of the Company’s restricted stock plans vary, as determined by the Committee. Restricted stock is granted to executive officers subject to both continued service and the satisfaction of certain annual performance goals and multi-year market conditions as determined by the Committee. The long-term compensation awards include components based on the Company’s total shareholder return over the upcoming three years and the employee’s continued service as of the vesting dates. The total shareholder return component is subject to bright-line tests that compare the Company’s total shareholder return to the member companies of the Nareit Equity Index and the Nareit industrial index. The Company begins recognizing expense for these awards based on the grant date fair value of the awards which is determined using a simulation pricing model developed to specifically accommodate the unique features of the award. These market-based awards are expensed on a straight-line basis over the requisite service period (75% vests at the end of the three-year performance period and 25% vests the following year). The long-term awards subject only to continuing employment are expensed on a straight-line basis over the requisite service period (25% vests in each of the following four years). The annual equity compensation awards include components based on certain annual Company performance measures and individual annual performance goals over the upcoming year. The certain Company performance measures for 2025 are: (i) funds from operations (“FFO”) per share, (ii) cash same property net operating income change, (iii) debt-to-EBITDAre ratio, and (iv) fixed charge coverage. The Company begins recognizing expense for its estimate of the shares that could be earned pursuant to these awards on the grant date; the expense is adjusted to estimated performance levels during the performance period and to actual upon the determination of the awards. The shares are expensed using the graded vesting attribution method which recognizes each separate vesting portion of the award as a separate award on a straight-line basis over the requisite service period (34% vests at the end of the one-year performance period and 33% vests in each of the following two years). Any shares issued pursuant to the individual annual performance goals are determined by the Committee in its discretion following the performance period. The Company begins recognizing the expense for the shares on the grant date and will expense on a straight-line basis over the remaining service period (34% vests at the end of the one-year performance period and 33% vests in each of the following two years). Equity compensation is also awarded to the Company’s non-executive officers and directors, which are subject to service only conditions and expensed on a straight-line basis over the required service period. The total compensation expense is based upon the fair market value of the shares on the grant date. The Committee has adopted an Equity Award Retirement Policy (the “retirement policy”) which allows for accelerated vesting of unvested shares for retirement-eligible employees (defined as employees who meet certain age and years of service requirements). In order to qualify for accelerated vesting upon retirement, the eligible employees must provide required notification under the retirement policy and must retire from the Company. The Company has adjusted its stock-based compensation expense to accelerate the recognition of expense for retirement-eligible employees. Stock-based compensation cost for employees was $2,476,000 and $7,061,000 for the three and six months ended June 30, 2025, respectively, of which $365,000 and $924,000 was capitalized as part of the Company’s development costs. For the three and six months ended June 30, 2024, stock-based compensation cost for employees was $2,472,000 and $6,448,000, respectively, of which $400,000 and $1,040,000 was capitalized as part of the Company’s development costs. Stock-based compensation expense for directors was $192,000 and $398,000 for the three and six months ended June 30, 2025, respectively, and $172,000 and $343,000 for the same periods in 2024. Following is a summary of the total restricted shares granted, forfeited and delivered (vested) to participants with the related weighted average grant date fair value share prices. Of the shares that vested in the six months ended June 30, 2025, the Company withheld 24,745 shares to satisfy the tax obligations for those participants who elected this option as permitted under the applicable equity plan. As of the grant dates, the fair value of shares that were granted during the six months ended June 30, 2025 was $9,529,000. As of the vesting dates, the aggregate fair value of shares that vested during the six months ended June 30, 2025 was $10,819,000.
|  | Three Months Ended June 30, 2025 |  | Six Months Ended June 30, 2025
RESTRICTED STOCK ACTIVITY |  | Shares |  | Weighted Average Grant Date Fair Value |  | Shares |  | Weighted Average Grant Date Fair Value
Unvested at beginning of period |  | 75,292 |  |  | $ | 175.87 |  |  | 89,173 |  |  | $ | 160.76 |
Granted (1) (2) |  | 4,884 |  |  | 165.99 |  |  | 50,854 |  |  | 187.37 |
Forfeited |  | — |  |  | — |  |  | — |  |  | — |
Vested |  | (5,040) |  |  | 160.87 |  |  | (64,891) |  |  | 163.70 |
Unvested at end of period |  | 75,136 |  |  | $ | 176.23 |  |  | 75,136 |  |  | $ | 176.23 |
(1)Includes restricted shares granted during the year without performance or market conditions. Also includes restricted shares granted in previous years, for long-term and annual equity compensation awards for the Company's executive officers, for which performance-based or market-based conditions have been satisfied and the resulting number of shares have been determined during the year. (2)Does not include restricted shares subject to open performance periods. For the long-term equity compensation awards established in 2023 and 2024 and the long-term and annual equity compensation awards established in 2025, the number of shares to be earned depends on the satisfaction of performance-based or market-based conditions, which may range from zero to 155,875.

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