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Incentive Plans | 12 Months Ended
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Dec. 31, 2020
Share-based Payment Arrangement [Abstract] |
Incentive Plans | Incentive Plans 2013 Long-Term Incentive Plan Effective August 30, 2013, certain of our employees began to participate in the Murphy USA 2013 Long-Term Incentive Plan, which was subsequently amended and restated effective as of February 8, 2017 (the “MUSA 2013 Plan”). The MUSA 2013 Plan authorizes the Executive Compensation Committee of our Board of Directors (“the Committee”) to grant non-qualified or incentive stock options, stock appreciation rights, stock awards (including restricted stock and restricted stock unit awards), dividend equivalent units, cash awards, and performance awards to our employees. No more than 5.5 million shares of common stock may be delivered under the MUSA 2013 Plan and no more than 1 million shares of common stock may be awarded to any one employee, subject to adjustment for changes in capitalization. The maximum cash amount payable pursuant to any “performance-based” award to any participant in any calendar year is $5.0 million. During the period from August 30, 2013 to December 31, 2020, the Company granted a total of 2,491,559 awards from the MUSA 2013 Plan which leaves 3,008,441 remaining shares to be granted in future years (after consideration of the amendments made to the MUSA 2013 Plan in February 2014 by the Board of Directors). At present, the Company expects to issue all shares that vest out of existing treasury shares rather than issuing new common shares. 2013 Stock Plan for Non-employee Directors Effective August 8, 2013, Murphy USA adopted the 2013 Murphy USA Stock Plan for Non-employee Directors (the “Directors Plan”). The directors for Murphy USA are compensated with a mixture of cash payments and equity- based awards. Awards under the Directors Plan may be in the form of restricted stock, restricted stock units, stock options, or a combination thereof. An aggregate of 500,000 shares of common stock shall be available for issuance of grants under the Directors Plan. Since 2013, 133,430 time-based restricted stock units have been granted under the terms of the Directors Plan which leaves 366,570 shares available to be granted in the future. Amounts recognized in the financial statements by the Company with respect to all share-based plans are shown in the following table.
|  | Years Ended December 31,
(Millions of dollars) |  | 2020 |  | 2019 |  | 2018
Compensation charged against income before income tax benefit |  | $ | 14.3 |  |  | $ | 10.5 |  |  | $ | 9.2 |
Related income tax benefit recognized in income |  | $ | 3.0 |  |  | $ | 2.2 |  |  | $ | 1.9 |
As of December 31, 2020, there was $18.1 million in compensation costs to be expensed over approximately the next 1.7 years related to unvested share-based compensation arrangements granted by the Company. Employees who have stock options are required to net settle their options in shares, after applicable statutory withholding taxes are considered, upon each stock option exercise. Therefore, no cash is received upon exercise. Total income tax benefits realized from tax deductions related to stock option exercises under share-based payment arrangements were $0.7 million, $0.1 million, and $2.1 million for the years ended December 31, 2020, 2019, and 2018, respectively. Concurrent with its initial quarterly dividend in December 2020, the Company issued dividend equivalent units ("DEU") on all outstanding, unvested equity awards (except stock options) in an amount commensurate with regular quarterly dividends paid on common stock. The terms of the DEU mirror the underlying awards and will only vest if the related award vests. DEU's issued are included with grants in each respective table as applicable. STOCK OPTIONS – The Committee fixes the option price of each option granted at no less than fair market value (FMV) on the date of the grant and fixes the option term at no more than 7 years from such date. In February 2020, the Committee granted nonqualified stock options to certain employees of the Company. Following are the assumptions used by the Company to value the original awards:
| Years Ended December 31,
| 2020 |  | 2019 |  | 2018
Fair value per option grant | $ | 28.28 |  |  | $ | 20.48 |  |  | $ | 17.32 |
Assumptions |  |  |  |  |
Dividend yield | — |  |  | — |  |  | — |
Expected volatility | 28.1 | % |  | 26.8 | % |  | 27.0 | %
Risk-free interest rate | 1.5 | % |  | 2.5 | % |  | 2.4 | %
Expected life (years) | 4.7 |  | 4.5 |  | 3.9
Stock price at valuation date | $ | 106.72 |  |  | $ | 76.15 |  |  | $ | 71.00 |
Changes in options outstanding for Company employees during the period from December 31, 2019 to December 31, 2020 are presented in the following table:
Options | Number of Shares |  | Weighted Average Exercise Price |  | Weighted Average Remaining Contractual Term (Years) |  | Aggregate Intrinsic Value (Millions of Dollars)
Outstanding at December 31, 2019 | 392,300 |  |  | 68.52 |  |  |  |  |
Granted | 79,200 |  |  | 105.57 |  |  |  |  |
Exercised | (148,800) |  |  | 64.21 |  |  |  |  |
Outstanding at December 31, 2020 | 322,700 |  |  | $ | 79.60 |  |  | 4.6 |  | $ | 16.5 |
Exercisable at December 31, 2020 | 110,700 |  |  | $ | 66.91 |  |  | 3.3 |  | $ | 7.1 |
Additional information about stock options outstanding at December 31, 2020 is shown below:
|  | Options Outstanding | Options Exercisable
Range of Exercise Prices per Option |  | No. of Options |  | Avg. Life Remaining in Years |  | No. of Options |  | Avg. Life Remaining in Years |
$50.00 to $59.99 |  | 7,300 |  |  | 2.1 |  | 7,300 |  |  | 2.1 |
$60.00 to $69.99 |  | 69,500 |  |  | 3.1 |  | 69,500 |  |  | 3.1 |
$70.00 to $79.99 |  | 166,700 |  |  | 4.6 |  | 33,900 |  |  | 3.9 |
$80.00 to $89.99 |  | 3,600 |  |  | 6.2 |  | — |  |  |  |
$100.00 to $109.99 |  | 75,600 |  |  | 6.1 |  | — |  |  |  |
|  | 322,700 |  |  | 4.6 |  | 110,700 |  |  | 3.3 |
RESTRICTED STOCK UNITS (MUSA 2013 Plan) – The Committee has granted time based restricted stock units (RSUs) as part of the compensation plan for its executives and certain other employees since its inception. The awards granted in the current year were under the MUSA 2013 Plan, are valued at the grant date fair value, and vest over three years. Changes in restricted stock units outstanding for Company employees during the period from December 31, 2019 to December 31, 2020 are presented in the following table:
Employee RSUs | Number of units |  | Weighted Average Grant Date Fair Value |  | Total Fair Value (Millions of Dollars)
Outstanding at December 31, 2019 | 198,915 |  |  | $ | 70.58 |  |  |
Granted | 55,734 |  |  | $ | 90.09 |  |  |
Vested and issued | (59,324) |  |  | $ | 66.31 |  |  | $ | 6.4 |
Forfeited | (12,530) |  |  | $ | 78.43 |  |  |
Outstanding at December 31, 2020 | 182,795 |  |  | $ | 77.38 |  |  | $ | 23.9 |
PERFORMANCE-BASED RESTRICTED STOCK UNITS (MUSA 2013 Plan) – In February 2020, the Committee awarded performance-based restricted stock units (performance units) to certain employees. Half of the performance units vest based on a three-year return on average capital employed (ROACE) calculation and the other half vest based on a three-year total shareholder return (TSR) calculation that compares MUSA to a group of 18 peer companies. The portion of the awards that vest based on TSR qualify as a market condition and must be valued using a Monte Carlo valuation model. For the TSR portion of the awards, the fair value was determined to be $142.07 per unit. For the ROACE portion of the awards, the valuation was based on the grant date fair value of $106.72 per unit and the number of awards will be periodically assessed to determine the probability of vesting. Changes in performance-based restricted stock units outstanding for Company employees during the period from December 31, 2019 to December 31, 2020 are presented in the following table:
Employee PSU's | Number of Units |  | Weighted Average Grant Date Fair Value |  | Total Fair Value (Millions of Dollars)
Outstanding at December 31, 2019 | 131,200 |  |  | $ | 82.98 |  |  |
Granted | 64,290 |  |  | $ | 122.95 |  |  |
Vested and issued | (65,745) |  |  | $ | 85.04 |  |  | $ | 7.0 |
Forfeited | (405) |  |  | $ | 65.75 |  |  |
Outstanding at December 31, 2020 | 129,340 |  |  | $ | 97.01 |  |  | $ | 16.9 |
RESTRICTED STOCK UNITS (Directors Plan) – The Committee has also granted time based RSUs to the non-employee directors of the Company as part of their overall compensation package for being a member of the Board of Directors. These awards typically vest at the end of three years. Changes in restricted stock units outstanding for Company non-employee directors during the period from December 31, 2019 to December 31, 2020 are presented in the following table:
Director RSU's | Number of Units |  | Weighted Average Grant Date Fair Value |  | Total Fair Value (Millions of Dollars)
Outstanding at December 31, 2019 | 33,607 |  |  | $ | 70.68 |  |  |
Granted | 9,801 |  |  | $ | 105.33 |  |  |
Vested and issued | (12,404) |  |  | $ | 66.01 |  |  | $ | 1.3 |
Outstanding at December 31, 2020 | 31,004 |  |  | $ | 83.31 |  |  | $ | 4.1 |

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- Definition The entire disclosure for share-based payment arrangement. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 + Details
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