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SHARE-BASED COMPENSATION | 9 Months Ended
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Sep. 30, 2024
Share-Based Payment Arrangement [Abstract] |
SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION Performance Restricted Stock Units Performance Restricted Stock Units granted in 2024 with a market condition Certain share-settled performance restricted stock units granted in 2024 include a market condition which is the Company’s total shareholder return relative to its peer group ("Relative TSR") over the performance period. Relative TSR is calculated in accordance with the terms of the applicable award agreement. If performance goals are achieved, these awards will cliff vest at the end of a three-year performance period within a range of 0% to 200% of target. Performance Restricted Stock Units granted in 2024 with a performance condition Certain share-settled performance restricted stock units granted in 2024 include a performance condition which is the Company’s average annual growth in book value per diluted common share, plus accumulated dividends over the performance period, adjusted to exclude unrealized investment gains (losses) recognized in accumulated other comprehensive income (loss), and share repurchases during the performance period ("Adjusted DBVPS"). Adjusted DBVPS is calculated in accordance with the terms of the applicable award agreement. If performance goals are achieved, these awards will cliff vest at the end of a three-year performance period within a range of 0% to 200% of target. Valuation assumptions Performance Restricted Stock Units granted in 2024 and 2023 with a market condition The fair value of these performance restricted stock units was measured on the grant date using a Monte Carlo simulation model. The following table provides details of the significant inputs used in the Monte Carlo simulation model:
| Nine months ended September 30, | 2024 | 2023 (1) |  | 2023 (2) |  | 2023 (3)
| Expected volatility | 26.00% | 36.24% |  | 29.30% |  | 30.05%
| Expected term (in years) | 3.0 | 3.0 |  | 1.0 |  | 3.0
| Expected dividend yield | n/a | n/a |  | n/a |  | n/a
| Risk-free interest rate | 4.06% | 3.79% |  | 4.61% |  | 3.39%
n/a - not applicable (1) Performance restricted stock units granted in the ordinary course of business (2) Performance restricted stock units granted in the three months ended March 31, 2023 in relation to senior leadership transition (3) Performance restricted stock units granted in the three months ended June 30, 2023 in relation to senior leadership transition Beginning share price, Ending share price and Expected term Performance restricted stock units granted in 2024 The beginning share price for awards was based on the average closing share price over the 30 trading days preceding and including the start of the performance period. The ending share price was based on the average projected closing share price over the 30 trading days preceding and including the end of the performance period. Performance for these awards is measured from January 1, 2024 to December 31, 2026. Performance restricted stock units granted in 2023 and performance restricted stock units granted in the three months ended March 31, 2023 in relation to senior leadership transition The beginning share price for awards was based on the average closing share price over the 10 trading days preceding and including the start of the performance period. The ending share price was based on the projected average closing share price over the 10 trading days preceding and including the end of the performance period. Performance for awards granted in 2023 is generally measured from January 1, 2023 to December 31, 2025, with performance for awards granted to one senior leader being measured from January 1, 2023 to December 31, 2023. Performance restricted stock units granted in 2023 in the three months ended June 30, 2023 in relation to senior leadership transition The beginning share price for awards was based on the average closing share price over the 30 trading days preceding and including the start of the performance period. The ending share price of the awards was based on the average closing share price over the 30 trading days preceding and including the end of the performance period. Performance for awards being measured from May 4, 2023 to May 4, 2026 Expected volatility The expected volatility is estimated based on the Company's historical share price volatility. Expected dividend yield The expected dividend yield is not applicable to the performance restricted stock units as dividends are paid at the end of the vesting period and do not affect the value of the performance restricted stock units. Risk-free interest rate The risk-free rate is estimated based on the yield on a U.S. treasury zero-coupon bond issued with a remaining term equal to the vesting period of the performance restricted stock units. Compensation expense associated with performance restricted stock units granted in 2024 and 2023 is determined on the grant date based on the fair value calculated by the Monte Carlo simulation model, and is recognized on a straight-line basis over the requisite service period. During the three months ended March 31, 2023, the transition in our senior leadership resulted in a modification of the previously existing vesting terms of the outstanding restricted stock units and performance restricted stock units granted in 2022 and earlier of one senior leader, and a modification of the performance period of that leader's performance restricted stock units granted in 2022. The modifications did not result in incremental compensation expense. Performance Restricted Stock Units granted in 2024 with a performance condition The fair value of these performance restricted stock units was determined based on the closing price of the Company's common shares on the grant date, and compensation expense is recognized on a straight-line basis over the requisite service period, and is subject to periodic adjustment based on the achievement of established performance criteria during the performance period. The following table provides an activity summary of the Company's share-settled restricted stock units for the nine months ended September 30, 2024:
|  | Share-Settled Performance Restricted Stock Units |  | Share-Settled Service Restricted Stock Units |
|  | Number of restricted stock units |  | Weighted average grant date fair value |  | Number of restricted stock units |  | Weighted average grant date fair value |
| Non-vested restricted stock units - beginning of period | 144 |  |  | $ | 65.69 |  |  | 1,855 |  |  | $ | 55.21 |  |
| Granted | 104 |  |  | 65.77 |  |  | 728 |  |  | 59.79 |  |
| Vested | — |  |  | — |  |  | (732) |  |  | 54.70 |  |
| Forfeited | (1) |  |  | 65.78 |  |  | (161) |  |  | 56.49 |  |
| Non-vested restricted stock units - end of period | 247 |  |  | $ | 65.73 |  |  | 1,690 |  |  | $ | 57.32 |  |
The following table provides additional information related to share-based compensation:
| Nine months ended September 30, | 2024 |  | 2023 |
| Share-based compensation expense | $ | 33,441 |  |  | $ | 43,516 |  |
| Tax benefits associated with share-based compensation expense | $ | 6,274 |  |  | $ | 6,640 |  |
| Fair value of restricted stock units vested(1) | $ | 44,710 |  |  | $ | 54,654 |  |
| Unrecognized share-based compensation expense | $ | 70,073 |  |  | $ | 76,871 |  |
| Expected weighted average period associated with the recognition of unrecognized share-based compensation expense | 2.5 years |  | 2.5 years |
(1) Fair value is based on the closing price of the Company's common shares on the vest date.

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