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Stock Options and Restricted Shares | 3 Months Ended
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Mar. 31, 2025
Share-Based Payment Arrangement [Abstract] |
Stock Options and Restricted Shares | Note 8. Equity Compensation Pinnacle Financial's Second Amended and Restated 2018 Omnibus Equity Incentive Plan (2018 Plan) permits Pinnacle Financial to reissue outstanding awards that are subsequently forfeited, settled in cash, withheld by Pinnacle Financial to cover withholding taxes or expire unexercised and returned to the 2018 Plan. At March 31, 2025, there were approximately 1.6 million shares available for issuance under the 2018 Plan. Restricted Share Awards A summary of activity for unvested restricted share awards for the three months ended March 31, 2025 is as follows:
| Number |  | Grant Date Weighted-Average Cost
Unvested at December 31, 2024 | 705,934 |  |  | $ | 82.48 |
Shares awarded | 152,381 |  |  |
Restrictions lapsed and shares released to associates/directors | (167,392) |  |  |
Shares forfeited | (9,689) |  |  |
Unvested at March 31, 2025 | 681,234 |  |  | $ | 90.66 |
Pinnacle Financial has granted restricted share awards to associates (including certain members of executive management) and outside directors with time-based vesting criteria. Compensation expense associated with time-based vesting restricted share awards is recognized over the time period that the restrictions associated with the awards lapse on a straight-line basis based on the total cost of the award. The following table outlines restricted stock grants that were made, grouped by similar vesting criteria, during the three months ended March 31, 2025. The table reflects the life-to-date activity for these awards:
Grant year | Group (1) | Vesting period in years | Shares awarded | Restrictions lapsed and shares released to participants | Shares withheld for taxes by participants | Shares forfeited by participants (4) | Shares unvested
Time Based Awards |  |  |  |  |  |  |  |  |
2025 | Associates (2) |  | 5 |  | 146,072 |  | 59 |  | 40 |  | 1,328 |  | 144,645 |
Outside Director Awards (3) |  |  |  |  |  |  |  |  |
2025 | Outside directors |  | 1 |  | 6,309 |  | — |  | — |  | — |  | 6,309 |
(1)Groups include employees (referred to as associates above) and outside directors. When the restricted shares are awarded, a participant receives voting rights and forfeitable dividend rights with respect to the shares, but is not able to transfer the shares until the restrictions have lapsed. Once the restrictions lapse, the participant is taxed on the value of the award and shares are withheld by Pinnacle Financial to pay the applicable income taxes associated with the award. For time-based vesting restricted share awards, dividends paid on shares for which the forfeiture restrictions do not lapse will be recouped by Pinnacle Financial at the time of termination. For awards to Pinnacle Financial's directors, dividends are placed into escrow until the forfeiture restrictions on such shares lapse. (2)The forfeiture restrictions on these restricted share awards lapse in equal annual installments on the anniversary date of the grant. (3)Restricted share awards are issued to the outside members of the board of directors in accordance with their board compensation plan. Restrictions lapse on March 1, 2026 based on each individual board member meeting attendance goals for the various board and board committee meetings to which each member was scheduled to attend. (4)These shares represent forfeitures resulting from recipients whose employment was terminated during the year-to-date period ended March 31, 2025. Any dividends paid on shares for which the forfeiture restrictions do not lapse will be recouped by Pinnacle Financial at the time of termination or will not be distributed from escrow, as applicable. Restricted Stock Unit Awards A summary of activity for unvested restricted stock units for the three months ended March 31, 2025 is as follows:
| Number |  | Grant Date Weighted-Average Cost
Unvested at December 31, 2024 | 109,970 |  |  | $ | 80.84 |
Shares awarded | 39,431 |  |  |
Restrictions lapsed and shares released to associates | (51,105) |  |  |
Shares forfeited | (723) |  |  |
Unvested at March 31, 2025 | 97,573 |  |  | $ | 96.51 |
Pinnacle Financial grants restricted stock units to its Named Executive Officers (NEOs) and leadership team members with time-based vesting criteria. Compensation expense associated with time-based vesting restricted stock unit awards is recognized over the time period that the restrictions associated with the awards lapse on a straight-line basis based on the total cost of the award. The following table outlines restricted stock unit grants that were made, grouped by similar vesting criteria, during the three months ended March 31, 2025. The table reflects the life-to-date activity for these awards:
Grant year | Vesting period in years | Shares awarded |  | Restrictions lapsed and shares released to participants |  | Shares withheld for taxes by participants |  | Shares forfeited by participants (1) |  | Shares unvested
2025 | 3 | 39,431 |  |  | 2 |  |  | 1 |  |  | 59 |  |  | 39,369 |
(1)These shares represent forfeitures resulting from recipients whose employment was terminated during the year-to-date period ended March 31, 2025. Dividend equivalents are held in escrow for award recipients for dividends paid prior to the forfeiture restrictions lapsing. Such dividend equivalents are not released from escrow if an award is forfeited. Performance Stock Unit Awards The following table details the performance stock unit awards outstanding at March 31, 2025:
| Units Awarded |  |  |  |
Grant year | NEOs (1) | Leadership Team other than NEOs | Applicable performance periods associated with each tranche (fiscal year) | Service period per tranche (in years) | Subsequent holding period per tranche (in years) | Period in which units to be settled into shares of common stock (2)
2025 | 50,887 | — | 122,120 |  | 41,008 |  | 2025-2027 | 0 | 0 | 2028
2024 | 80,211 | — | 192,499 |  | 53,710 |  | 2024-2026 | 0 | 0 | 2027
2023 | 103,136 | — | 247,515 |  | 61,673 |  | 2023-2025 | 0 | 0 | 2026
2022 | — | — | 230,000 |  | — |  | 2022-2024 | 0 | 1 | 2026
(1)The NEOs are awarded a range of awards that generally may be earned based on attainment of goals between a target level of performance and a maximum level of performance. The 230,000 performance units awarded to the NEOs in 2022 may be earned based on target level performance and do not include a maximum level payout. (2)Performance stock unit awards granted in or after 2022, if earned, are expected to settle in shares of Pinnacle Financial common stock in the period noted in the table, if the performance criterion included in the applicable performance unit award agreement are met. Performance units granted in 2022 have been earned and will settle in shares of Pinnacle Financial common stock following their post-vest holding period. During the three months ended March 31, 2025 and 2024, respectively, the restrictions associated with 290,036 and 435,881 performance stock unit awards previously granted lapsed based on the terms of the underlying award agreements and approval by Pinnacle Financial's Human Resources and Compensation Committee, and were settled into shares of Pinnacle Financial common stock with 103,319 and 158,117 shares, respectively, being withheld to pay the taxes associated with the settlement of those shares. Stock compensation expense related to restricted share awards, restricted stock unit awards and performance stock unit awards for the three months ended March 31, 2025 was $10.6 million compared to $10.3 million for the three months ended March 31, 2024. As of March 31, 2025, the total compensation cost related to unvested restricted share awards, restricted stock unit awards and performance stock unit awards estimated at maximum performance not yet recognized was $100.8 million. This expense, if the underlying units are earned, is expected to be recognized over a weighted-average period of 2.14 years.

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