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Share-based Compensation and Other Employment Benefit Plans | 12 Months Ended
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Dec. 31, 2020
Share-based Payment Arrangement [Abstract] |
Share-based Compensation and Other Employment Benefit Plans | Note 17 - Share-based Compensation and Other Employment Benefit Plans General Description of Share-based Plans Synovus has a long-term incentive plan under which the Compensation Committee of the Board of Directors has the authority to grant share-based awards to Synovus employees. The 2013 Omnibus Plan authorizes 8.6 million common share equivalents available for grant, where grants of options count as one share equivalent and grants of full value awards (e.g., restricted share units, market restricted share units, and performance share units) count as two share equivalents. Any restricted share units that are forfeited and options that expire unexercised will again become available for issuance under the Plan. At December 31, 2020, Synovus had a total of 1.5 million common share equivalents of its authorized but unissued common stock reserved for future grants under the 2013 Omnibus Plan. The Plan permits grants of share-based compensation including stock options, restricted share units, market restricted share units, and performance share units. The grants generally include vesting periods of three years. The restricted share units and the market restricted share units contain a service-based vesting period of three years with most awards vesting pro-rata over three years. As further discussed below, market restricted share units and performance share units are granted at a defined target level and are compared annually to required market and performance metrics to determine actual units vested and for performance share units, compensation expense. Synovus has historically issued new shares to satisfy share option exercises and share unit conversions. Dividend equivalents are paid on outstanding restricted share units, market restricted share units, and performance share units in the form of additional restricted share units that vest over the same vesting period or the vesting period left on the original restricted share unit grant. Share-based Compensation Expense Total share-based compensation expense recognized for 2020, 2019, and 2018 is presented in the following table by its classification within total non-interest expense.
| Years Ended December 31,
(in thousands) | 2020 |  | 2019 |  | 2018
Salaries and other personnel expense | $ | 17,827 |  |  | $ | 19,618 |  |  | $ | 15,712 |
Merger-related expense | — |  |  | 4,219 |  |  | — |
Other operating expenses | 814 |  |  | 650 |  |  | 931 |
Total share-based compensation expense included in non-interest expense | $ | 18,641 |  |  | $ | 24,487 |  |  | $ | 16,643 |
The total income tax benefit recognized in the consolidated statements of income related to share-based compensation expense was approximately $4.8 million, $6.3 million, and $4.3 million for 2020, 2019, and 2018, respectively. No share-based compensation costs have been capitalized for the years ended December 31, 2020, 2019, and 2018. As of December 31, 2020, total unrecognized compensation cost related to the unvested portion of share-based compensation arrangements involving shares of Synovus stock was $26.1 million consisting of unrecognized compensation cost related to restricted share units of $22.1 million, market restricted share units of $1.4 million, and performance share units of $2.6 million. This cost is expected to be recognized over a weighted average remaining period of 1.47 years. Stock Options There were no stock option grants in 2020, 2019, or 2018; however, Synovus assumed 3.2 million outstanding employee and director stock options in the Merger on January 1, 2019. The estimated fair value of the converted stock options was determined using a Hull-White model in a binomial lattice option pricing framework with the following weighted average assumptions:
| 2019
Stock price (Synovus' closing stock price on December 31, 2018) | $ | 31.99 |
Weighted average fair value of converted stock options | 11.50 |
Risk-free interest rate | 2.51 | %
Expected stock price volatility | 26.4 | %
Dividend yield | 3.13 | %
Term to expiration | 5.1 years
A summary of stock option activity and changes during the years ended December 31, 2020, 2019, and 2018 is presented below.
Stock Options |  |  |  |  |  |  |  |  |
| 2020 |  | 2019 |  | 2018
(in thousands, except per share data) | Quantity |  | Weighted-Average Exercise Price |  | Quantity |  | Weighted-Average Exercise Price |  | Quantity |  | Weighted-Average Exercise Price
Outstanding at beginning of year | 3,037 |  |  | $ | 22.74 |  |  | 640 |  |  | $ | 16.93 |  |  | 775 |  |  | $ | 17.85 |
Assumed in acquisition | — |  |  | — |  |  | 3,230 |  |  | 23.22 |  |  | — |  |  | — |
Options exercised | (572) |  |  | 22.67 |  |  | (820) |  |  | 19.91 |  |  | (126) |  |  | 16.92 |
Options forfeited/expired/canceled | (64) |  |  | 33.50 |  |  | (13) |  |  | 34.23 |  |  | (9) |  |  | 92.26 |
Options outstanding at end of year | 2,401 |  |  | $ | 22.47 |  |  | 3,037 |  |  | $ | 22.74 |  |  | 640 |  |  | $ | 16.93 |
Options exercisable at end of year | 2,401 |  |  | $ | 22.47 |  |  | 2,399 |  |  | $ | 19.52 |  |  | 640 |  |  | $ | 16.93 |
The aggregate intrinsic value for both outstanding and exercisable stock options at December 31, 2020 was $25.1 million with a weighted average remaining contractual life of 3.27 years. The grant date fair value of stock options vested during the year ended December 31, 2020 was $5.3 million, with vesting occurring on January 1, 2020. The intrinsic value of stock options exercised during the years ended December 31, 2020, 2019, and 2018 was $5.3 million, $13.6 million, and $4.4 million, respectively. Restricted Share Units, Market Restricted Share Units, and Performance Share Units Compensation expense is measured based on the grant date fair value of restricted share units, market restricted share units, and performance share units. The fair value of restricted share units and performance share units that do not contain market conditions is equal to the market price of common stock on the grant date. The fair value of market restricted share units granted was estimated on the date of grant using a Monte Carlo simulation model with the following weighted average assumptions:
|  | 2020 |  | 2019 |  | 2018
Risk-free interest rate |  | 1.42 | % |  | 2.40 | % |  | 2.32 | %
Expected stock price volatility |  | 25.4 |  |  | 24.4 |  |  | 22.5 |
Dividend yield |  | 3.6 |  |  | 2.9 |  |  | 1.3 |
Simulation period |  | 3.0 years |  | 3.0 years |  | 3.0 years
The stock price expected volatility was based on Synovus' historical volatility for grants in 2020 and 2019 and Synovus' historical and implied volatility for the 2018 grants. The Monte Carlo model estimates fair value based on 100,000 simulations of future share price using a theoretical model of stock price behavior. Synovus granted performance share units, which included a market condition with respect to 50% of the award, to senior management during the year ended December 31, 2020. The performance share units have a three-year service-based vesting component, a 50% weighted performance condition based on adjusted ROATCE, and a 50% weighted market condition based on Synovus' relative TSR. The number of performance share units that will ultimately vest ranges from 0% to 150% of a defined target based on Synovus' relative TSR and three-year weighted average ROATCE (as defined). During the years ended December 31, 2019 and 2018, Synovus granted market restricted share units and performance share units to senior management. The market restricted share units have a three-year service-based vesting component as well as a total shareholder return multiplier and the performance share units vest upon meeting certain service and performance conditions. The number of market restricted share units that will ultimately vest ranges from 75% to 125% of a defined target based on Synovus' TSR. Adjusted return on average assets (ROAA), and adjusted return on average tangible common equity (ROATCE), performance is evaluated each year over a three-year performance period, with share distribution determined at the end of the three years. The number of performance share units that will ultimately vest ranges from 0% to 150% of defined targets based on Synovus' three-year weighted average ROAA and ROATCE (as defined). A summary of restricted share units, market restricted share units, and performance share units outstanding and changes during the years ended December 31, 2020, 2019, and 2018 is presented below.
|  | Restricted Share Units |  | Market Restricted Share Units |  | Performance Share Units
(in thousands, except per share data) |  | Quantity |  | Weighted-Average Grant Date Fair Value |  | Quantity |  | Weighted-Average Grant Date Fair Value |  | Quantity |  | Weighted-Average Grant Date Fair Value
Outstanding at December 31, 2017 |  | 566 |  |  | $ | 33.25 |  |  | 171 |  |  | $ | 35.24 |  |  | 245 |  |  | $ | 31.54 |
Granted |  | 249 |  |  | 47.34 |  |  | 58 |  |  | 48.46 |  |  | 86 |  |  | 47.23 |
Dividend equivalents granted |  | 7 |  |  | 44.10 |  |  | 3 |  |  | 41.91 |  |  | 4 |  |  | 28.06 |
Quantity change by TSR factor |  | — |  |  | — |  |  | 18 |  |  | 33.21 |  |  | — |  |  | — |
Vested |  | (280) |  |  | 30.86 |  |  | (105) |  |  | 33.21 |  |  | (84) |  |  | 28.06 |
Adjustment for performance vs. target |  | — |  |  | — |  |  | — |  |  | — |  |  | (1) |  |  | 28.06 |
Forfeited |  | (16) |  |  | 38.60 |  |  | (1) |  |  | 38.32 |  |  | (2) |  |  | 33.52 |
Outstanding at December 31, 2018 |  | 526 |  |  | 41.18 |  |  | 144 |  |  | 41.91 |  |  | 248 |  |  | 38.29 |
Granted |  | 550 |  |  | 36.27 |  |  | 163 |  |  | 37.20 |  |  | 140 |  |  | 37.34 |
Assumed in acquisition |  | 136 |  |  | 31.99 |  |  | — |  |  | — |  |  | — |  |  | — |
Dividend equivalents granted |  | 23 |  |  | 36.27 |  |  | 6 |  |  | 37.20 |  |  | 9 |  |  | 37.34 |
Quantity change by TSR factor |  | — |  |  | — |  |  | (19) |  |  | 37.99 |  |  | — |  |  | — |
Vested |  | (304) |  |  | 37.04 |  |  | (59) |  |  | 37.99 |  |  | (93) |  |  | 26.35 |
Adjustment for performance vs. target |  | — |  |  | — |  |  | — |  |  | — |  |  | 6 |  |  | 37.34 |
Forfeited |  | (114) |  |  | 37.04 |  |  | (19) |  |  | 37.99 |  |  | (31) |  |  | 40.34 |
Outstanding at December 31, 2019 |  | 817 |  |  | 38.32 |  |  | 216 |  |  | 39.99 |  |  | 279 |  |  | 41.52 |
Granted |  | 763 |  |  | 32.42 |  |  | — |  |  | — |  |  | 131 |  |  | 35.75 |
Dividend equivalents granted |  | 59 |  |  | 32.42 |  |  | 9 |  |  | 39.99 |  |  | 23 |  |  | 41.52 |
Quantity change by TSR factor |  | — |  |  | — |  |  | 7 |  |  | 41.00 |  |  | — |  |  | — |
Vested |  | (384) |  |  | 38.04 |  |  | (104) |  |  | 41.00 |  |  | (110) |  |  | 41.61 |
Adjustment for performance vs. target |  | — |  |  | — |  |  | — |  |  | — |  |  | 34 |  |  | 41.61 |
Forfeited |  | (34) |  |  | 35.97 |  |  | (37) |  |  | 38.42 |  |  | (9) |  |  | 41.52 |
Outstanding at December 31, 2020 |  | 1,221 |  |  | $ | 34.50 |  |  | 91 |  |  | $ | 39.54 |  |  | 348 |  |  | $ | 39.33 |
The total fair value of restricted share units vested during 2020, 2019, and 2018 was $13.4 million, $11.2 million, and $13.6 million, respectively. The total fair value of market restricted share units vested during 2020, 2019, and 2018 was $3.9 million, $2.2 million, and $5.1 million, respectively, and the total fair value of performance share units vested during 2020, 2019, and 2018 was $4.0 million, $3.5 million, and $4.3 million, respectively. The following table provides aggregate information regarding grants under all Synovus equity compensation plans at December 31, 2020.
Plan Category(1) |  | (a) Number of Securities to be Issued Upon Vesting of Restricted Share Units, Market Restricted Share Units, and Performance Share Units(2) |  | (b) Number of Securities to be Issued Upon Exercise of Outstanding Options |  | (c) Weighted-Average Exercise Price of Outstanding Options in Column (b) |  | (d) Number of Shares Remaining Available for Issuance Excluding Shares Reflected in Columns (a) and (b)
Shareholder approved equity compensation plans for shares of Synovus stock |  | 1,660 |  | 2,401 |  |  | $ | 22.47 |  |  | 1,522 |
(1) Does not include information for equity compensation plans assumed by Synovus in mergers. A total of 2.0 million shares of common stock was issuable upon exercise of options granted under plans assumed in mergers and outstanding at December 31, 2020. The weighted average exercise price of all options granted under plans assumed in mergers and outstanding at December 31, 2020 was $23.67. Synovus cannot grant additional awards under these assumed plans. (2) Market restricted and performance share units included at defined target levels. Actual shares issued upon vesting may differ based on actual TSR and ROAA and ROATCE (as defined) over the measurement period. Other Employment Benefit Plans For the years ended December 31, 2020, 2019, and 2018, Synovus provided a 100% matching contribution on the first 5% of eligible employee 401(k) contributions for a total annual contribution of $21.3 million, $18.8 million, and $15.7 million, respectively. For the years ended December 31, 2020, 2019, and 2018, Synovus sponsored a stock purchase plan for directors and employees whereby Synovus made contributions equal to 15% of employee and director voluntary contributions, subject to certain maximum contribution limitations. The funds are used to purchase outstanding shares of Synovus common stock. Synovus recorded as expense $1.1 million, $1.1 million, and $942 thousand for contributions to these plans in 2020, 2019, and 2018, respectively.

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