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Stock-Based Compensation Plans | 12 Months Ended
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Dec. 31, 2023
Share-Based Payment Arrangement [Abstract] |
Stock-Based Compensation Plans | STOCK-BASED COMPENSATION PLANS Effective January 1, 2020, our shareholders approved the Flowserve Corporation 2020 Long-Term Incentive Plan (“2020 Plan”). The 2020 Plan replaces and supersedes the Flowserve Corporation Equity and Incentive Compensation Plan ("2010 Plan") in its entirety. The 2020 Plan authorizes the issuance of 12,500,000 shares of our common stock in the form of restricted shares, restricted share units and performance-based units (collectively referred to as "Restricted Shares"), incentive stock options, non-statutory stock options, stock appreciation rights and bonus stock, in addition to any shares available for issuance or subject to forfeiture under the expired 2010 Plan. Of the shares of common stock authorized under the 2020 Plan and remaining shares under the 2010 Plan, 8,317,411 were available for issuance as of December 31, 2023. Restricted Shares primarily vest over a three year period. Restricted Shares granted to employees who retire and have achieved at least 55 years of age and 10 years of service continue to vest over the original vesting period ("55/10 Provision"). Stock Options — Options granted to officers, other employees and directors allow for the purchase of common shares at the market value of our stock on the date the options are granted. Options generally become exercisable after three years. Options generally expire ten years from the date of the grant or within a short period of time following the termination of employment or cessation of services by an option holder. As of December 31, 2023, 114,943 stock options were outstanding and exercisable, with a grant date fair value of $2.0 million recognized over three years and a weighted average exercise price o f $48.63. Compensation cost associated with these stock options has been fully recognized. Using the Black-Scholes option pricing model to estimate the fair value of each option award, as of December 31, 2023 the total fair value of stock options vested wa s $2.0 million. No stock options were exercised during the years ended December 31, 2023, 2022 or 2021. No stock options were granted, canceled or vested during years ended December 31, 2023, 2022 or 2021. T he weighted average remaining contractual life of options outstanding at December 31, 2023, 2022 and 2021 was 3.3 years, 4.3 years and 5.3 years, respectively.
Restricted Shares — Generally, the restrictions on Restricted Shares do not expire for a minimum of one year and a maximum of three years, and shares are subject to forfeiture during the restriction period. Most typically, Restricted Share grants have staggered vesting periods over one to three years from grant date. The intrinsic value of the Restricted Shares, which is typically the product of share price at the date of grant and the number of Restricted Shares granted, is amortized on a straight-line basis to compensation expense over the periods in which the restrictions lapse. Awards of Restricted Shares are valued at the closing market price of our common stock on the date of grant. The unearned compensation i s amortized to compensation expense over the vesting period of the Restricted Shares, except for awards related to the 55/10 Provision which are expensed when granted. As of December 31, 2023 and 2022, we had $18.5 million and $18.0 million, respectively, of unearned compensation cost related to unvested Restricted Shares, which is expected to be recognized over a weighted-average period of approximately one year. The total fair value of Restricted Shares vested during the years ended December 31, 2023, 2022 and 2021 was $24.2 million, $23.5 million and $25.2 million, respectively. We recorded stock-based compensation for Restricted Shares as follows:
| Year Ended December 31,
| 2023 |  | 2022 |  | 2021
| (Amounts in millions)
Stock-based compensation expense | $ | 27.8 |  |  | $ | 25.5 |  |  | $ | 29.5 |
Related income tax benefit | (6.3) |  |  | (5.8) |  |  | (6.7) |
Net stock-based compensation expense | $ | 21.5 |  |  | $ | 19.7 |  |  | $ | 22.8 |
The following table summarizes information regarding Restricted Shares:
| Year Ended December 31, 2023
| Shares |  | Weighted Average Grant-Date Fair Value
Number of unvested Restricted Shares: |  |  |
Outstanding — beginning of year | 1,697,779 |  |  | $ | 37.17 |
Granted | 936,683 |  |  | 36.72 |
Vested | (645,946) |  |  | 37.48 |
Canceled | (247,030) |  |  | 42.42 |
Outstanding — end of year | 1,741,486 |  |  | $ | 36.06 |
Unvested Restricted Sha res outstanding as of December 31, 2023, includes approximately 473,000 units with performance-based vesting provisions issuable in common stock and vest upon the achievement of predefined performance metrics. Targets for outstanding performance awards are based on our average return on invested capital and free cash flow as a percent of net income over a three-year period. Performance units issued in 2023, 2022 and 2021 include a secondary measure, relative total shareholder return, which can increase or decrease the number of vesting units by 15% depending on the Company's performance versus peers. Performance units issued have a vesting percentage up to 230%. Compensation expense is recognized ratably over a cliff-vesting period of 36 months, based on the fair value of our common stock on the date of grant, adjusted for actual forfeitures. During the perform ance period, earned and unearned compensation expense is adjusted based on changes in the expected achievement of the performance targets for all performance-based units granted. Vesting provisions range fro m 0 t o approximately 1,087,000 shares based on performance targets. As of December 31, 2023, we estimate vesting of approximately 370,000 shares based on expected achievement of performance targets.

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