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Stock-Based Compensation Plans | 3 Months Ended
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Mar. 31, 2024
Share-Based Payment Arrangement [Abstract] |
Stock-Based Compensation Plans | Stock-Based Compensation Plans We maintain the Flowserve Corporation 2020 Long-Term Incentive Plan (“2020 Plan”), which is a shareholder approved plan authorizing 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. Of the shares of common stock authorized under the 2020 Plan, 7,100,632 were available for issuance as of March 31, 2024. 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"). A s of March 31, 2024, 114,943 stock options with a weighted average exercise price of $48.63 and a weighted average remaining contractual life of 3 years were outstanding and exercisable. No stock options have been granted or vested since 2020. Restricted Shares – Awards of Restricted Shares are valued at the closing market price of our common stock on the date of grant. The unearned compensation is amortized to compensation expense over the vesting period of the restricted shares, except for awards related to the 55/10 Provision which are expensed in the period granted for awards issued prior to 2024. For awards of Restricted Shares granted beginning in 2024 and subject to the 55/10 Provision, compensation expense is recognized over a required six-month service period. We had unearned compensat ion of $39.2 million at March 31, 2024, which is expected to be recognized over a remaining weighted-average period of approximately two years. This amount will be recognized into net earnings in prospective periods as the awards vest. The total fair value of Restricted Shares vested during the three months ended March 31, 2024 and 2023 was $25.7 million and $21.8 million, respectively. We recorded stock-based compensation expense of $8.7 million ($6.7 million after-tax) and $10.0 million ($7.7 million after-tax) for the three months ended March 31, 2024 and 2023, respectively. The following table summarizes information regarding Restricted Shares:
| Three Months Ended March 31, 2024
| Shares |  | Weighted Average Grant-Date Fair Value
Number of unvested shares: |  |  |
Outstanding as of January 1, 2024 | 1,741,486 |  |  | $ | 36.06 |
Granted | 730,434 |  |  | 41.81 |
Vested | (702,095) |  |  | 36.63 |
Forfeited | (34,982) |  |  | 32.76 |
Outstanding as of March 31, 2024 | 1,734,843 |  |  | $ | 38.32 |
Unvested Restricted Shares outstanding as of March 31, 2024 included approximately 512,000 units with performance-based vesting provisions issuable in common stock and vest upon the achievement of pre-defined 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. Performa nce units issued in 2024, 2023 and 2022 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%. Com pensation 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 performance 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 to approximately 1,177,000 shares based on performance targets. As of March 31, 2024, we estimate vesting of approximately 512,000 shares based on expected achievement of performance targets.

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