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Equity-Based Compensation | 3 Months Ended
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Mar. 31, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] |
Equity-Based Compensation | Equity-Based Compensation Restricted stock awa rds. The Company has granted restricted stock awards to employees and directors under its Amended and Restated 2010 Long Term Incentive Plan, the majority of which vest over a three-year period. The fair value of restricted stock awards is based on the closing sales price of the Company’s common stock on the date of grant. Compensation expense is recognized ratably over the requisite service period. During the three months ended March 31, 2018, employees and non-employee directors of the Company were granted restricted stock awards equal to 2,865,780 shares of common stock with a $9.58 weighted average grant date per share value. Equity-based compensation expense recorded for restricted stock awards for the three months ended March 31, 2018 was $4.8 million and $5.4 million for the three months ended March 31, 2017. Equity-based compensation expense is included in general and administrative expenses on the Company’s Condensed Consolidated Statements of Operations. Performance share units. The Company has granted performance share units (“PSUs”) to officers of the Company under its Amended and Restated 2010 Long Term Incentive Plan. The PSUs are awards of restricted stock units, and each PSU that is earned represents the right to receive one share of the Company’s common stock. The Company accounts for PSUs as equity awards pursuant to the FASB’s authoritative guidance for share-based payments. The number of PSUs to be earned is subject to a market condition, which is based on a comparison of the total shareholder return (“TSR”) achieved with respect to shares of the Company’s common stock against the TSR achieved by a defined peer group at the end of the performance periods. Depending on the Company’s TSR performance relative to the defined peer group, award recipients will earn between 0% and 200% of the initial PSUs granted. All compensation expense related to the PSUs will be recognized if the requisite performance period is fulfilled, even if the market condition is not achieved. The aggregate grant date fair value of the market-based awards was determined using a Monte Carlo simulation model. The Monte Carlo simulation model uses assumptions regarding random projections and must be repeated numerous times to achieve a probabilistic assessment. The key valuation assumptions for the Monte Carlo model are the forecast period, initial value, stock price on the date of grant, risk-free interest rate, volatility and correlation coefficients. The risk-free interest rates are the U.S. Treasury bond rates on the date of grant that correspond to each performance period. The initial value is the average of the volume weighted average prices for the 30 trading days prior to the start of the performance cycle for the Company and each of its peers. Volatility was calculated from the daily historical returns of stock prices over a historical period for the Company and each of its peers. The correlation coefficients are measures of the strength of the linear relationship between and amongst the Company and its peers estimated based on historical stock price data. The following assumptions were used for the Monte Carlo model to determine the grant date fair value and associated equity-based compensation expense of the PSUs granted during the three months ended March 31, 2018:
Risk-free interest rate | 2.08% - 2.31% |
Oasis volatility | 72.88 | %
Oasis initial value | $8.82
Oasis stock price on date of grant | $9.27
During the three months ended March 31, 2018, officers of the Company were granted 854,400 PSUs with a $12.71 weighted average grant date per share value. Equity-based compensation expense recorded for PSUs for the three months ended March 31, 2018 was $1.9 million and $1.3 million for the three months ended March 31, 2017. Equity-based compensation expense is included in general and administrative expenses on the Company’s Condensed Consolidated Statements of Operations. OMP phantom unit awards. In September 2017, OMP GP adopted the Oasis Midstream Partners LP 2017 Long Term Incentive Plan (“OMP LTIP”). The OMP LTIP provides for the grant, from time to time at the discretion of the board of directors of OMP GP, of options, unit appreciation rights, restricted units, phantom units, unit awards, substitute awards, other unit-based awards or cash awards and includes any tandem distribution equivalent rights with respect to certain awards. Each award of phantom unit vests in equal amounts each year over a three-year period, and compensation expense will be recognized over the requisite service period. The Phantom Units are accounted for as liability-classified awards since the awards will settle in cash, and equity-based compensation cost is accounted for under the fair value method in accordance with GAAP. Under the fair value method for liability-classified awards, compensation cost is remeasured each reporting period at fair value based upon the closing price of a publicly traded common unit. The Company will reimburse OMP for the cash settlement amount of these awards, which is included in general and administrative expenses on the Company’s Condensed Consolidated Statements of Operations. Equity-based compensation expense relating to the OMP phantom unit awards for the three months ended March 31, 2018 was $0.1 million. The Company did not record any equity-based compensation related to the OMP phantom unit awards for the three months ended March 31, 2017 because the awards were granted in the fourth quarter of 2017. OMP restricted unit awards. During the three months ended March 31, 2018, certain directors of OMP were granted 12,200 restricted unit awards which vest over a one-year period with a weighted average grant date fair value of $16.50 per common unit. These a wards are accounted for as equity-classified awards since the awards will settle in common units upon vesting. Equity-based compensation cost is accounted for under the fair value method in accordance with GAAP. Under the fair value method for equity-classified awards, compensation cost is measured at the grant date based on the fair value of the award and is recognized over the vesting period. Compensation cost associated with these awards was approximately $0.1 million for the three months ended March 31, 2018 and is included in general and administrative expenses on the Company’s Condensed Consolidated Statements of Operations.

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- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -URI http://asc.fasb.org/subtopic&trid=2208855 + Details
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