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SHARE-BASED PAYMENTS (Notes) | 12 Months Ended
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Dec. 31, 2018
Share-based Payments [Line Items] |
Disclosure of Compensation Related Costs, Share-based Payments |
11. | SHARE-BASED PAYMENTS
The ECP provides for the granting of stock-based compensation, including incentive stock options, nonstatutory stock options, stock bonus awards, restricted stock awards, restricted stock unit awards, performance stock awards and performance unit awards to eligible employees and the granting of stock awards to nonemployee directors. At December 31, 2018, we have 4.3 million shares of common stock reserved for issuance under the ECP. In May 2018, shareholders approved making an additional 1.8 million shares available under the ECP, less the number of shares remaining available for future grants on the effective date. At December 31, 2018, we had approximately 2.1 million shares available for issuance under the ECP, which reflect shares issued and estimated shares expected to be issued upon vesting of outstanding awards granted under the plan, less forfeitures. The plan allows for the deferral of awards granted in stock or cash, in accordance with Internal Revenue Code section 409A requirements. Compensation cost expensed for our share-based payment plans was $6.1 million, net of tax benefits of $2.1 million, for 2018, $4.9 million, net of tax benefits of $3.0 million, for 2017, and $7.0 million, net of tax benefits of $4.3 million, for 2016. Restricted Stock Unit Awards - We have granted restricted stock unit awards to key employees that vest over a service period of generally three years and entitle the grantee to receive shares of our common stock. Restricted stock unit awards granted accrue dividend equivalents in the form of additional restricted stock units prior to vesting. Restricted stock unit awards are measured at fair value as if they were vested and issued on the grant date, reduced by expected dividend payments for awards that do not accrue dividends and adjusted for estimated forfeitures. Compensation expense is recognized on a straight-line basis over the vesting period of the award. A forfeiture rate of 3 percent per year based on historical forfeitures under our share-based payment plans is used. Performance Stock Unit Awards - We have granted performance stock unit awards to key employees. The shares of common stock underlying the performance stock units vest at the expiration of a service period of generally three years if certain performance criteria are met by us as determined by the Executive Compensation Committee of the Board of Directors. Upon vesting, a holder of performance stock units is entitled to receive a number of shares of common stock equal to a percentage (0 percent to 200 percent) of the performance stock units granted, based on our total shareholder return over the vesting period, compared with the total shareholder return of a peer group of other utilities over the same period. If paid, the outstanding performance stock unit awards entitle the grantee to receive shares of our common stock. The outstanding performance stock unit awards are equity awards with a market-based condition, which results in the compensation expense for these awards being recognized on a straight-line basis over the requisite service period, provided that the requisite service period is fulfilled, regardless of when, if ever, the market condition is satisfied. The performance stock unit awards granted accrue dividend equivalents in the form of additional performance stock units prior to vesting. The fair value of these performance stock units was estimated on the grant date based on a Monte Carlo model. The compensation expense on these awards will only be adjusted for changes in forfeitures. A forfeiture rate of 3 percent per year based on historical forfeitures under our share-based payment plans was used. Restricted Stock Unit Award Activity As of December 31, 2018, there was $2.6 million of total unrecognized compensation costs related to the nonvested restricted stock unit awards, which is expected to be recognized over a weighted-average period of 1.7 years. The following tables set forth activity and various statistics for restricted stock unit awards outstanding under the respective plans for the period indicated:
|  | Number of Units |  | Weighted- Average Price
Nonvested at December 31, 2017 |  | 140,665 |  |  | $ | 51.97 |
Granted |  | 37,893 |  |  | $ | 68.17 |
Vested |  | (66,543 | ) |  | $ | 41.92 |
Forfeited |  | (2,509 | ) |  | $ | 62.44 |
Nonvested at December 31, 2018 |  | 109,506 |  |  | $ | 63.45 |
|  | 2018 |  | 2017 |  | 2016
Weighted-average grant date fair value (per share) |  | $ | 68.17 |  |  | $ | 63.97 |  |  | $ | 58.30 |
Fair value of shares granted (thousands of dollars) |  | $ | 2,583 |  |  | $ | 2,420 |  |  | $ | 2,503 |
The fair value of restricted stock vested was $4.7 million and $5.5 million in 2018 and 2017, respectively. Performance Stock Unit Award Activity As of December 31, 2018, there was $5.8 million of total unrecognized compensation cost related to the nonvested performance stock unit awards, which is expected to be recognized over a weighted-average period of 1.8 years. The following tables set forth activity and various statistics related to our performance stock unit awards and the assumptions used by us in the valuations of the 2018, 2017 and 2016 grants at the grant date:
|  | Number of Units |  | Weighted- Average Price
Nonvested at December 31, 2017 |  | 237,324 |  |  | $ | 57.78 |
Granted |  | 79,447 |  |  | $ | 74.04 |
Vested |  | (93,976 | ) |  | $ | 44.48 |
Forfeited |  | (3,464 | ) |  | $ | 67.97 |
Nonvested at December 31, 2018 |  | 219,331 |  |  | $ | 69.21 |
|  | 2018 |  | 2017 |  | 2016 |
Volatility (a) |  | 18.80% |  | 20.70% |  | 18.20% |
Dividend yield |  | 2.70% |  | 2.63% |  | 2.40% |
Risk-free interest rate |  | 2.38% |  | 1.48% |  | 0.91% |
(a) - Volatility based on historical volatility over three years using daily stock price observations of our peer utilities. |
|  | 2018 |  | 2017 |  | 2016
Weighted-average grant date fair value (per share) |  | $ | 74.04 |  |  | $ | 68.94 |  |  | $ | 64.06 |
Fair value of shares granted (thousands of dollars) |  | $ | 5,882 |  |  | $ | 5,110 |  |  | $ | 4,766 |
The fair value of performance stock vested was $13.7 million and $15.6 million in 2018 and 2017, respectively. Employee Stock Purchase Plan We have reserved a total of 700 thousand shares of common stock for issuance under our ESPP. Subject to certain exclusions, all employees who work more than 20 hours per week are eligible to participate in the ESPP. Employees can choose to have up to 10 percent of their annual base pay withheld to purchase our common stock, subject to terms and limitations of the plan. The purchase price of the stock is 85 percent of the lower of the average market price of our common stock on the grant date or exercise date. Approximately 45 percent, 43 percent and 41 percent of employees participated in the plan in 2018, 2017 and 2016, respectively, and purchased 76,231 shares at $63.01 in 2018, 78,472 shares at $56.80 in 2017, and 83,431 shares at $54.51 in 2016. Compensation expense, before taxes, was $1.0 million, $1.2 million and $1.4 million in 2018, 2017 and 2016, respectively. Employee Stock Award Program Under the Employee Stock Award Program, we issued, for no monetary consideration, one share of our common stock to all eligible employees when the per-share closing price of our common stock on the NYSE closed for the first time at or above each $1.00 increment above $34. The total number of shares of our common stock authorized for issuance under this program was 125,000. Shares issued to employees under this program during 2017 and 2016 totaled 13,791 and 50,573, respectively. Compensation expense, before taxes, related to the Employee Stock Award Program was $0.9 million and $3.0 million for 2017 and 2016, respectively. The Employee Stock Award Program was discontinued in May 2017.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -URI http://asc.fasb.org/subtopic&trid=2208855 + Details
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