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Share-based compensation plans | 9 Months Ended
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Sep. 30, 2023
Share-Based Payment Arrangement [Abstract] |
Share-based compensation plans | Share-based compensation plans We have share-based compensation plans to attract and retain employees and non-employee directors and to more closely align their interests with those of our shareholders. We have outstanding share-based awards granted to employees under the 2017 Equity Incentive Plan (the "2017 Plan"). The 2017 Plan permits grants of restricted stock, restricted stock units, performance stock, performance units, stock appreciation rights, stock options, as well as other share-based awards to eligible employees. The 2017 Plan also permits cash awards to eligible employees. The 2017 Plan became effective May 2017. During the first quarter ended March 31, 2023, the remaining outstanding awards granted under the 2013 Equity Incentive Plan (the "2013 Plan") were fully exercised. No further grants of awards will be made under the 2013 Plan. We also have outstanding deferred stock units granted to directors under the 2017 Plan. Share-based awards were previously granted to directors and remain outstanding under the Non-Employee Director's Equity Plan and the Directors’ Stock Accumulation Plan, which has expired. Outstanding awards at September 30, 2023 include performance share units, restricted stock units, deferred stock units, performance-based stock options, time-based stock options and certain awards that will be settled in cash. Compensation Expense Compensation expense is measured using the fair-value-based method. Prior to 2020, for employee and director awards considered equity grants, compensation expense is recognized from the award or grant date to the earlier of the retirement-eligible date or the vesting date. In 2020, the retirement eligibility provisions for many employee awards were changed on a go-forward basis to require a six month notification period prior to actual retirement. For the 2020 awards, we recognized expense from the grant date to six months after the participant's retirement eligible date. In 2021, the retirement eligibility provisions were changed to require a minimum of a one year service period in order to meet the retirement eligible conditions. For the 2021, 2022, and 2023 awards, we recognize expense from the grant date to the earlier of the retirement-eligible date (provided it is not less than one year from the grant date) or the vesting date. For awards considered liability awards, compensation cost is based on the change in the fair value of the instrument for each reporting period and the percentage of the requisite service that has been rendered. Compensation expenses are classified as selling, general and administrative expenses in the condensed consolidated statements of operations. Compensation expenses for the share-based awards were as follows:
| Compensation Expense |  | Compensation Expense
| Three Months Ended September 30, |  | Nine Months Ended September 30,
(in millions) | 2023 |  | 2022 |  | 2023 |  | 2022
Performance share units | $ | 3.7 |  |  | 10.5 |  |  | $ | 16.6 |  |  | 26.3 |
Restricted stock units | 2.4 |  |  | 3.3 |  |  | 8.0 |  |  | 8.7 |
Deferred stock units and fees paid in stock | 0.3 |  |  | 0.3 |  |  | 1.0 |  |  | 1.0 |
Time-based vesting stock options | — |  |  | 0.1 |  |  | — |  |  | 0.3 |
Cash based awards | 0.1 |  |  | 0.1 |  |  | 1.6 |  |  | 1.2 |
Share-based payment expense | 6.5 |  |  | 14.3 |  |  | 27.2 |  |  | 37.5 |
Income tax benefit | (1.5) |  |  | (3.4) |  |  | (6.3) |  |  | (8.7) |
Share-based payment expense, net of tax | $ | 5.0 |  |  | 10.9 |  |  | $ | 20.9 |  |  | 28.8 |
Performance-Based Stock Options In 2018, 2017 and 2016, we granted performance-based stock options that have a service condition as well as a market condition. In addition, some of the awards granted in 2016 contained a non-financial performance condition. We measured the fair value of these performance-based options at the grant date using a Monte Carlo simulation model. The following table summarizes performance-based stock option activity during the first nine months of 2023:
| Shares (in thousands) |  | Weighted-Average Grant-Date Fair Value
Outstanding balance as of December 31, 2022 | 446.2 |  |  | $ | 14.70 |
Exercised | (263.4) |  |  | 12.47 |
Outstanding balance as of September 30, 2023 | 182.8 |  |  | $ | 17.92 |
Time-Based Stock Options In 2020 and 2019, we granted time-based stock options that contain only a service condition. We measure the fair value of these time-based options at the grant date using a Black-Scholes-Merton option pricing model. The following table summarizes time-based stock option activity during the first nine months of 2023:
| Shares (in thousands) |  | Weighted-Average Grant-Date Fair Value
Outstanding balance as of December 31, 2022 | 161.6 |  |  | $ | 21.41 |
Expired | — |  |  | — |
Outstanding balance as of September 30, 2023 | 161.6 |  |  | $ | 21.41 |
Restricted Stock Units (“RSUs”) We granted RSUs that contain only a service condition. We measure the fair value of RSUs based on the price of Brink’s stock at the grant date, adjusted for a discount for dividends not received or accrued during the vesting period. The following table summarizes RSU activity during the first nine months of 2023:
| Shares (in thousands) |  | Weighted-Average Grant-Date Fair Value
Nonvested balance as of December 31, 2022 | 309.3 |  |  | $ | 67.25 |
Granted | 194.8 |  |  | 65.76 |
Forfeited | (34.2) |  |  | 64.86 |
Vested | (138.7) |  |  | 68.93 |
Nonvested balance as of September 30, 2023 | 331.2 |  |  | $ | 65.92 |
Performance Share Units ("PSUs”) Historically, we have granted Internal Metric PSUs ("IM PSUs") and Relative Total Shareholder Return PSUs ("TSR PSUs"). The majority of outstanding IM PSUs contain a performance condition as well as a service condition. We measure the fair value of these PSUs based on the price of Brink’s stock at the grant date, adjusted for a discount for dividends not received or accrued during the vesting period. For the IM PSUs granted in 2021, the performance period is from January 1, 2021 to December 31, 2022 with an additional one year of service requirement after 2022. For IM PSUs granted in 2022, the performance period is from January 1, 2022 to December 31, 2024. For IM PSUs granted in 2023, the performance period is from January 1, 2023 to December 31, 2025. In 2023, we also granted IM PSUs to certain employees which contain a market condition, a performance condition, and a service condition. We measure the fair value of IM PSUs containing a market condition at the grant date using a Monte Carlo simulation model. Before 2023, we granted TSR PSUs containing a market condition as well as a service condition. We measure the fair value of TSR PSUs at the grant date using a Monte Carlo simulation model. For the TSR PSUs granted in 2021, the service period is from January 1, 2021 to December 31, 2023. For the TSR PSUs granted in 2022, the service period is from January 1, 2022 to December 31, 2024. The following table summarizes all PSU activity during the first nine months of 2023:
| Shares (in thousands) |  | Weighted-Average Grant-Date Fair Value
Nonvested balance as of December 31, 2022 | 726.0 |  |  | $ | 76.66 |
Granted | 235.4 |  |  | 69.09 |
Forfeited or expired(a) | (80.9) |  |  | 81.55 |
Vested(b) | (171.5) |  |  | 82.75 |
Nonvested balance as of September 30, 2023 | 709.0 |  |  | $ | 72.12 |
(a)Although the service condition had been met, 31.4 thousand TSR PSUs granted in 2020 expired in accordance with the market condition terms of the underlying award agreement. These units had a weighted average grant-date fair value of $94.52 per share. (b)The vested PSUs presented are based on the target amount of the award. In accordance with the terms of the underlying award agreements, the actual shares earned and distributed for the performance period ended December 31, 2022 were 208.1 thousand, compared to target shares of 171.5 thousand. Deferred Stock Units ("DSUs") We granted DSUs to our non-employee directors. We measure the fair value of DSUs at the grant date, based on the price of Brink's stock, and, if applicable, adjusted for a discount for dividends not received or accrued during the vesting period. DSUs granted after 2014 will be paid out in shares of Brink's stock approximately one year after the grant date, provided that the director has not elected to defer the distribution of shares until a later date. DSUs granted prior to 2015, in general, will be paid out in shares of stock following separation from service. The following table summarizes all DSU activity during the first nine months of 2023:
| Shares (in thousands) |  | Weighted-Average Grant-Date Fair Value
Nonvested balance as of December 31, 2022 | 19.7 |  |  | $ | 54.74 |
Granted | 19.2 |  |  | 62.43 |
Vested | (18.6) |  |  | 54.67 |
Nonvested balance as of September 30, 2023 | 20.3 |  |  | $ | 62.09 |

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