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Share-Based Compensation | 12 Months Ended
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Dec. 31, 2024
Share-Based Payment Arrangement [Abstract] |
Share-Based Compensation | Share-Based Compensation In February 2015, the Company adopted the 2015 Incentive Award Plan (the "2015 Plan"), replacing the 2005 Equity Incentive Plan (the "2005 Plan") which expired in January 2015. The 2015 Plan was approved at the Company's Annual Meeting of Shareholders in May 2015 and expired in January 2025. A maximum of 4,900,000 shares of common stock were authorized for issuance under the 2015 Plan upon exercise of stock options, stock appreciation rights and other awards, or upon vesting of restricted stock unit or deferred stock awards. No share-based compensation awards have been granted since March 2018 under the 2015 Plan. In February 2024, the Board adopted the 2024 Long-Term Incentive Plan (the “LTIP”) to provide certain key employees with the right to receive cash awards providing an opportunity to participate in the appreciation of the Company’s value and in order to retain these key employees and reward them for contributing to the success of the Company. Participants in the LTIP may be granted a number of notional interests, or phantom stock units ("PSUs"). Each PSU represents the right to receive payment of the value of a share of the Company’s common stock upon vesting. PSUs may be granted subject to vesting conditions, which may include service-based and/or performance-based vesting conditions tied to corporate and/or individual achievement objectives. An employee must remain employed through the date of payment of an award to be eligible for any payout under the LTIP. These PSUs are settled in cash upon vesting and accounted for as liability-based awards. The following table presents a summary of cash received, compensation costs recognized and excess tax benefit, related to the Company's share-based awards:
|  | Year Ended December 31,
|  | 2024 |  | 2023 |  | 2022
|  | (Amounts in thousands)
Cash received from stock option exercises |  | $ | 752 |  |  | $ | — |  |  | $ | — |
Compensation cost, all share-based awards |  | 4,648 |  |  | — |  |  | 15 |
Excess tax benefit, all share-based awards |  | (87) |  |  | — |  |  | (1) |
Stock Option Awards The Company's stock option awards become exercisable at a rate of 25% per year beginning one year from the date granted, are granted at the closing price of the Company's stock on the date of grant, and expire after 10 years. In February 2018, the Compensation Committee of the Company's Board of Directors awarded a total of 80,000 stock options to four senior executives under the 2015 Plan, which vested over the four-year requisite service period, except for 10,000 of these stock options that were forfeited in February 2019 following the departure of a senior executive. The fair values of these stock options were estimated on the date of grant using a closed-form option valuation model (Black-Scholes). The following table provides the assumptions used in the calculation of grant-date fair values of these stock options based on the Black-Scholes option pricing model:
Weighted-average grant-date fair value | $ | 8.09 |
Expected volatility | 33.18 | %
Risk-free interest rate | 2.62 | %
Expected dividend yield | 5.40 | %
Expected term in months | 72
Expected volatility is based on historical volatility of the Company’s stock over the term of the stock options. The Company estimated the expected term of stock options, which represents the period of time that stock options granted are expected to be outstanding, by using historical exercise patterns and post-vesting termination behavior. The risk free interest rate is determined based on U.S. Treasury yields with equivalent remaining terms in effect at the time of the grant. The following table presents a summary of the stock option activity for the year ended December 31, 2024:
| Shares |  | Weighted-Average Exercise Price
Outstanding at January 1, 2024 | 17,500 |  | $ | 43.01 |
Exercised | (17,500) |  |  | $ | 43.01 |
Canceled or expired | — |  |  | $ | — |
Outstanding at December 31, 2024 | — |  | $ | — |
Exercisable at December 31, 2024 | — |  | $ | — |
The aggregate intrinsic value of stock options exercised (the difference between the Company’s closing stock price and the stock option exercise price, multiplied by the number of in-the-money stock options) was $557,910 and $29,975 for 2024 and 2022, respectively. There were no stock options exercised in 2023. The total fair value of stock options vested was $141,584 for 2022. There were no stock options vested in 2024 and 2023. Performance-based PSUs During the year ended December 31, 2024, the Company granted a total "target" award of 200,532 performance-based PSUs to certain executive officers and other key employees of the Company, 3,016 of which were forfeited because the recipients were no longer employed by the Company. The payout value of the performance-based PSUs granted under the LTIP will be determined based on the achievement of specific, pre-established corporate performance objectives, and in part on individual performance, during the applicable three-year performance period (the "Performance Cycle"). The maximum payout level for the performance-based PSUs is 150% of the “target” award. These performance-based PSUs vest at the end of the Performance Cycle beginning with the year of the grant, and then only if, and to the extent that, the Company’s performance during the Performance Cycle achieves the threshold established by the Compensation Committee of the Board. Each annual performance result is determined based on the average of the Company’s annual market share growth and its annual combined ratio. The vested number of performance-based PSUs for each grantee is based on the average of the Company's three annual performance results combined with the individual's performance during the Performance Cycle. The cash payout amount for each unit of the vested performance-based PSUs is equal to the average closing price per share of the Company’s common stock for the 30 calendar days preceding the determination of the final number of vested PSUs for each grantee at the end of the Performance Cycle. Liabilities for the expected cash payout and associated compensation expenses are recognized based on management’s best estimate of the number of the performance-based PSUs expected to be vested resulting from the probable outcome of the performance-based vesting conditions, combined with the market price of the Company's common stock at the end of each reporting period. If the performance-based vesting conditions are not expected to be met for the Performance Cycle, no compensation cost will be recognized and any recognized compensation cost will be reversed. The following table presents the summary of the performance-based PSU grants as of December 31, 2024:
Grant year | 2024
Three-year performance period ending December 31, | 2026
Vesting shares, target (net of forfeited) | 197,516
Vesting shares, maximum (net of forfeited) | 296,274
The following table presents a summary of performance-based PSU awards activity, based on target vesting, during 2024:
|  | Shares |  | Weighted- Average Fair Value per Share |
Outstanding at January 1 |  | — |  | $ | — |  |
Granted |  | 200,532 |  |  | $ | 39.12 |  |
Vested |  | — |  |  | $ | — |  |
Forfeited/Canceled |  | (3,016) |  |  | $ | 59.80 |  |
Expired |  | — |  |  | $ | — |  |
Outstanding at December 31 |  | 197,516 |  | $ | 66.48 |  |
Restricted PSUs The Company, from time to time, grants restricted PSUs to certain key employees, typically to retain such key employees. The restricted PSUs vest in three equal annual installments on each of the first three anniversaries of the grant date. The payout value of the restricted PSUs granted under the LTIP will be determined based on the closing price per share of the Company's common stock at each vesting date. The vested amount of the restricted PSUs is paid at the end of each annual vesting period. During the year ended December 31, 2024, the Company granted a total of 36,315 restricted PSUs to certain key employees of the Company, 726 of which were forfeited because the recipients were no longer employed by the Company. The following table presents a summary of restricted PSU awards activity during 2024:
|  | Shares |  | Weighted- Average Fair Value per Share |
Outstanding at January 1 |  | — |  | $ | — |  |
Granted |  | 36,315 |  |  | $ | 61.67 |  |
Vested |  | — |  |  | $ | — |  |
Forfeited/Canceled |  | (726) |  |  | $ | 62.98 |  |
Expired |  | — |  |  | $ | — |  |
Outstanding at December 31 |  | 35,589 |  | $ | 66.48 |  |
The Company recorded approximately $4.6 million of share-based compensation expense associated with the performance-based and restricted PSUs for the year ended December 31, 2024, which are included in other operating expenses in its consolidated statements of operations.

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