Equity Incentive Plans

9 Months Ended

Sep. 30, 2021

Share-based Payment Arrangement [Abstract]

Under the Acushnet Holdings Corp. 2015 Omnibus Incentive Plan (“2015 Plan”), the Company may grant stock options, stock appreciation rights, restricted shares of common stock, restricted stock units ("RSUs"), performance stock units ("PSUs") and other share-based and cash-based awards to members of the Board of Directors, officers, employees, consultants and advisors of the Company. As of September 30, 2021, the only awards granted under the 2015 Plan were RSUs and PSUs.

Restricted Stock and Performance Stock Units

RSUs granted to members of the Board of Directors vest immediately into shares of common stock. RSUs granted to Company officers generally vest over three years, with one-third of each grant vesting annually, subject to the recipient's continued employment with the Company. RSUs granted to other employees, consultants and advisors of the Company vest in accordance with the terms of the grants, generally over three years, subject to the recipient’s continued service to the Company. PSUs vest, subject to the recipient's continued employment with the Company, based upon the Company's performance against specified metrics which are generally over a three year performance period. At the end of the performance period, the number of shares of common stock that could be issued is determined based upon the Company's performance against these metrics. The number of shares that could be issued can range from 0% to 200% of the recipient's target award. Recipients of the awards granted under the 2015 Plan may elect to defer receipt of all or any portion of any shares of common stock issuable upon vesting to a future date elected by the recipient.

All RSUs and PSUs granted under the 2015 Plan have DERs, which entitle holders of RSUs and PSUs to the same dividend value per share as holders of common stock and can be paid in either cash or common stock. DERs are subject to the same vesting and other terms and conditions as the corresponding unvested RSUs and PSUs. DERs are paid when the underlying shares of common stock are delivered.

A summary of the Company’s RSUs and PSUs as of September 30, 2021 and changes during the nine months then ended is presented below:


		Weighted-			Weighted-
	Number	Average		Number	Average
	of RSUs	Fair Value RSUs		of PSUs	Fair Value PSUs
Outstanding as of December 31, 2020	1,253,173	$	24.33	457,576	$	24.55
Granted	312,807	45.77		145,882	45.36
Vested (1)	(380,097)	25.39		—	—
Forfeited	(61,002)	27.03		(47,210)	28.74
Outstanding as of September 30, 2021	1,124,881	$	29.79	556,248	$	29.65

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(1) Includes 120,178 shares of common stock related to RSUs and no shares of common stock related to PSUs that were not delivered as of September 30, 2021.

A summary of shares of common stock issued related to the 2015 Plan, including the impact of any DERs issued in common stock, is presented below:


	Nine months ended		Nine months ended
	September 30, 2021		September 30, 2020
	RSUs	PSUs	RSUs	PSUs
Shares of common stock issued	278,607	—	62,855	789
Shares of common stock withheld by the Company as payment by employees in lieu of cash to satisfy tax withholding obligations	(89,938)	—	(16,972)	(269)
Net shares of common stock issued	188,669	—	45,883	520

Cumulative undelivered shares of common stock	405,334	—	252,601	—

Compensation expense recorded related to RSUs and PSUs in the unaudited condensed consolidated statements of operations was as follows:


	Three months ended				Nine months ended
	September 30,				September 30,
(in thousands)	2021		2020		2021		2020
RSUs	$	2,843	$	2,876	$	9,153	$	9,141
PSUs	4,009		634		11,178		444

During the nine months ended September 30, 2020, the Company adjusted the estimate of its performance against metrics for certain PSUs downward, resulting in a reversal of previously recognized share-based compensation expense. During the three and nine months ended September 30, 2021, based on updated forecast information, the Company increased the estimate of its performance against metrics for these PSUs and recognized additional cumulative share-based compensation expense in both periods.

The remaining unrecognized compensation expense related to unvested RSUs and unvested PSUs was $16.7 million and $15.8 million, respectively, as of September 30, 2021 and are expected to be recognized over the related weighted average period of 1.9 years and 2.0 years, respectively.

Compensation Expense

The allocation of share-based compensation expense in the unaudited condensed consolidated statements of operations was as follows:


	Three months ended				Nine months ended
	September 30,				September 30,
(in thousands)	2021		2020		2021		2020
Cost of goods sold	$	315	$	357	$	567	$	985
Selling, general and administrative	6,299		3,090		19,207		8,379
Research and development	398		227		1,048		713
Total compensation expense before income tax	7,012		3,674		20,822		10,077
Income tax benefit	1,610		811		4,722		2,123
Total compensation expense, net of income tax	$	5,402	$	2,863	$	16,100	$	7,954