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Equity Incentive Plans | 6 Months Ended
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Jun. 30, 2023
Share-Based Payment Arrangement, Noncash Expense [Abstract] |
Equity Incentive Plans | Equity Incentive PlansAll grants of common shares and options to purchase common shares were issued under the Company's 2007 Equity Incentive Plan prior to May 12, 2016 and under the 2016 Equity Incentive Plan on and after May 12, 2016. Under the 2016 Equity Incentive Plan, an aggregate of 3,950,000 common shares, options to purchase common shares and restricted share units, subject to adjustment in the event of certain capital events, may be granted. Additionally, the 2020 Long Term Incentive Plan (2020 LTIP) is a sub-plan under the Company's 2016 Equity Incentive Plan. Under the 2020 LTIP, the Company awards performance shares and restricted shares to the Company's executive officers. At June 30, 2023, there we re 1,490,224 shares available for grant under the 2016 Equity Incentive Plan. Nonvested Shares A summary of the Company’s nonvested share activity and related information is as follows:
| Number of shares |  | Weighted avg. grant date fair value |  | Weighted avg. life remaining
Outstanding at December 31, 2022 | 503,912 |  |  | $ | 50.38 |  |  |
Granted | 352,090 |  |  | 42.23 |  |  |
Vested | (228,102) |  |  | 54.10 |  |  |
Forfeited | (13,809) |  |  | 45.20 |  |  |
Outstanding at June 30, 2023 | 614,091 |  |  | $ | 44.44 |  |  | 1.40
The holders of nonvested shares have voting rights and receive dividends from the date of grant. The fair value of the nonvested shares that vested was $8.6 million and $10.2 million for the six months ended June 30, 2023 and 2022, respectively. Expense recognized related to nonvested shares and included in "General and administrative expense" in the accompanying consolidated statements of income and comprehensive income was $3.8 million and $3.9 million for the six months ended June 30, 2023 and 2022, respectively. Expense related to nonvested shares and included in severance expense in the accompanying consolidated statements of income and comprehensive income was $0.3 million for the six months ended June 30, 2023. There was no expense related to nonvested shares included in severance expense for the six months ended June 30, 2022. At June 30, 2023, unamortized share-based compensation expense related to nonvested shares was $14.3 million. Nonvested Performance Shares A summary of the Company's nonvested performance share activity and related information is as follows:
| Target Number of Performance Shares
Outstanding at December 31, 2022 | 257,386 |
Granted | 111,593 |
Vested (1) | (56,338) |
Forfeited | — |
Outstanding at June 30, 2023 | 312,641 |
(1) The performance conditions for the performance shares granted during the year ended December 31, 2020 were not achieved resulting in no pay-out. The number of common shares issuable upon settlement of the performance shares granted during the six months ended June 30, 2023, 2022 and 2021 will be based upon the Company's achievement level relative to the following performance measures at December 31, 2025, 2024 and 2023, respectively: 50% based upon the Company's Total Shareholder Return (TSR) relative to the TSRs of the Company's peer group companies, 25% based upon the Company's TSR relative to the TSRs of companies in the MSCI US REIT Index and 25% based upon the Company's Compounded Annual Growth Rate (CAGR) in AFFO per s hare over the three-year performance period. The Company's achievement level relative to the performance measures is assigned a specific payout percentage which is multiplied by a target number of performance shares. The performance shares based on relative TSR performance have market conditions and are valued using a Monte Carlo simulation model on the grant date, which resulted in a grant date fair value of approximately $5.9 million and $6.0 million for the six months ended June 30, 2023 and 2022, respectively. The estimated fair value is amortized to expense over the three-year performance periods, which end on December 31, 2025, 2024 and 2023 for performance shares granted in 2023, 2022 and 2021, respectively. The following assumptions were used in the Monte Carlo simulation for computing the grant date fair value of the performance shares with a market condition for the six months ended June 30, 2023: risk-free interest rate of 4.4%, volatility factors in the expected market price of the Company's common shares of 52% and an expected life of approximately three years. The performance shares based on growth in AFFO per share have a performance condition. The probability of achieving the performance condition is assessed at each reporting period. If it is deemed probable that the performance condition will be met, compensation cost will be recognized based on the closing price per share of the Company's common stock on the date of the grant multiplied by the number of awards expected to be earned. If it is deemed that it is not probable that the performance condition will be met, the Company will discontinue the recognition of compensation cost a nd any compensation cost previously recorded will be reversed. At June 30, 2023, achievement of the performance condition was deemed probable for the performance shares granted during the six months ended June 30, 2023, 2022 and 2021 with an expected payout percentage of 100%, 200% and 200%, respectively, which resulted in a grant date fair value of approximately $1.2 million, $2.3 million and $2.3 million, respectively. Expense recognized related to performance shares and included in "General and administrative expense" in the accompanying consolidated statements of income and comprehensive income was $4.0 million and $3.3 million for the six months ended June 30, 2023 and 2022, respectively. At June 30, 2023, unamortized share-based compensation expense related to nonvested performance shares was $11.5 million. The performance shares accrue dividend equivalents which are paid only if common shares are issued upon settlement of the performance shares. During the six months ended June 30, 2023 and 2022, the Company accrued dividend equivalents expected to be paid on earned awards of $803 thousand and $324 thousand, respectively. Restricted Share Units A summary of the Company’s restricted share unit activity and related information is as follows:
| Number of shares |  | Weighted avg. grant date fair value |  | Weighted avg. life remaining
Outstanding at December 31, 2022 | 38,605 |  |  | $ | 50.77 |  |  |
Granted | 43,497 |  |  | 41.67 |  |  |
Vested | (40,054) |  |  | 50.44 |  |  |
Outstanding at June 30, 2023 | 42,048 |  |  | $ | 41.67 |  |  | 0.92
The holders of restricted share units receive dividend equivalents from the date of grant. Total expense recognized related to shares issued to non-employee Trustees and included in "General and administrative expense" in the accompanying consolidated statements of income and comprehensive inc ome was $1.0 million and $1.2 million for the six months ended June 30, 2023 and 2022, respectively. At June 30, 2023, unamortized share-based compensation expense related to restricte d share units was $1.6 million.

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