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Equity Incentive Plans | 12 Months Ended
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Dec. 31, 2024
Share-Based Payment Arrangement, Noncash Expense [Abstract] |
Equity Incentive Plans | Equity Incentive Plans All 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 share units and restricted shares to the Company's executive officers. At December 31, 2024, ther e were 904,048 shares avail able 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, 2023 | 609,228 |  |  | $ | 44.44 |  |  |
Granted | 290,271 |  |  | 41.96 |  |  |
Vested | (284,885) |  |  | 45.47 |  |  |
Outstanding at December 31, 2024 | 614,614 |  |  | $ | 42.79 |  |  | 0.86
The holders of nonvested shares have voting rights and receive dividends from the date of grant. The fair value of the nonvested shares that veste d was $13.7 million, $8.7 million, an d $10.2 million for the years ended December 31, 2024, 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 $6.9 million, $7.6 million and $7.9 million for the years ended December 31, 2024, 2023 and 2022, respectively. Expense related to nonvested shares and included in "Retirement and severance expense" in the accompanying consolidated statements of income and comprehensive income was $0.7 million and $0.4 million for the years ended December 31, 2024 and 2023, respectively. At December 31, 2024, unamortized share-based compensation expense related to nonvested sha res was $9.6 million and w ill be recognized in future periods as follows (in thousands):
| Amount
Year: |
2025 | $ | 5,254 |
2026 | 3,078 |
2027 | 1,246 |
Total | $ | 9,578 |
Nonvested Performance Share Units A summary of the Company's nonvested performance share unit activity and related information is as follows:
| Number of Performance Share Units |  | Weighted avg. grant date fair value (1)
Outstanding at December 31, 2023 | 312,641 |  |  | $ | 70.04 |
Granted | 116,266 |  |  | 44.76 |
Vested (2) | (102,438) |  |  | 75.14 |
Outstanding at December 31, 2024 | 326,469 |  |  | $ | 59.44 |
(1) The grant date fair value was determined utilizing (i) a Monte Carlo simulation model to generate an estimate of the Company's future stock price over the three-year performance period for performance share units based on the Company's Total Shareholder Return (TSR) performance further described below and (ii) the Company's grant date fair value for performance share units based on the Company's Compounded Annual Growth Rate (CAGR) in AFFO per share over the three-year performance period. (2) The achievement of the performance conditions for the performance share units granted during the year ended December 31, 2021 resulted in a performance payout percentage of 250% for both the Company's TSR relative to the TSRs of the Company's peer group companies and the Company's TSR relative to the TSRs of companies in the MSCI US REIT Index and a payout percentage of 200% for the Company's CAGR in AFFO per share over the three-year performance period. The achievement of the performance conditions and the above payout percentages resulted in the issuance of 243,290 common shares and 49,574 common shares from dividend equivalents. The fair value of the performance share units and dividend equivalents that vested was $12.6 million. The number of common shares issuable upon settlement of the performance share units granted during the years ended December 31, 2024, 2023 and 2022 will be based upon the Company's achievement level relative to the following performance measures over a three-year performance period ending December 31, 2026, 2025 and 2024, respectively. The Company's achievement level relative to the performance measures is assigned a specific payout percentage which is multiplied by the target number of performance share units.
Granted during the years ended December 31, | TSR vs. Triple-Net Peer Group | TSR vs. MSCI US REIT Index | CAGR in AFFO per share growth
2022 | 50.0 | % | 25.0 | % | 25.0 | %
2023 | 50.0 | % | 25.0 | % | 25.0 | %
2024 | 52.2 | % | 26.1 | % | 21.7 | %
The performance share units 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 $4.1 million, $5.9 million and $6.0 million for the years ended December 31, 2024, 2023 and 2022, respectively. The estimated fair value is amortized to expense over the three-year vesting period, which ends on December 31, 2026, 2025 and 2024 for performance share units granted in 2024, 2023 and 2022, respectively. The following assumptions were used in the Monte Carlo simulation for computing the grant date fair value of the performance share units with a market condition for the years ended December 31, 2024, 2023 and 2022, respectively: risk-free interest rate of 4.5%, 4.4% and 1.7%, volatility factors in the expected market price of the Company's common shares of 30%, 52% and 71% and an expected life of approximately three years. The performance share units 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 shares 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 and any compensation cost previously recorded will be reversed. At December 31, 2024, achievement of the performance condition was deemed probable for the performance share units granted during the year ended December 31, 2022 with an expected payout percentage of 200%, which resulted in a grant date fair value of approximately $2.3 million. Achievement of the performance condition for the performance share units granted during the years ended December 31, 2024 and 2023 was deemed not probable at December 31, 2024. Expense recognized related to performance share units and included in "General and administrative expense" in the accompanying consolidated statements of income and comprehensive income was $5.4 million, $7.9 million and $6.6 million for the years ended December 31, 2024, 2023 and 2022, respectively. Expense related to performance share units and included in "Retirement and severance expense" in the accompanying consolidated statements of income and comprehensive income was $0.9 million for the year ended December 31, 2024. At December 31, 2024, unamortized share-based compensation expense related to nonvested performance sha re units was $4.3 million and w ill be recognized in future periods as follows (in thousands):
| Amount
Year: |
2025 | $ | 2,978 |
2026 | 1,350 |
Total | $ | 4,328 |
The performance share units accrue dividend equivalents, that are paid only if common shares are issued upon settlement of the performance share units. During the years ended December 31, 2024 and 2023, the Company accrued dividend equivalents expected to be paid on earned awards of $3.5 million and $3.8 million, respectively. During the year ended December 31, 2024, the Company paid dividend equivalents of $3.8 million related to the issuance of the performance share units granted during the year ended December 31, 2021. No dividend equivalents were paid for the year ended December 31, 2023 as the performance conditions for the performance share units granted during the year ended December 31, 2020 were not achieved. Restricted Share Units A summary of the Company’s restricted share unit activity and related information is as follows:
| Number of Shares |  | Weighted Average Grant Date Fair Value |  | Weighted Average Life Remaining
Outstanding at December 31, 2023 | 42,048 |  |  | $ | 41.67 |  |  |
Granted | 45,410 |  |  | 40.69 |  |  |
Vested | (42,048) |  |  | 41.67 |  |  |
Outstanding at December 31, 2024 | 45,410 |  |  | $ | 40.69 |  |  | 0.42
The holders of restricted share units receive dividend equivalents from the date of grant. Total expense recognized related to shares issued to non-associate Trustees and included in "General and administrative expense" in the accompanying consolidated statements of income and comprehensive income was $1.8 million, $1.9 million and $2.2 million for the years ended December 31, 2024, 2023 and 2022, respectively. At December 31, 2024, unamortized share-based compensation expense related to restricted share units was $794 thousand, which will be recognized in 2025.

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