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STOCK-BASED COMPENSATION | 12 Months Ended
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Dec. 31, 2021
Share-based Payment Arrangement [Abstract] |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION The Company grants awards of PBF Energy Class A common stock and PBFX phantom units under its equity incentive plans which authorize the granting of various stock and stock-related awards to directors, employees, prospective employees and non-employees. Awards include non-qualified or incentive stock options, stock appreciation rights, stock awards (including restricted stock) and phantom unit awards, cash awards and performance awards that vest over a period determined by the plans. Stock-based compensation expense included in general and administrative expenses consisted of the following:
|  | Years Ended December 31,
(in millions) |  | 2021 |  | 2020 |  | 2019
PBF Energy options |  | $ | 17.3 |  |  | $ | 16.1 |  |  | $ | 15.8 |
PBF Energy restricted shares |  | 2.8 |  |  | 5.3 |  |  | 6.5 |
PBF Energy performance awards |  | 10.2 |  |  | 7.9 |  |  | 8.2 |
PBFX phantom units |  | 5.3 |  |  | 4.9 |  |  | 6.8 |
|  | $ | 35.6 |  |  | $ | 34.2 |  |  | $ | 37.3 |
PBF Energy options PBF Energy grants stock options which represent the right to purchase share of the Company’s common stock at its fair market value, which is the closing price of PBF Energy’s common stock on the date of grant. Stock options have a maximum term of ten years from the date they are granted, and vest over a requisite service period of three years, or four years for grants prior to November 2020, subject to acceleration in certain circumstances. The Company uses the Black-Scholes option-pricing model to estimate the fair value of stock options granted, which requires the input of subjective assumptions. The Black-Scholes option-pricing model values used to value stock option awards granted were determined based on the following weighted average assumptions:
|  | December 31, 2021 |  | December 31, 2020 |  | December 31, 2019
Expected life (in years) |  | 6.00 |  | 6.08 |  | 6.25
Expected volatility |  | 83.8 | % |  | 69.1 | % |  | 38.6 | %
Dividend yield |  | 0.00 | % |  | 1.41 | % |  | 3.54 | %
Risk-free rate of return |  | 1.37 | % |  | 0.81 | % |  | 2.16 | %
Exercise price |  | $ | 13.91 |  |  | $ | 13.58 |  |  | $ | 34.11 |
Weighted average fair value per option granted |  | $ | 9.84 |  |  | $ | 5.49 |  |  | $ | 9.43 |
The following table summarizes activity for PBF Energy options for 2021:
|  | Number of PBF Energy Class A Common Stock Options |  | Weighted Average Exercise Price |  | Weighted Average Remaining Contractual Life (in years)
Stock-based awards, outstanding at January 1, 2021 |  | 13,790,777 |  |  | $ | 25.69 |  |  | 7.12
Granted |  | 1,700,621 |  |  | 13.91 |  |  | 10.00
Exercised |  | (52,400) |  |  | 6.72 |  |  | — |
Forfeited |  | (389,239) |  |  | 23.70 |  |  | — |
Outstanding at December 31, 2021 |  | 15,049,759 |  |  | $ | 24.48 |  |  | 6.51
Exercisable and vested at December 31, 2021 |  | 9,397,483 |  |  | $ | 27.72 |  |  | 5.26
Expected to vest at December 31, 2021 |  | 15,049,759 |  |  | $ | 24.48 |  |  | 6.51
At December 31, 2021, the total intrinsic value of stock options outstanding and exercisable were $15.6 million and $5.0 million, respectively. The total intrinsic value of stock options exercised during the years ended December 31, 2021, 2020 and 2019 was $0.4 million, $0.0 million and $0.3 million, respectively. Unrecognized compensation expense related to PBF Energy options at December 31, 2021 was $36.7 million, which will be recognized from 2022 through 2024. Restricted Stock Awards The Company grants restricted stock to employees and non-employee directors. In general, restricted stock granted to our employees vest over a requisite services period of four years, subject to acceleration in certain circumstances. Restricted stock recipients who received grants subsequent to May 2017 have voting rights; however, dividends are accrued and will be paid upon vesting. Restricted stock units granted to non-employee directors are considered to vest immediately at the time of the grant for accounting purposes, as they are non-forfeitable, but are issued in equal annual installments on each of the first three anniversaries of the grant date. The non-vested shares are not transferable and are held by our transfer agent. The fair values of restricted stock are equal to the market price of our common stock on the grant date. The following table summarizes activity for PBF Energy restricted stock:
|  | Number of PBF Energy Restricted Class A Common Stock |  | Weighted Average Grant Date Fair Value
Nonvested at January 1, 2021 |  | 303,555 |  |  | $ | 22.32 |
Granted |  | 81,840 |  |  | 16.13 |
Vested |  | (229,462) |  |  | 24.34 |
Forfeited |  | (246) |  |  | 24.18 |
Nonvested at December 31, 2021 |  | 155,687 |  |  | $ | 16.09 |
Unrecognized compensation expense related to PBF Energy Restricted Class A common stock at December 31, 2021 was $0.1 million, which will be recognized from 2022 through 2023. The following table reflects activity related to our restricted stock:
|  | December 31, 2021 |  | December 31, 2020 |  | December 31, 2019
Weighted-average grant-date fair value per share of restricted stock granted |  | $ | 16.13 |  |  | $ | 9.82 |  |  | $ | 28.20 |
Fair value of restricted stock vested (in millions) |  | $ | 3.1 |  |  | $ | 4.2 |  |  | $ | 11.6 |
Performance Awards The Company grants performance share awards, which are paid in stock, and performance share unit awards, which are paid in cash, (collectively, the “performance awards”) to certain key employees. Performance awards granted to employees prior to November 1, 2020 are based on a three-year performance cycle (the "performance cycle") with four measurement periods and performance awards granted to employees after November 1, 2020 are based on a three-year performance cycle having a single measurement period. The performance awards will vest on the last day of the performance cycle, subject to forfeiture or acceleration under certain circumstances set forth in the award agreement. The number of performance awards that will ultimately vest is based on the Company’s total shareholder return over the performance cycle. The number of shares ultimately issued or cash paid under these awards can range from zero to 200% of target award amounts. Performance Share Unit Awards The performance share unit awards are accounted for as equity awards, for which the fair value was determined on the grant date by application of a Monte Carlo valuation model. The grant date fair value was calculated using a Monte Carlo valuation model with the following assumptions:
|  | December 31, 2021 |  | December 31, 2020 |  | December 31, 2019
Expected life (in years) |  | 3.12 |  | 2.89 - 3.14 |  | 2.17 - 2.88
Expected volatility |  | 83.78 | % |  | 39.88% - 82.63% |  | 37.19% - 41.70%
Dividend yield |  | 0.00 | % |  | 0.00% - 4.28% |  | 3.40% - 3.67%
Risk-free rate of return |  | 0.87 | % |  | 0.26% - 1.34% |  | 1.66% - 2.51%
Weighted average grant-date fair value per PSU |  | $ | 18.73 |  |  | $ | 10.77 |  |  | $ | 27.99 |
The risk-free interest rate for the remaining performance period as of the grant date is based on a linear interpolation of published yields of traded U.S. Treasury Interest-Only STRIP Bonds. The dividend yield assumption is based on the annualized most recent quarterly dividend divided by the stock price on the grant date. The assumption for the expected volatility of the Company’s stock price reflects the average of PBF Energy’s common stock historical and implied volatility. The following table summarizes activity for PBF Energy performance share awards:
|  | Number of PBF Energy Performance Share Units (“PSU”) |  | Weighted Average Grant Date Fair Value
Nonvested at January 1, 2021 |  | 623,160 |  |  | $ | 15.62 |
Granted |  | 301,965 |  |  | 18.73 |
Vested |  | (179,600) |  |  | 27.85 |
Nonvested at December 31, 2021 |  | 745,525 |  |  | $ | 13.93 |
In 2021 and 2020, PSU’s with a fair value of $1.8 million and $0.8 million, respectively, were vested. As of December 31, 2021, unrecognized compensation cost related to performance share unit awards was $8.2 million, which is expected to be recognized over a weighted average period of 2.63 years. Performance Unit awards The performance unit awards are dollar denominated with a target value of $1.00, with actual payout of up to $2.00 per unit (or 200 percent of target). The performance unit awards are settled in cash based on the payout amount determined at the end of the performance cycle. The Company accounts for the performance unit awards as liability awards which the Company recorded at fair market value on the date of grant. Subsequently, the performance unit awards will be marked-to-market at the end of each fiscal quarter by application of a Monte Carlo simulation model. The following table summarizes activity for PBF Energy performance unit awards:
|  | Number of PBF Energy Performance Units
Nonvested at January 1, 2021 |  | 16,071,745 |
Granted |  | 11,782,926 |
Vested |  | (7,676,658) |
Nonvested at December 31, 2021 |  | 20,178,013 |
In 2021 and 2020, Performance Units with a fair value of $5.2 million and $3.2 million, respectively, were vested. As of December 31, 2021, unrecognized compensation cost related to performance unit awards was $9.2 million, which is expected to be recognized over a weighted average period of 2.54 years. PBFX Phantom Units PBF GP’s Board of Directors adopted the PBF Logistics LP 2014 Long-Term Incentive Plan (the “PBFX LTIP”) in connection with the completion of the PBFX Offering. The PBFX LTIP is for the benefit of employees, consultants, service providers and non-employee directors of the general partner and its affiliates. In the years ended December 31, 2021, 2020 and 2019, PBFX issued phantom unit awards under the PBFX LTIP to certain directors, officers and employees of our general partner or its affiliates as compensation. The fair value of each phantom unit on the grant date is equal to the market price of PBFX’s common unit on that date. The estimated fair value of PBFX’s phantom units is amortized using the straight-line method over the vesting period of four years, subject to acceleration if certain conditions are met. Total unrecognized compensation cost related to PBFX’s nonvested phantom units totaled $4.7 million as of December 31, 2021, which will be recognized from 2022 through 2025. The fair value of nonvested phantom units outstanding as of December 31, 2021 totaled $11.3 million. A summary of PBFX’s unit award activity for the years ended December 31, 2021, 2020 and 2019 is set forth below:
|  | Number of Phantom Units |  | Weighted Average Grant Date Fair Value
Nonvested at January 1, 2021 |  | 769,688 |  |  | $ | 15.29 |
Granted |  | 344,546 |  |  | 14.50 |
Vested |  | (308,427) |  |  | 17.07 |
Forfeited |  | (15,125) |  |  | 12.81 |
Nonvested at December 31, 2021 |  | 790,682 |  |  | $ | 14.30 |
The following table reflects activity related to our phantom units:
|  | December 31, 2021 |  | December 31, 2020 |  | December 31, 2019
Weighted-average grant-date fair value per phantom unit granted |  | $ | 14.50 |  |  | $ | 8.14 |  |  | $ | 21.39 |
Fair value of phantom unit vested (in millions) |  | $ | 4.6 |  |  | $ | 3.2 |  |  | $ | 6.2 |
The PBFX LTIP provides for the issuance of distribution equivalent rights (“DERs”) in connection with phantom unit awards. A DER entitles the participant, upon vesting of the related phantom units, to a mandatory cash payments equal to the product of the number of vested phantom unit awards and the cash distribution per common unit paid by PBFX to its common unitholders. Cash payments made in connection with DERs are charged to partners’ equity, accrued and paid upon vesting.

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