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Share-Based Awards | 12 Months Ended
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Dec. 31, 2021
Share-based Payment Arrangement [Abstract] |
Share-Based Awards | Share-Based Awards The Company has a share-based compensation plan which was approved by its shareholders in April 2020 (the Plan) under which its Board of Directors may grant to employees share-based awards including restricted stock units (RSUs), performance shares, and nonqualified stock options. Performance shares include a three-year performance period with vesting based on achievement of internal performance targets and, beginning with the 2021 grant, include a vesting component based on a Total Shareholder Return (TSR) relative to a peer group. RSUs granted under the Plan generally vest ratably over a three-year period with the first one-third of the grant vesting one year after the date of grant. Dividends are paid on RSUs and performance shares settled with stock. Dividend equivalents are paid on RSUs and performance shares settled with cash. Stock options granted in 2021 include a service component to vest and a market condition to become exercisable. The 2021 stock options expire 10 years from the grant date or, if the grantee's employment ceases prior to December 31, 2023, 6 years from the grant date. Stock options granted prior to 2021 expire 10 years from the date of grant. At December 31, 2021, there were 2.8 million shares of common stock available for future awards under the Plan. The Company recognizes the cost of its share-based awards in the Consolidated statements of operations. The cost of each share-based equity award is based on the grant date fair value and the cost of each share-based cash-settled award is based on the settlement date fair value. Forfeitures for share-based awards are estimated at the grant date and adjusted when it is likely to change. Share-based award expense is recognized on a straight-line basis over the service or performance periods of each separately vesting tranche within the awards. The expense recognized reflects the number of awards that are ultimately expected to vest based on the service and, if applicable, performance requirements of each award. Total share-based award compensation expense recognized by the Company during 2021, 2020 and 2019 was $42.2 million, $23.5 million and $33.7 million, respectively, or $32.3 million, $18.0 million and $25.8 million net of taxes, respectively. Restricted Stock Units and Performance Shares - Settled in Stock – The fair value of RSUs settled in stock and performance shares settled in stock that do not contain a market condition is determined based on the market price of the Company’s stock on the grant date. The performance shares settled in stock granted in 2021 contain a relative TSR market condition. The Company estimated the fair value of the TSR component using a Monte Carlo simulation. The Company uses historical volatility to determine the expected volatility of its performance shares that include a TSR component. The risk-free rate for periods within the contractual life of the grant is based on the U.S. Treasury rates at the time of grant. Assumptions used to calculate the grant date fair value of the performance shares granted during 2021, by grant date, were as follows:
| February 2021 |  | May 2021 |  |
Expected volatility | 52.01 | % |  | 54.99 | % |  |
Risk-free interest rate | 0.18 | % |  | 0.27 | % |  |
The activity for these awards for the year ended December 31, 2021 was as follows (in thousands, except for per share amounts):
| Shares & Units |  | Weighted-Average Fair Value Per Share
Nonvested, beginning of period | 1,769 |  |  | $ | 36 |
Granted | 1,769 |  |  | $ | 34 |
Vested | (763) |  |  | $ | 34 |
Forfeited | (293) |  |  | $ | 35 |
Nonvested, end of period | 2,482 |  |  | $ | 35 |
As of December 31, 2021, there was $41.2 million of unrecognized compensation cost related to RSUs and performance shares settled in stock, net of estimated forfeitures, that is expected to be recognized over a weighted-average period of 1.9 years. Restricted Stock Units and Performance Shares - Settled in Cash – RSUs and performance shares settled in cash are recorded in the Consolidated balance sheets as a liability until vested. The fair value is determined based on the market price of the Company’s stock and is remeasured at each balance sheet date. The activity for these awards for the year ended December 31, 2021 was as follows (in thousands, except for per share amounts):
| Units |  | Weighted-Average Fair Value Per Share
Nonvested, beginning of period | 156 |  |  | $ | 36 |
Granted | 206 |  |  | $ | 36 |
Vested | (64) |  |  | $ | 36 |
Forfeited | (33) |  |  | $ | 41 |
Nonvested, end of period | 265 |  |  | $ | 36 |
Stock Options – The Company estimated the grant date fair value of its 2021 stock option award using a Monte Carlo simulation, assuming a 1.49% expected dividend yield, an expected volatility rate of 44.1%, a risk-free interest rate of 1.21%, and an expected term of 5.5 years. The Company uses historical volatility to determine the expected volatility of its stock. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury rates at the time of grant. The expected term of options granted assumes the options will be exercised halfway between the time that they are earned based on achieving the market condition and the end of the award term. There were no stock options granted in 2020 or 2019. The Company’s policy is to issue new shares of common stock upon the exercise of employee stock options. The stock option transactions for the year ended December 31, 2021 were as follows (in thousands, except for per share amounts):
| Options |  | Weighted-Average Exercise Price
Outstanding, beginning of period | 658 |  |  | $ | 56 |
Options granted | 500 |  |  | $ | 37 |
Exercised | (98) |  |  | $ | 44 |
Forfeited | (67) |  |  | $ | 47 |
Outstanding, end of period | 993 |  |  | $ | 48 |
Exercisable, end of period | 493 |  |  | $ | 59 |
The aggregate intrinsic value related to stock options exercised, outstanding and exercisable as of and for the years ended December 31, was as follows (in thousands):
| 2021 |  | 2020 |  | 2019
Exercised | $ | 289 |  |  | $ | 21 |  |  | $ | 2,614 |
Outstanding | $ | 530 |  |  | $ | — |  |  | $ | 52 |
Exercisable | $ | — |  |  | $ | — |  |  | $ | 52 |
Stock options outstanding at December 31, 2021 were as follows (options in thousands):
Price Range |  | Weighted-Average Contractual Life |  | Options |  | Weighted-Average Exercise Price
$30.01 to $40 |  | 10.0 |  | 500 |  |  | $ | 37 |
$40.01 to $50 |  | 0.1 |  | 29 |  |  | $ | 45 |
$50.01 to $60 |  | 1.0 |  | 116 |  |  | $ | 52 |
$60.01 to $70 |  | 1.7 |  | 348 |  |  | $ | 63 |
Options outstanding |  | 5.8 |  | 993 |  |  | $ | 48 |
Options exercisable |  | 1.5 |  | 493 |  |  | $ | 59 |

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