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Share-Based Payments | 3 Months Ended
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Mar. 31, 2023
Share-Based Payment Arrangement [Abstract] |
Share-Based Payments | Share-Based Payments Stock Compensation Expense Stock-based compensation expense arising from our employee stock purchase plan and share-based compensation plans recognized within operating expenses in the consolidated statements of income amounted to $5.3 million and $4.9 million for the three months ended March 31, 2023 and 2022, respectively. Restricted Stock Awards. We grant restricted stock awards to members of our Board of Directors and restricted stock units to certain key employees. The awards vest, depending on award type and recipient, either ratably over periods of three or four years or cliff vest after four years. Vesting is accelerated in certain circumstances, including on retirement. The following is a summary of stock award activity for the three months ended March 31, 2023:
| Shares |  | Weighted Average Grant-Date Fair Value
Nonvested, January 1, 2023 | 141,551 |  |  | $ | 49.83 |
Granted | 17,900 |  |  | 64.65 |
Vested | (18,600) |  |  | 50.94 |
Forfeited | — |  |  | — |
Nonvested, March 31, 2023 | 140,851 |  |  | $ | 51.57 |
The fair value of vested awards was $1.2 million during the three months ended March 31, 2023 and 2022. Stock Performance Awards. Stock performance awards are granted to executive officers and certain other key employees. The awards vest at the end of a three-year performance period. The number of common shares awarded, if any, at the end of the performance period ranges from zero to 150% of the target amount based on two performance measures: i) total shareholder return relative to a peer group and ii) return on equity. Vesting of the awards is accelerated in certain circumstances, including on retirement. The amount of common shares awarded on an accelerated vesting is based either on actual performance at the end of the performance period or the amount of common shares earned at target. The grant date fair value of stock performance awards granted during the three months ended March 31, 2023 and 2022 was determined using a Monte Carlo fair value simulation model incorporating the following assumptions:
| 2023 |  | 2022
Risk-free interest rate | 4.15 | % |  | 1.52 | %
Expected term (in years) | 3.00 |  | 3.00
Expected volatility | 34.00 | % |  | 32.00 | %
Dividend yield | 2.50 | % |  | 2.90 | %
The risk-free interest rate was derived from yields on U.S. government bonds of a similar term. The expected term of the award is equal to the three-year performance period. Expected volatility was estimated based on actual historical volatility of our common stock. Dividend yield was estimated based on historic and future yield estimates. The following is a summary of stock performance award activity for the three months ended March 31, 2023 (share amounts reflect awards at target):
| Shares |  | Weighted Average Grant-Date Fair Value
Nonvested, January 1, 2023 | 189,800 |  |  | $ | 45.95 |
Granted | 59,400 |  |  | 61.97 |
Vested | (55,000) |  |  | 47.79 |
Forfeited | — |  |  | — |
Nonvested, March 31, 2023 | 194,200 |  |  | $ | 50.33 |
The fair value of vested awards was $5.3 million and $5.1 million during the three months ended March 31, 2023 and 2022, respectively.

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