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Share-Based Compensation | 12 Months Ended
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Dec. 31, 2021
Share-based Payment Arrangement [Abstract] |
Share-Based Compensation | Share-Based Compensation The Company has established the Peabody Energy Corporation 2017 Incentive Plan (the 2017 Incentive Plan) for employees, non-employee directors and consultants that allows for the issuance of share-based compensation in various forms including options (including non-qualified stock options and incentive stock options), stock appreciation rights, restricted stock, restricted stock units, deferred stock, performance units, dividend equivalents and cash incentive awards. Under the 2017 Incentive Plan, approximately 14 million shares of the Company’s Common Stock were reserved for issuance. As of December 31, 2021, there are approximately 7.0 million shares of the Company’s Common Stock available for grant. Share-Based Compensation Expense and Cash Flows The Company’s share-based compensation expense is recorded in “Operating costs and expenses” and “Selling and administrative expenses” in the consolidated statements of operations. Cash received by the Company upon the exercise of stock options is reflected as a financing activity in the consolidated statements of cash flows. Share-based compensation expense and cash flow amounts were as follows:
| Year Ended December 31,
| 2021 |  | 2020 |  | 2019
| (Dollars in millions)
Share-based compensation expense | $ | 10.0 |  |  | $ | 13.5 |  |  | $ | 38.3 |
Tax benefit | — |  |  | — |  |  | — |
Share-based compensation expense, net of tax benefit | $ | 10.0 |  |  | $ | 13.5 |  |  | $ | 38.3 |
Cash received upon the exercise of stock options | — |  |  | — |  |  | — |
Write-off tax benefits related to share-based compensation | — |  |  | — |  |  | — |
As of December 31, 2021, the total unrecognized compensation cost related to nonvested awards was $4.9 million, net of taxes, which is expected to be recognized over 2.5 years with a weighted-average period of 0.6 years. Deferred Stock Units During the years ended December 31, 2021, 2020 and 2019, the Company granted deferred stock units to each of the non-employee members of the Board. The fair value of these units is equal to the market price of the Company’s Common Stock at the date of grant. These deferred stock units generally vest on a monthly basis over 12 months and are settled in Common Stock three years after the date of grant. Restricted Stock Units The Company grants restricted stock units to certain senior management and non-senior management employees. For units granted to both senior and non-senior management employees containing only service conditions, the fair value of the award is equal to the market price of the Company’s Common Stock at the date of grant. Units granted to senior and non-senior management employees vest at various times (none of which exceed three years) in accordance with the underlying award agreement. Compensation cost for both senior and non-senior management employees is recognized on a straight-line basis over the requisite service period. The payouts for active grants awarded during the years ended December 31, 2021, 2020 and 2019 will be settled in the Company’s Common Stock. A summary of restricted stock unit activity is as follows:
| Year Ended December 31, 2021 |  | Weighted Average Grant-Date Fair Value
Nonvested at December 31, 2020 | 1,629,956 |  |  | $ | 14.49 |
Granted | 752,039 |  |  | 4.14 |
Vested | (826,473) |  |  | 13.81 |
Forfeited | (451,694) |  |  | 9.90 |
Nonvested at December 31, 2021 | 1,103,828 |  |  | $ | 8.99 |
The total fair value at grant date of restricted stock units granted during the years ended December 31, 2021, 2020 and 2019 was $3.1 million, $16.6 million and $19.8 million, respectively. The restricted stock units receive dividend equivalent units (DEUs) upon payment of cash dividends to holders of Common Stock. DEUs vest subject to the same vesting requirements as the underlying restricted stock unit award. As of December 31, 2021, there were approximately 7,000 nonvested DEUs. The total fair value of restricted stock units and DEUs vested was $3.3 million, $5.6 million and $40.3 million during the years ended December 31, 2021, 2020 and 2019, respectively. In March 2021 the Company entered into a transition agreement with its former chief executive officer which resulted in a modification to restricted stock units granted. Under terms of the agreement, any restricted stock units held by the former chief executive officer that would have vested under their original terms during the twelve months following the specified termination vested upon such date. As a result of this modification, the Company avoided additional compensation expense of approximately $1.3 million for the year ended December 31, 2021. Performance Units Performance units are typically granted annually in January and vest over a three-year measurement period and are primarily limited to senior management personnel. The performance units are usually subject to the achievement of goals based on the following conditions: three-year return on invested capital and environmental reclamation (performance condition). In addition, the payout of the performance units can be increased or decreased by up to 25% of the award based on three-year stock price performance compared to a custom peer group (market condition). There were no performance units granted during the year ended December 31, 2021. Awards granted during the years ended December 31, 2020 and 2019 will be settled in the Company's Common Stock. A summary of performance unit activity is as follows:
| Year Ended December 31, 2021 |  | Weighted Average Remaining Contractual Life
Nonvested at December 31, 2020 | 858,588 |  |  | 1.5 |
Granted | — |  |  |
Vested | (118,031) |  |  |
Forfeited | (89,651) |  |  |
Nonvested at December 31, 2021 | 650,906 |  |  | 0.7 |
As of December 31, 2021, there were 131,203 performance units and DEU’s vested that had an aggregate intrinsic value of $0.5 million and a conversion price per share of $3.89. The performance units receive DEUs upon payment of cash dividends to holders of Common Stock. DEUs vest subject to the same vesting requirements as the underlying performance unit award. As of December 31, 2021, there were approximately 17,000 nonvested DEUs. In March 2021 the Company entered into a transition agreement with its former chief executive officer which resulted in a modification to performance units granted. Under terms of the agreement, a portion of the performance units held by the former chief executive officer as of the specified termination date remain eligible to vest based on actual performance through the original performance period. As a result of this modification, the Company avoided additional compensation expense of approximately $2.5 million for the year ended December 31, 2021. The performance condition awards were valued utilizing the grant date fair values of the Company’s Common Stock adjusted for dividends foregone during the vesting period. The market condition awards were valued utilizing a Monte Carlo simulation model which incorporates the total stockholder return hurdles set for each grant. The assumptions used in the valuations for grants were as follows:
| Year Ended December 31,
| 2021 |  | 2020
Risk-free interest rate | — | % |  | 1.45 | %
Expected volatility | — | % |  | 49.34 | %
Dividend yield | — | % |  | — | %

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