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Equity-Based Compensation

9 Months Ended

Sep. 30, 2021

NOTE 8. EQUITY-BASED COMPENSATION

At September 30, 2021, approximately 1.0 million shares are available for future use under our long-term incentive plans.

Share-based compensation activity during the nine months ended September 30, 2021 included the following:


(Shares in thousands)	Granted		Vested		Forfeited
Performance Share Awards (PSAs)		88,128		—		1,450
Restricted Stock Units (RSUs)		65,607		24,599		1,484

Approximately 0.1 million shares of common stock were issued to employees during the nine months ended September 30, 2021 as a result of PSA and RSU vesting during 2020 and 2021.

Issuance of RSUs awarded to certain directors, officers and employees may be deferred at the individual's election. All deferred RSUs are credited with dividend equivalents. During the nine months ended September 30, 2021, approximately 0.1 million shares of common stock were issued for employees and directors where issuance had been deferred.

The following table details equity-based compensation expense and the related income tax benefit:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2021		2020		2021		2020
Equity-based compensation expense:
Performance share awards	$	1,416	$	1,315	$	4,012	$	3,716
Restricted stock units		805		729		2,197		2,155
Deferred compensation stock equivalent units expense		54		19		136		57
Total equity-based compensation expense	$	2,275	$	2,063	$	6,345	$	5,928

Total tax benefit recognized for equity-based expense	$	125	$	97	$	321	$	273

Performance Share Awards

The weighted average grant date fair value of PSAs granted in 2021 was $69.72 per share. PSAs granted under the stock incentive plans have a three-year performance period and shares are issued at the end of the period if the performance measures are met. The number of shares actually issued, as a percentage of the amount subject to the PSA, could range from 0% to 200%. PSAs granted under the stock incentive plans do not have voting rights unless and until shares are issued upon settlement. If shares are issued at the end of the performance measurement period, the recipients will receive dividend equivalents in the form of additional shares at the time of payment equal to the dividends that would have been paid on the shares earned had the recipients owned the shares during the three-year period. Therefore, the shares are not considered participating securities.

The following table presents the key inputs used in the Monte Carlo simulation to calculate the fair value of the performance share awards granted in 2021:


Stock price as of valuation date	$	53.53
Risk-free rate		0.18	%
Expected volatility		45.56	%
Expected dividend yield1		—
Expected term (years)		3.00


1	Full dividend reinvestment assumed.

Restricted Stock Units

The weighted average fair value of all RSUs granted during the nine months ended September 30, 2021 was $54.53 per share. The fair value of RSUs granted equaled our common share price on the date of grant factoring in any required post-vesting holding periods. The RSU awards granted accrue dividend equivalents based on dividends paid during the RSU vesting period. The dividend equivalents will be converted into additional RSUs that vest in the same manner as the underlying RSU to which they relate. The terms of the awards state that the RSUs will vest in a given time period of one to four years. The vesting provisions for RSUs granted in 2021 were consistent with prior year grants.