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Compensation Plans | 12 Months Ended
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Dec. 31, 2022
Share-Based Payment Arrangement [Abstract] |
Compensation Plans | Note 7 – Compensation Plans As of December 31, 2022, approximately 3.8 million shares of common stock were available for grant under the Equity Plan. The issuance of a direct share benefit, such as a share of common stock, a stock option, a restricted share, an RSU or a PSU, counts as one share against the number of shares available to be granted under the Equity Plan. Each PSU has the potential to count as two shares against the number of shares available to be granted under the Equity Plan based on the final performance multiplier. The Company may also grant other types of long-term incentive-based awards, such as cash awards and performance-based cash awards, to eligible employees. Performance Share Units The Company has granted PSUs to eligible employees as part of its Equity Plan. The number of shares of the Company’s common stock issued to settle PSUs ranges from zero to two times the number of PSUs awarded and is determined based on certain criteria over a three-year performance period. PSUs generally vest on the third anniversary of the date of the grant or upon other triggering events as set forth in the Equity Plan. Employees who were retirement eligible on the grant date of the 2022 PSU award vest in pro-rata increments on a daily basis over the three-year performance period beginning at the grant date, and any non-vested portions of a PSU award will be forfeited if the employee leaves the Company. The fair value of PSUs is measured at the grant date using a stochastic Monte Carlo simulation using the GBM Model. A stochastic process is a mathematically defined equation that can create a series of outcomes over time. These outcomes are not deterministic in nature, which means that by iterating the equations multiple times, different results will be obtained for each iteration. In the case of the Company’s PSUs, the Company cannot predict with certainty the path its stock price or the stock prices of its peers will take over the three-year performance period. By using a stochastic simulation, the Company can create multiple prospective stock pathways, statistically analyze these simulations, and ultimately make inferences regarding the path the stock price may take. As such, because future stock prices are stochastic, or probabilistic with some direction in nature, the stochastic method, specifically the GBM Model, is deemed an appropriate method by which to determine the fair value of the PSUs. Significant assumptions used in this simulation include the Company’s expected volatility, dividend yield, and risk-free interest rate based on U.S. Treasury yield curve rates with maturities consistent with a three-year vesting period, as well as the volatilities and dividend yields for each of the Company’s peers. For PSUs granted in 2019, which the Company determined to be equity awards, the settlement criteria included a combination of the Company’s Total Shareholder Return (“TSR”) relative to the TSR of certain peer companies and the Company’s cash return on total capital invested (“CRTCI”) relative to the CRTCI of certain peer companies over the associated three-year performance period. In addition to these performance criteria, the award agreements for these grants also stipulated that if the Company’s absolute TSR was negative over the three-year performance period, the maximum number of shares of common stock that could be issued to settle outstanding PSUs was capped at one times the number of PSUs granted on the award date, regardless of the Company’s TSR and CRTCI performance relative to its peer group. The fair value of the PSUs granted in 2019 was measured on the grant date using the GBM Model, with the assumption that the associated CRTCI performance condition would be met at the target amount at the end of the performance period. PSUs granted in 2019 fully vested in 2022 and were settled as presented below. For PSUs granted in 2022, which the Company determined to be equity awards, settlement will be determined based on a combination of the following criteria measured over the three-year performance period: the Company’s TSR relative to the TSR of certain peer companies, the Company’s absolute TSR, free cash flow (“FCF”) generation, and the achievement of certain ESG targets, in each case as defined by the award agreement. The relative and absolute TSR portions of the fair value of the PSUs granted in 2022 were measured on the grant date using the GBM Model. The portion of the awards associated with FCF generation and ESG performance conditions assumes that target amounts will be met at the end of the performance period. As these awards depend on a combination of performance-based settlement criteria and market-based settlement criteria, compensation expense may be adjusted in future periods because the number of units expected to vest increases or decreases based on the Company’s expected FCF generation and achievement of certain ESG targets. The Company initially records compensation expense associated with the issuance of PSUs based on the fair value of the awards as of the grant date and may adjust compensation expense in future periods as discussed above. Compensation expense for PSUs is recognized within general and administrative expense and exploration expense over the vesting periods of the respective awards. Total compensation expense recorded for PSUs was $2.6 million, $6.0 million, and $4.4 million for the years ended December 31, 2022, 2021, and 2020, respectively. As of December 31, 2022, there was $6.1 million of total unrecognized expense related to non-vested PSUs, which is being amortized through mid-2025. The fair value of PSUs granted in 2022 was $7.4 million and the fair value of PSUs that vested during the years ended December 31, 2022, 2021, and 2020, was $12.3 million, $8.4 million, and $12.6 million, respectively. A summary of activity is presented in the following table:
| For the Years Ended December 31,
| 2022 |  | 2021 |  | 2020
| PSUs (1) |  | Weighted-Average Grant-Date Fair Value |  | PSUs (1) |  | Weighted-Average Grant-Date Fair Value |  | PSUs (1) |  | Weighted-Average Grant-Date Fair Value
Non-vested at beginning of year | 464,483 |  |  | $ | 12.80 |  |  | 830,464 |  |  | $ | 17.52 |  |  | 2,022,585 |  |  | $ | 16.87 |
Granted | 276,010 |  |  | $ | 26.67 |  |  | — |  |  | $ | — |  |  | — |  |  | $ | — |
Vested | (461,387) |  |  | $ | 12.81 |  |  | (352,395) |  |  | $ | 23.81 |  |  | (792,572) |  |  | $ | 15.85 |
Forfeited | (5,848) |  |  | $ | 18.24 |  |  | (13,586) |  |  | $ | 15.46 |  |  | (399,549) |  |  | $ | 17.56 |
Non-vested at end of year | 273,258 |  |  | $ | 26.67 |  |  | 464,483 |  |  | $ | 12.80 |  |  | 830,464 |  |  | $ | 17.52 |
____________________________________________ (1)The number of shares of common stock assumes a multiplier of one. The actual final number of shares of common stock to be issued will range from zero to two times the number of PSUs awarded depending on the three-year performance multiplier. A summary of the shares of common stock issued to settle PSUs is presented in the table below:
| For the Years Ended December 31,
| 2022 |  | 2021 |  | 2020
Shares of common stock issued to settle PSUs (1) | 1,004,410 |  |  | 347,742 |  |  | 700,511 |
Less: shares of common stock withheld for income and payroll taxes | (349,487) |  |  | (112,919) |  |  | (215,451) |
Net shares of common stock issued | 654,923 |  |  | 234,823 |  |  | 485,060 |
Multiplier earned | 2.0 |  | 1.0 |  | 0.9
____________________________________________ (1) During the years ended December 31, 2022, 2021, and 2020, the Company settled PSUs that were granted in 2019, 2018, and 2017, respectively. The Company and all eligible recipients in 2022 and 2021, and the majority of eligible recipients in 2020, mutually agreed to net share settle a portion of the awards to cover income and payroll tax withholdings, as provided for in the Equity Plan and applicable award agreements. Employee Restricted Stock Units The Company has granted RSUs to eligible employees as part of its Equity Plan. Each RSU represents a right to receive one share of the Company’s common stock upon settlement of the award at the end of the specified vesting period. RSUs generally vest in one-third increments on each anniversary date of the grant date over the applicable vesting period or upon other triggering events as set forth in the Equity Plan. Employees who are retirement eligible at the time an RSU award is granted generally vest in six-month increments over the applicable vesting period beginning at the grant date. Retirement eligible employees must stay with the Company through the entire six-month vesting period to receive that increment of vesting and any non-vested portions of an RSU award will be forfeited when the employee leaves the Company. The Company records compensation expense associated with the issuance of RSUs based on the fair value of the awards as of the grant date. The fair value of an RSU is equal to the closing price of the Company’s common stock on the date of the grant. Compensation expense for RSUs is recognized within general and administrative expense and exploration expense over the vesting periods of the respective awards. Total compensation expense recorded for RSUs for the years ended December 31, 2022, 2021, and 2020, was $13.5 million, $10.2 million, and $8.7 million, respectively. As of December 31, 2022, there was $24.4 million of total unrecognized compensation expense related to non-vested RSUs, which is being amortized through mid-2025. The fair value of RSUs granted to eligible employees in 2022, 2021 and 2020, was $18.0 million, $17.0 million, and $8.7 million, respectively, and the fair value of RSUs that vested during the years ended December 31, 2022, 2021, and 2020, was $11.2 million, $9.3 million, and $12.5 million, respectively. A summary of activity is presented in the following table:
| For the Years Ended December 31,
| 2022 |  | 2021 |  | 2020
| RSUs |  | Weighted- Average Grant-Date Fair Value |  | RSUs |  | Weighted- Average Grant-Date Fair Value |  | RSUs |  | Weighted- Average Grant-Date Fair Value
Non-vested at beginning of year | 1,841,237 |  |  | $ | 13.79 |  |  | 2,097,860 |  |  | $ | 8.83 |  |  | 1,532,131 |  |  | $ | 16.01 |
Granted | 526,776 |  |  | $ | 34.08 |  |  | 666,052 |  |  | $ | 25.52 |  |  | 1,458,869 |  |  | $ | 5.98 |
Vested | (920,927) |  |  | $ | 12.17 |  |  | (843,098) |  |  | $ | 11.00 |  |  | (746,132) |  |  | $ | 16.74 |
Forfeited | (72,034) |  |  | $ | 18.24 |  |  | (79,577) |  |  | $ | 10.64 |  |  | (147,008) |  |  | $ | 15.34 |
Non-vested at end of year | 1,375,052 |  |  | $ | 22.42 |  |  | 1,841,237 |  |  | $ | 13.79 |  |  | 2,097,860 |  |  | $ | 8.83 |
A summary of the shares of common stock issued to settle RSUs is presented in the table below:
| For the Years Ended December 31,
| 2022 |  | 2021 |  | 2020
Shares of common stock issued to settle RSUs (1) | 920,927 |  |  | 843,098 |  |  | 746,132 |
Less: shares of common stock withheld for income and payroll taxes | (284,423) |  |  | (250,349) |  |  | (209,173) |
Net shares of common stock issued | 636,504 |  |  | 592,749 |  |  | 536,959 |
____________________________________________ (1) During the years ended December 31, 2022, 2021, and 2020, the Company issued shares of common stock to settle RSUs that related to awards granted in previous years. The Company and all eligible recipients in 2022 and 2021, and the majority of eligible recipients in 2020, mutually agreed to net share settle a portion of the awards to cover income and payroll tax withholdings in accordance with the Company’s Equity Plan and individual award agreements. Director Shares In 2022, 2021, and 2020, the Company issued a total of 29,471, 60,510, and 267,576 shares, respectively, of its common stock to its non-employee directors under the Equity Plan. For the years ended December 31, 2022, 2021, and 2020, the Company recorded $1.5 million, $1.2 million, and $1.0 million, respectively, of compensation expense related to director shares. All shares issued to non-employee directors fully vest on December 31 of the year granted. Employee Stock Purchase Plan Under the Company’s Employee Stock Purchase Plan (“ESPP”), eligible employees may purchase shares of the Company’s common stock through payroll deductions of up to 15 percent of eligible compensation, subject to a maximum of 2,500 shares per offering period and a maximum of $25,000 in value related to purchases for each calendar year. The purchase price of the common stock is 85 percent of the lower of the trading price of the common stock on either the first or last day of the six-month offering period. The ESPP is intended to qualify as an “employee stock purchase plan” under Section 423 of the IRC. The Company had approximately 3.4 million shares of its common stock available for issuance under the ESPP as of December 31, 2022. There were a total of 113,785, 313,773, and 464,757 shares issued under the ESPP in 2022, 2021, and 2020, respectively. Total proceeds to the Company for the issuance of these shares was $3.0 million, $2.6 million, and $1.5 million, for the years ended December 31, 2022, 2021, and 2020, respectively. The fair value of ESPP grants is measured at the grant date using the Black-Scholes option-pricing model. Expected volatility is calculated based on the Company’s historical daily common stock price, and the risk-free interest rate is based on U.S. Treasury yield curve rates with maturities consistent with a six-month vesting period. The fair value of ESPP shares issued during the periods reported above were estimated using the following weighted-average assumptions:
| For the Years Ended December 31,
| 2022 |  | 2021 |  | 2020
Risk free interest rate | 1.2 | % |  | 0.8 | % |  | 0.8 | %
Dividend yield | 0.1 | % |  | 0.3 | % |  | 0.7 | %
Volatility factor of the expected market price of the Company’s common stock | 69.1 | % |  | 106.1 | % |  | 166.2 | %
Expected life (in years) | 0.5 |  | 0.5 |  | 0.5
For the years ended December 31, 2022, 2021, and 2020, the Company expensed $1.2 million, $1.4 million, and $0.9 million, respectively, based on the estimated fair value of the ESPP grants. 401(k) Plan The Company has a defined contribution plan (“401(k) Plan”) that is subject to the Employee Retirement Income Security Act of 1974. The 401(k) Plan allows eligible employees to contribute a maximum of 60 percent of their base salaries up to the contribution limits established under the IRC. The Company matches either 100 percent or 150 percent of each employee’s contributions, depending on pension plan eligibility, up to six percent of the employee’s base salary and performance bonus, and may make additional contributions at its discretion. Please refer to Note 11 – Pension Benefits for additional discussion of pension benefits. The Company’s matching contributions to the 401(k) Plan were $5.5 million, $3.9 million, and $4.2 million for the years ended December 31, 2022, 2021, and 2020, respectively.

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