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SHARE-BASED COMPENSATION | 12 Months Ended
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Dec. 31, 2022
Share-Based Payment Arrangement [Abstract] |
SHARE-BASED COMPENSATION | Note 14 — SHARE-BASED COMPENSATION Share-based compensation cost is based on the value of the portion of share-based payment awards that are ultimately expected to vest during the period. Share-based compensation cost recognized in the accompanying Consolidated Statements of Income includes compensation cost for share-based payment awards based on the grant date fair value estimated in accordance with the provision of FASB ASC Topic 718, Compensation — Stock Compensation. Share-based compensation expense is based on awards expected to vest and therefore has been reduced for estimated forfeitures. Equity and Performance Incentive Plans In May 2020, our shareholders approved the Avient Corporation 2020 Equity and Incentive Compensation Plan (2020 EICP). This plan reserved 2.5 million common shares for the award of a variety of share-based compensation alternatives, including non-qualified stock options, incentive stock options, restricted stock, restricted stock units (RSUs), performance shares, performance units and stock appreciation rights (SARs). It is anticipated that all share-based grants and awards that are earned and exercised will be issued from Avient common shares that are held in treasury. Share-based compensation is included in Selling and administrative expense. A summary of compensation expense by type of award follows:
(In millions) |  | 2022 |  | 2021 |  | 2020
Stock appreciation rights |  | $ | 5.9 |  |  | $ | 5.2 |  |  | $ | 4.4 |
Performance shares |  | 0.2 |  |  | 0.2 |  |  | 0.2 |
Restricted stock units |  | 7.1 |  |  | 5.8 |  |  | 6.7 |
Total share-based compensation |  | $ | 13.2 |  |  | $ | 11.2 |  |  | $ | 11.3 |
Stock Appreciation Rights During the years ended December 31, 2022, 2021 and 2020, the total number of SARs granted was 0.4 million, 0.5 million and 0.5 million, respectively. Awards vest in one-third increments upon the later of the attainment of time-based vesting over a three-year service period and stock price targets. Awards granted in 2022, 2021 and 2020 are subject to an appreciation cap of 200% of the base price. SARs have contractual terms of ten years from the date of the grant. The SARs were valued using a Monte Carlo simulation method as the vesting is dependent on the achievement of certain stock price targets. The SARs have time and market-based vesting conditions but vest no earlier than their three year graded vesting schedule. The expected term is an output from the Monte Carlo model and is derived from employee exercise assumptions that are based on Avient historical exercise experience. The expected volatility was determined based on the average weekly volatility for our common shares for the contractual life of the awards. The expected dividend assumption was determined based upon Avient's dividend yield at the time of grant. The risk-free rate of return was based on available yields on U.S. Treasury bills of the same duration as the contractual life of the awards. Forfeitures were estimated at 3% per year based on our historical experience. The following is a summary of the weighted average assumptions related to the grants issued during 2022, 2021 and 2020:
|  | 2022 |  | 2021 |  | 2020
Expected volatility |  | 33.0% |  | 34.0% |  | 33.0%
Expected dividends |  | 1.80% |  | 2.01% |  | 2.57%
Expected term (in years) |  | 6.9 |  | 6.9 |  | 6.9
Risk-free rate |  | 1.98% |  | 1.19% |  | 1.56%
Value of SARs granted |  | $14.91 |  | $11.72 |  | $8.11
A summary of SAR activity for 2022 is presented below:
(In millions, except per share data) |  | Shares |  | Weighted-Average Exercise Price per Share |  | Weighted-Average Remaining Contractual Term |  | Aggregate Intrinsic value
Outstanding as of January 1, 2022 |  | 1.9 |  |  | $ | 33.86 |  |  | 7.1 |  | $ | 39.1 |
Granted |  | 0.4 |  |  | 52.64 |  |  |  |  |
Exercised |  | (0.1) |  |  | 32.12 |  |  |  |  |
Forfeited or expired |  | — |  |  | 45.88 |  |  |  |  |
Outstanding as of December 31, 2022 |  | 2.2 |  |  | $ | 39.08 |  |  | 6.8 |  | $ | 2.6 |
Vested and exercisable as of December 31, 2022 |  | 1.2 |  |  | $ | 34.63 |  |  | 5.6 |  | $ | 2.2 |
The total intrinsic value of SARs exercised during 2022, 2021 and 2020 was $2.4 million, $22.9 million and $1.8 million, respectively. As of December 31, 2022, there was $3.8 million of total unrecognized compensation cost related to SARs, which is expected to be recognized over the weighted average remaining vesting period of 22 months. Restricted Stock Units RSUs represent contingent rights to receive one common share at a future date provided certain vesting criteria are met. During 2022, 2021 and 2020, the total number of RSUs granted were 0.2 million, 0.2 million and 0.3 million, respectively. In 2022, 0.2 million RSUs vested. These RSUs, which generally vest on the third anniversary of the grant date, were granted to executives and other key employees. Compensation expense is measured on the grant date using the quoted market price of our common shares and is recognized on a straight-line basis over the requisite service period. As of December 31, 2022, 0.6 million RSUs remain unvested with a weighted-average grant date fair value of $38.59. Unrecognized compensation cost for RSUs at December 31, 2022 was $8.2 million, which is expected to be recognized over the weighted average remaining vesting period of 22 months.

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