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STOCK-BASED COMPENSATION | 12 Months Ended
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Dec. 31, 2023
Share-Based Payment Arrangement [Abstract] |
STOCK-BASED COMPENSATION | NOTE 18. STOCK-BASED COMPENSATION Stock-based compensation expense was allocated to the operating segments for the portion related to employees whose compensation would be included in cost of goods sold with the remainder recognized in corporate/other. There were no significant capitalized stock-based compensation costs. Stock-based compensation granted includes stock options, performance share awards, restricted stock awards and deferred directors’ compensation. Stock-based compensation expense was as follows:
| Years ended December 31,
| 2023 |  | 2022 |  | 2021
Stock Compensation Expense | ($ in millions)
Stock-based compensation | $ | 26.7 |  |  | $ | 25.6 |  |  | $ | 28.4 |
Mark-to-market adjustments | 1.1 |  |  | (2.5) |  |  | 24.7 |
Total expense | $ | 27.8 |  |  | $ | 23.1 |  |  | $ | 53.1 |
Stock Plans Under the stock option and long-term incentive plans, options may be granted to purchase shares of our common stock at an exercise price not less than fair market value at the date of grant, and are exercisable for a period not exceeding ten years from that date. Stock options, restricted stock and performance shares typically vest over three years. We issue shares to settle stock options, restricted stock and share-based performance awards. In 2023, 2022 and 2021, long-term incentive awards included stock options, performance share awards and restricted stock. The stock option exercise price was set at the fair market value of common stock on the date of the grant, and the options have a ten-year term. The fair value of each stock option granted, which typically vests ratably over three years, but not less than one year, was estimated on the date of grant, using the Black-Scholes option-pricing model with the following assumptions:
Grant Date Assumptions | 2023 |  | 2022 |  | 2021
Dividend yield | 1.32% |  | 1.60% |  | 2.76%
Risk-free interest rate | 4.07% |  | 1.93% |  | 0.94%
Expected volatility | 47% |  | 48% |  | 44%
Expected life (years) | 7.0 |  | 7.0 |  | 6.0
Weighted-average grant fair value (per option) | $ | 28.74 |  | $ | 21.18 |  | $ | 9.91
Weighted-average exercise price | $ | 60.43 |  | $ | 49.71 |  | $ | 28.99
Stock options granted | 564,124 |  | 752,100 |  | 1,154,700
Dividend yield was based on our current dividend yield as of the option grant date. Risk-free interest rate was based on zero coupon U.S. Treasury securities rates for the expected life of the options. Expected volatility was based on our historical stock price movements, as we believe that historical experience is the best available indicator of the expected volatility. Expected life of the option grant was based on historical exercise and cancellation patterns, as we believe that historical experience is the best estimate for future exercise patterns. Stock option transactions were as follows:
|  |  |  |  |  |  | Exercisable
Stock Option Transactions | Shares |  | Option Price |  | Weighted-Average Option Price |  | Options |  | Weighted-Average Exercise Price
Outstanding at January 1, 2023 | 5,438,720 |  |  | 13.14-65.77 |  | $ | 29.36 |  |  | 3,740,936 |  |  | $ | 26.50 |
Granted | 564,124 |  |  | 49.42-60.55 |  | 60.43 |  |  |  |  |
Exercised | (972,080) |  |  | 13.14-50.08 |  | 26.06 |  |  |  |  |
Canceled | (107,191) |  |  | 23.28-60.55 |  | 44.79 |  |  |  |  |
Outstanding at December 31, 2023 | 4,923,573 |  |  | 13.14-65.77 |  | $ | 33.23 |  |  | 3,654,274 |  |  | $ | 27.33 |
At December 31, 2023, the average exercise period for all outstanding and exercisable options was 70 months and 59 months, respectively. At December 31, 2023, the aggregate intrinsic value (the difference between the exercise price and market value) for outstanding options was $105.9 million, which includes exercisable options of $97.5 million. The total intrinsic value of options exercised during the years ended December 31, 2023, 2022 and 2021, was $29.7 million, $36.9 million and $73.1 million, respectively. The total unrecognized compensation cost related to unvested stock options at December 31, 2023, was $15.5 million and was expected to be recognized over a weighted-average period of 1.3 years. The following table provides certain information with respect to stock options exercisable at December 31, 2023:
Range of Exercise Prices |  | Options Exercisable |  | Weighted-Average Exercise Price |  | Options Outstanding |  | Weighted-Average Exercise Price
Under $27.00 |  | 1,586,954 |  |  | $ | 20.52 |  |  | 1,586,954 |  |  | $ | 20.52 |
$27.00 - $45.00 |  | 1,843,786 |  |  | 30.26 |  |  | 2,107,064 |  |  | 30.12 |
Over $45.00 |  | 223,534 |  |  | 51.53 |  |  | 1,229,555 |  |  | 54.98 |
|  | 3,654,274 |  |  |  |  | 4,923,573 |  |  |
At December 31, 2023, common shares reserved for issuance and available for grant or purchase under the following plans consisted of:
| Number of Shares
Incentive Plans | Reserved for Issuance |  | Available for Grant or Purchase(1)
2003 Long Term Incentive Plan | 29,834 |  |  | — |
2006 Long Term Incentive Plan | 18,698 |  |  | — |
2009 Long Term Incentive Plan | 94,984 |  |  | — |
2014 Long Term Incentive Plan | 355,082 |  |  | — |
2016 Long Term Incentive Plan | 1,066,818 |  |  | — |
2018 Long Term Incentive Plan | 8,054,619 |  |  | 3,765,408 |
2021 Long Term Incentive Plan | 2,750,000 |  |  | 2,582,262 |
Total under stock option plans | 12,370,035 |  |  | 6,347,670 |
(1) All available to be issued as stock options, but includes a sub-limit for all types of stock awards of 2,595,246 shares.
| Number of Shares
Director Plans | Reserved for Issuance |  | Available for Grant or Purchase
1997 Stock Plan for Non-employee Directors | 368,778 |  |  | 106,697 |
Under the stock purchase plans, our non-employee directors may defer certain elements of their compensation into shares of our common stock based on fair market value of the shares at the time of deferral. Non-employee directors annually receive stock grants as a portion of their director compensation. Of the shares reserved under the stock purchase plans at December 31, 2023, 262,081 shares were committed. Performance share awards are denominated in shares of our stock and are paid half in cash and half in stock. Payouts for performance share awards are based on two criteria: (1) 50% of the award is based on Olin’s total shareholder returns (TSR) over the applicable three-year performance cycle in relation to the TSR over the same period among a portfolio of public companies which are selected in concert with outside compensation consultants and (2) 50% of the award is based on Olin’s net income over the applicable three-year performance cycle in relation to the net income goal for such period as set by the Compensation Committee of Olin’s Board of Directors. The expense associated with performance shares is recorded based on our estimate of our performance relative to the respective target. If an employee leaves the company before the end of the performance cycle, the performance shares may be prorated based on the number of months of the performance cycle worked and are settled in cash instead of half in cash and half in stock when the three-year performance cycle is completed. Granted shares reflects changes in assumptions associated with the expected achievement of the aforementioned criteria. The fair value of each performance share award based on net income was estimated on the date of grant, using the current stock price. The fair value of each performance share award based on TSR was estimated on the date of grant, using a Monte Carlo simulation model with the following weighted average assumptions:
Grant Date Assumptions | 2023 |  | 2022 |  | 2021
Risk-free interest rate | 4.46% |  | 1.74% |  | 0.23%
Expected volatility of Olin common stock | 52% |  | 59% |  | 55%
Expected average volatility of peer companies | 42% |  | 47% |  | 50%
Average correlation coefficient of peer companies | 0.51 |  | 0.51 |  | 0.50
Expected life (years) | 3.0 |  | 3.0 |  | 3.0
Grant date fair value (TSR-based award) | $ | 86.98 |  | $ | 64.13 |  | $ | 39.96
Grant date fair value (net income-based award) | 60.55 |  | 49.71 |  | 28.99
Performance share awards granted | 161,474 |  | 184,000 |  | 248,700
Risk-free interest rate was based on zero coupon U.S. Treasury securities rates for the expected life of the performance share awards. Expected volatility of Olin common stock and peer companies was based on historical stock price movements, as we believe that historical experience is the best available indicator of the expected volatility. The average correlation coefficient of peer companies was determined based on historical trends of Olin’s common stock price compared to the peer companies. Expected life of the performance share award grant was based on historical exercise and cancellation patterns, as we believe that historical experience is the best estimate of future exercise patterns. Performance share transactions were as follows:
| To Settle in Cash |  | To Settle in Shares
Performance Share Transactions | Shares |  | Weighted-Average Fair Value per Share |  | Shares |  | Weighted-Average Fair Value per Share
Outstanding at January 1, 2023 | 675,016 |  |  | $ | 52.90 |  |  | 388,808 |  |  | $ | 29.94 |
Granted | 76,455 |  |  | 63.08 |  |  | 91,950 |  |  | 63.56 |
Paid/issued | (357,601) |  |  | 52.90 |  |  | (131,633) |  |  | 17.33 |
Converted from shares to cash | 5,397 |  |  | 37.49 |  |  | (5,397) |  |  | 37.49 |
Canceled | (3,605) |  |  | 54.17 |  |  | (3,876) |  |  | 42.61 |
Outstanding at December 31, 2023 | 395,662 |  |  | $ | 54.18 |  |  | 339,852 |  |  | $ | 43.65 |
Total vested at December 31, 2023 | 309,835 |  |  | $ | 54.18 |  |  | 249,753 |  |  | $ | 40.37 |
The summary of the status of our unvested performance shares to be settled in cash were as follows:
Unvested Performance Shares | Shares |  | Weighted-Average Fair Value per Share
Unvested at January 1, 2023 | 125,750 |  |  | $ | 52.90 |
Granted | 76,455 |  |  | 63.08 |
Vested | (112,773) |  |  | 54.18 |
Canceled | (3,605) |  |  | 54.17 |
Unvested at December 31, 2023 | 85,827 |  |  | $ | 54.18 |
At December 31, 2023, the liability recorded for performance shares to be settled in cash totaled $17.0 million. The total unrecognized compensation cost related to unvested performance shares at December 31, 2023, was $9.8 million and was expected to be recognized over a weighted-average period of 1.7 years.

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