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Stock-based Compensation | 9 Months Ended
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Sep. 30, 2022
Share-Based Payment Arrangement [Abstract] |
Stock-based Compensation | Stock-based Compensation The Company's equity incentive plan was approved and amended by stockholders on April 27, 2005 and May 20, 2014, respectively. The Company is authorized to issue awards up to 2,000,000 shares of common stock. During the first nine months of 2022, the Company granted Restricted Stock Awards (RSAs) to Officers and to members of the Board of Directors. An RSA share represents a restricted share of the Company's common stock and is valued based on the fair market value of the Company's common stock at the date of grant. RSAs granted to Officers vest over 36 months with the first year cliff vesting. In general, RSAs granted to Board members vest at the end of 12 months. The RSAs are recognized as expense evenly over 36 months for the shares granted to Officers and 12 months for the shares granted to Board members. As of September 30, 2022, there was approximately $2.2 million of total unrecognized compensation cost related to RSAs. The cost is expected to be recognized over a weighted average period of 1.7 years. A summary of the status of the outstanding RSAs as of September 30, 2022 is presented below:
| Number of RSA Shares |  | Weighted-Average Grant-Date Fair Value
RSAs at January 1, 2022 | 62,691 |  |  | $ | 53.49 |
Granted | 42,057 |  |  | 56.42 |
Vested | (47,137) |  |  | 53.55 |
Forfeited | (1,650) |  |  | 56.42 |
RSAs at September 30, 2022 | 55,961 |  |  | $ | 55.56 |
During the first nine months of 2022, the Company granted performance-based Restricted Stock Units (RSUs) to Officers. An RSU represents the right to receive a share of the Company's common stock. Each award reflects a target number shares of common stock that may be issued to the award recipient. The 2022 awards may be earned upon the completion of a 3-year performance period. Whether RSUs are earned at the end of the performance period will be determined based on the achievement of certain performance objectives set by the Organization and Compensation Committee of the Board of Directors in connection with the issuance of the RSUs. The performance objectives are based on the Company's business plan covering the performance period. The performance objectives include achieving the budgeted return on equity, budgeted investment in utility plant, customer service standards, employee safety standards and water quality standards. Depending on the results achieved during the 3-year performance period, the actual number of shares that a grant recipient receives at the end of the performance period may range from 0% to 200% of the target shares granted, provided that the grantee is continuously employed by the Company through the vesting date. If prior to the vesting date employment is terminated by reason of death, disability or normal retirement, then a pro rata portion of this award will vest. The RSUs are recognized as expense ratably over the 3-year performance period using a fair market value of the Company's common share at the date of grant and an estimated number of RSUs earned during the performance period. As of September 30, 2022, there was approximately $2.7 million of total unrecognized compensation cost related to RSUs. The cost is expected to be recognized over a weighted average period of 1.5 years. A summary of the status of the outstanding RSUs as of September 30, 2022 is presented below:
| Number of RSU Shares |  | Weighted-Average Grant-Date Fair Value
RSUs at January 1, 2022 | 90,942 |  |  | $ | 52.71 |
Granted | 35,911 |  |  | 56.42 |
Performance criteria adjustment | 12,173 |  |  | 58.63 |
Vested | (32,913) |  |  | 58.63 |
Forfeited | (5,733) |  |  | 52.83 |
RSUs at September 30, 2022 | 100,380 |  |  | $ | 54.01 |
The Company has recorded compensation costs for the RSAs and RSUs that are included in administrative and general operating expenses in the amount of $1.6 million and $1.9 million for the three months ended September 30, 2022 and 2021, respectively. For the nine months ended September 30, 2022 and 2021, the Company has recorded compensation costs for the RSAs and RSUs in the amount of $3.5 million and $4.5 million, respectively.

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