Stock-Based Compensation

3 Months Ended

Mar. 31, 2021

Share-based Payment Arrangement [Abstract]

Equity-Based Compensation

The following table summarizes the number of shares of common stock authorized for issuance under the 2019 Plan, the number of stock-based awards granted (net of expired or cancelled awards) under the 2019 Plan and the number of shares of common stock available for the grant of stock-based awards under the 2019 Plan:


Common stock authorized			11,000,000
Stock-based awards, including restricted stock and stock options granted, net of expired or cancelled awards			(2,668,950)
Common stock available for grant of stock-based awards as of March 31, 2021			8,331,050

In addition, vested and unvested options to purchase 2,092,188 shares of common stock and 3,008,209 shares of unvested restricted stock awarded under the 2006 Plan were outstanding as of March 31, 2021.

Total equity-based compensation for the three months ended March 31, 2021 and 2020 is as follows:


	Three Months Ended March 31,
	2021		2020
Restricted stock	$	4,509	$	4,864
Stock options	1,030		822
Total	$	5,539	$	5,686

Equity-based compensation is included in operating expenses on the Company’s Condensed Consolidated Statements of Income.

On June 30, 2020, pursuant to his employment agreement with the Company, Steve Madden, the Company's founder and Creative and Design Chief, was granted an option to purchase 225,000 shares of the Company's common stock at an exercise price of $24.83 per share, which option vests in four equal installments commencing on September 30, 2020 and ending on June 30, 2021. As of March 31, 2021, Mr. Madden had unvested options to purchase 281,250 shares of the Company's common stock and 2,560,543 restricted shares of the Company's common stock.

Stock Options

Cash proceeds and intrinsic values related to total stock options exercised during the three months ended March 31, 2021 and 2020 are as follows:


	Three Months Ended March 31,
	2021		2020
Proceeds from stock options exercised	$	1,554	$	874
Intrinsic value of stock options exercised	$	867	$	737

During the three months ended March 31, 2021, approximately 356,603 shares of options vested with a weighted average exercise price of $25.55. During the three months ended March 31, 2020, approximately 388,479 shares of options vested with a weighted average exercise price of $26.04. As of March 31, 2021, there were unvested options relating to 400,713 shares of common stock outstanding with a total of $2,635 of unrecognized compensation cost and an average vesting period of 1.2 years.

The Company uses the Black-Scholes-Merton option-pricing model to estimate the fair value of options granted, which requires several assumptions. The expected term of the options represents the estimated period of time until exercise and is based on the historical experience of similar awards. Expected volatility is based on the historical volatility of the Company’s common stock. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of the grant. The dividend yield is based on the Company's annualized dividend per share amount divided by the Company's stock price. The following weighted average assumptions were used for stock options granted during the three months ended March 31, 2021 and 2020:


	Three Months Ended March 31,
	2021	2020
Volatility	48.4%	33.9% to 37.6%
Risk free interest rate	0.2%	0.5% to 1.6%
Expected life in years	3.0	3.0 to 5.0
Dividend yield	1.8%	1.5%
Weighted average fair value	$10.33	$10.22

Activity relating to stock options granted under the Company’s plans during the three months ended March 31, 2021 is as follows:


	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding at January 1, 2021	2,674,000	$	26.80
Granted	11,000	33.60
Exercised	(65,000)	23.92
Forfeited	—	—
Outstanding at March 31, 2021	2,620,000	$	26.90	3.0 years	$	—
Exercisable at March 31, 2021	2,219,000	$	26.76	2.9 years	$	—

Restricted Stock

The following table summarizes restricted stock activity during the three months ended March 31, 2021 and 2020:


	Three Months Ended March 31,
	2021			2020
	Number of Shares	Weighted Average Fair Value at Grant Date		Number of Shares	Weighted Average Fair Value at Grant Date
Outstanding at January 1,	3,651,000	$	20.81	4,427,000	$	19.84
Granted	187,000	38.10		366,000	34.69
Vested	(223,000)	28.50		(219,000)	27.15
Forfeited	(22,000)	35.82		(9,000)	32.84
Outstanding at March 31,	3,593,000	$	21.14	4,565,000	$	20.66

As of March 31, 2021, the Company had $52,106 of total unrecognized compensation cost related to restricted stock awards granted under the 2019 Plan and the 2006 Plan. This cost is expected to be recognized over a weighted average period of 4.2 years. The Company determines the fair value of its restricted stock awards based on the market price of its common stock on the date of grant.