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Stock-Based Compensation | 12 Months Ended
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Dec. 31, 2017
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] |
Stock-Based Compensation | Stock-Based Compensation The Company’s 2010 Incentive Plan permits the Company’s board of directors (“the Board”) to grant, among other things, restricted stock, restricted stock units and performance-based awards. At our annual meeting of stockholders on May 24, 2017, stockholders approved an amended and restatement of the 2010 Incentive Plan (the “2010 Plan”), which included an increase in the maximum number of shares that may be issued or awarded. Each restricted share, restricted stock unit and common share issued reduces the share reserve by 5.14 shares. As of December 31, 2017, 3,961,867 common shares were available for grant under the 2010 Plan. The calculation of shares available for grant is determined after taking into account unvested restricted stock, unvested RSUs, awards under our one-time retention performance-based awards, and awards under our outstanding outperformance programs, assuming the maximum bonus pool eligible ultimately is earned and based on a stock price of $34.25. The Board awards restricted shares to non-employee Board members on an annual basis as part of such Board members’ annual compensation and to newly elected non-employee board members in accordance with the Non-Employee Director Compensation Program. The time-based awards are generally issued in the second quarter, in conjunction with the director’s election to the Board and the individual share awards vest in equal annual installments over the applicable service vesting period, which is three years. The Board awards time-based restricted shares to employees on an annual basis as part of the employees’ annual compensation. The time-based awards are generally issued in the fourth quarter, and the individual share awards vest in equal annual installments over the applicable service vesting period, which is generally three years. Additionally, certain restricted share awards are subject to a mandatory holding period upon vesting if the grantee is a named executive officer. The compensation committee of our Board (“Compensation Committee”) annually adopts a Hudson Pacific Properties, Inc. Outperformance Program (“OPP Plan”) under our 2010 Plan. With respect to OPP Plan awards granted through 2017, to the extent an award is earned following the completion of a three-year performance period, 50% of the earned award will vest in full at the end of the three-year performance period and 25% of the earned award will vest in equal annual installments over the two years thereafter, subject to the participant’s continued employment. OPP Plan awards are settled in common stock and in the case of certain executives, awards are settled in performance units in our operating partnership. In February 2017, the Compensation Committee adopted the 2017 OPP Plan. The 2017 OPP Plan is substantially similar to the previous OPP Plans except for (i) the performance period is January 1, 2017 to December 31, 2019 (ii) the maximum bonus pool is $20.0 million and (iii) the two-year post-performance vesting period was replaced with a two-year mandatory holding period upon vesting. In December 2015, the Compensation Committee of the Board awarded a one-time special retention award to certain executives. The grants consist of time-based awards and performance-based awards. The time-based awards vest in equal 25% installments over a four-year period, subject to the participant’s continued employment. The performance-based awards vest over a four-year period, subject to the achievement of applicable performance goals and the participant’s continued employment. Time-Based Awards The stock-based compensation is valued based on the quoted closing price of the Company’s common stock on the applicable grant date and discounted for the hold restriction in accordance with ASC 718. The stock-based compensation is amortized through the final vesting period on a straight-line basis. Forfeitures of awards are recognized as they occur. Performance-Based Awards OPP Plan An award under the OPP Plan is ultimately earned to the extent the Company outperforms a predetermined total shareholder return (“TSR”) goal and/or achieves goals with respect to the outperformance of its peers in a particular REIT index. The ultimate aggregate award cannot exceed the predetermined maximum bonus pool. The following table outlines key components of the 2017 and 2016 OPP Plans:
| 2017 OPP Plan |  | 2016 OPP Plan
Maximum bonus pool, in millions | $20.0 |  | $17.5
Performance period | 1/1/2017 to 12/31/2019 |  | 1/1/2016 to 12/31/2018
The stock-based compensation costs of the OPP Plans were valued in accordance with ASC 718, utilizing a Monte Carlo simulation to estimate the probability of the performance vesting conditions being satisfied. The stock-based compensation is amortized through the final vesting period under a graded vesting expense recognition schedule. Forfeitures of awards are recognized as they occur. The per unit fair value of OPP award granted was estimated on the date of grant using the following assumptions in the Monte Carlo valuation:
| 2017 |  | 2016 |  | 2015
Expected price volatility for the Company | 24.00% |  | 24.00% |  | 22.00%
Expected price volatility for the particular REIT index | 17.00% |  | 17.00% |  | 22.00%
Risk-free rate | 1.47% |  | 1.09% |  | 1.13%
Dividend yield | 2.30 |  | 2.40 |  | 1.50
One-Time Retention Awards At the end of each year in the four-year performance period and over the four-year performance period, the ultimate award is earned if the Company outperforms a predetermined TSR goal and/or achieves goals with respect to its outperformance of its peers in a particular REIT index. The stock-based compensation costs were valued in accordance with ASC 718, utilizing a Monte Carlo simulation to estimate the probability of the performance vesting conditions being satisfied. The stock-based compensation is amortized through the final vesting period under a graded vesting expense recognition schedule. Forfeitures of awards are recognized as they occur. The per unit fair value of one-time retention award granted was estimated on the date of grant using the following assumptions in the Monte Carlo valuation:
| Assumptions
Expected price volatility for the Company | 23.00%
Expected price volatility for the particular REIT index | 18.00%
Risk-free rate | 1.63%
Dividend yield | 3.20
Summary of Unvested Share Activity The following table summarizes the activity and status of all unvested awards:
|  | 2017 |  | 2016 |  | 2015
|  | Shares |  | Weighted-Average Grant-Date Fair Value |  | Shares |  | Weighted-Average Grant-Date Fair Value |  | Shares |  | Weighted-Average Grant-Date Fair Value
Unvested at January 1 |  | 887,179 |  |  | $ | 31.09 |  |  | 827,950 |  |  | $ | 28.92 |  |  | 543,707 |  |  | $ | 26.43 |
Granted |  | 918,884 |  |  | 34.37 |  |  | 489,826 |  |  | 30.95 |  |  | 629,504 |  |  | 29.01 |
Vested |  | (705,508 | ) |  | 31.42 |  |  | (430,597 | ) |  | 26.75 |  |  | (335,544 | ) |  | 24.80 |
Canceled |  | (13,369 | ) |  | 32.14 |  |  | — |  |  | — |  |  | (9,717 | ) |  | 38.17 |
Unvested at December 31 |  | 1,087,186 |  |  | $ | 33.64 |  |  | 887,179 |  |  | $ | 31.09 |  |  | 827,950 |  |  | $ | 28.92 |
Year Ended December 31, |  | Non-Vested Shares Issued |  | Weighted Average Grant-Date Fair Value |  | Vested Shares |  | Total Vest-Date Fair Value (in thousands)
2017 |  | 918,884 |  |  | $ | 34.37 |  |  | (705,508 | ) |  | $ | 24,155 |
2016 |  | 489,826 |  |  | 30.95 |  |  | (430,597 | ) |  | 14,736 |
2015 |  | 629,504 |  |  | 29.01 |  |  | (335,544 | ) |  | 9,606 |
Share-based Compensation Recorded The following table presents the classification and amount recognized for stock-based compensation related to the Company’s awards:
| For the Year Ended December 31,
| 2017 |  | 2016 |  | 2015
Expensed stock compensation(1) | $ | 15,079 |  |  | $ | 14,144 |  |  | $ | 8,421 |
Capitalized stock compensation(2) | 836 |  |  | 510 |  |  | 411 |
Total stock compensation(3) | $ | 15,915 |  |  | $ | 14,654 |  |  | $ | 8,832 |
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(1) | Amounts are recorded in general and administrative expenses in the Consolidated Statements of Operations.
(2) | Amounts are recorded in deferred leasing costs and lease intangible assets, net and investment in real estate, at cost in the Consolidated Balance Sheets.
(3) | Amounts are recorded in additional paid-in capital and non-controlling interest—units in the operating partnership in the Consolidated Balance Sheets.
As of December 31, 2017, total unrecognized compensation cost related to unvested share-based payments was $31.2 million, and is expected to be recognized over a weighted-average period of two years.

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- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -URI http://asc.fasb.org/subtopic&trid=2208855 + Details
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