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Stock-based Compensation | 3 Months Ended
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Mar. 31, 2020
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] |
Stock-based Compensation | 11. Stock-based Compensation We use share-based payments to compensate employees and non-employee directors. We recognize the cost of share-based payments under the fair-value-based method. Share-based awards include equity instruments in the form of stock options, restricted stock or restricted stock units that have included service conditions and, in certain cases, performance conditions. Our share-based awards also include share-settled performance unit awards. Share-settled performance unit awards are accounted for as equity awards. We issue shares of common stock when vested stock options are exercised, when restricted stock is granted and when restricted stock units and share-settled performance unit awards vest. Stock Options — We estimate the grant date fair values of stock options using the Black-Scholes-Merton valuation model. Volatility assumptions are based on the historic volatility of our common stock over the most recent period equal to the expected term of the options as of the date such options are granted. The expected term assumptions are based on our experience with respect to employee stock option activity. Dividend yield assumptions are based on the expected dividends at the time the options are granted. The risk-free interest rate assumptions are determined by reference to United States Treasury yields. No options were granted during the three months ended March 31, 2020 or 2019. Stock option activity from January 1, 2020 to March 31, 2020 follows:
|  |  |  |  | Weighted |
|  |  |  |  | Average |
| Underlying |  |  | Exercise Price |
| Shares |  |  | Per Share |
Outstanding at January 1, 2020 |  | 4,766,150 |  |  | $ | 20.62 |
Exercised |  | — |  |  | $ | — |
Expired |  | — |  |  | $ | — |
Outstanding at March 31, 2020 |  | 4,766,150 |  |  | $ | 20.62 |
Exercisable at March 31, 2020 |  | 4,736,150 |  |  | $ | 20.63 |
Restricted Stock — For all restricted stock awards made to date, shares of common stock were issued when the awards were made. Non-vested shares are subject to forfeiture for failure to fulfill service conditions. Non-forfeitable dividends are paid on non-vested shares of restricted stock. We use the straight-line method to recognize periodic compensation cost over the vesting period. Restricted stock activity from January 1, 2020 to March 31, 2020 follows:
|  |  |  |  | Weighted |
|  |  |  |  | Average Grant |
|  |  |  |  | Date Fair Value |
| Shares |  |  | Per Share |
Non-vested restricted stock outstanding at January 1, 2020 |  | 72,051 |  |  | $ | 21.59 |
Vested |  | (43,230 | ) |  | $ | 21.59 |
Forfeited |  | — |  |  | $ | — |
Non-vested restricted stock outstanding at March 31, 2020 |  | 28,821 |  |  | $ | 21.59 |
Restricted Stock Units — For all restricted stock unit awards made to date, shares of common stock are not issued until the units vest. Restricted stock units are subject to forfeiture for failure to fulfill service conditions and, in certain cases, performance conditions. Forfeitable dividend equivalents are accrued on certain restricted stock units that will be paid upon vesting. We use the straight-line method to recognize periodic compensation cost over the vesting period. Restricted stock unit activity from January 1, 2020 to March 31, 2020 follows:
|  |  |  |  |  |  |  |  | Weighted |
|  |  |  |  |  |  |  |  | Average Grant |
| Time |  |  | Performance |  |  | Date Fair Value |
| Based |  |  | Based |  |  | Per Share |
Non-vested restricted stock units outstanding at January 1, 2020 |  | 2,631,726 |  |  |  | 397,315 |  |  | $ | 15.81 |
Granted |  | 99,996 |  |  |  | — |  |  | $ | 10.50 |
Vested |  | (151,056 | ) |  |  | — |  |  | $ | 13.40 |
Forfeited |  | (93,174 | ) |  |  | — |  |  | $ | 14.41 |
Non-vested restricted stock units outstanding at March 31, 2020 |  | 2,487,492 |  |  |  | 397,315 |  |  | $ | 15.80 |
Performance Unit Awards. We have granted share-settled performance unit awards to certain employees (the “Performance Units”) on an annual basis since 2010. The Performance Units provide for the recipients to receive a grant of shares of common stock upon the achievement of certain performance goals during a specified period established by the Compensation Committee. The performance period for the Performance Units is the three-year period commencing on April 1 of the year of grant, except that for the Performance Units granted in 2017 the three-year performance period commenced on May 1. The performance goals for the Performance Units are tied to our total shareholder return for the performance period as compared to total shareholder return for a peer group determined by the Compensation Committee. These goals are considered to be market conditions under the relevant accounting standards and the market conditions were factored into the determination of the fair value of the respective Performance Units. For the Performance Units granted in May 2017 and April 2018, the recipients will receive a target number of shares if our total shareholder return during the performance period, when compared to the peer group, is at the 50th percentile. For the Performance Units granted in April 2019, the recipients will receive the target number of shares if our total shareholder return during the performance period, when compared to the peer group, is at the 55th percentile. If our total shareholder return during the performance period, when compared to the peer group, is at the 75th percentile or higher, then the recipients will receive two times the target number of shares. If our total shareholder return during the performance period, when compared to the peer group, is at the 25th percentile, then the recipients will only receive one-half of the target number of shares. If our total shareholder return during the performance period, when compared to the peer group, is between the 25th and target percentile, or the target and 75th percentile, then the shares to be received by the recipients will be determined using linear interpolation for levels of achievement between these points. In April 2019, 185,000 shares were issued to settle the 2016 Performance Units. For the Performance Units granted in May 2017 and April 2018, the payout is based on relative performance and does not have an absolute performance requirement. For the Performance Units granted in April 2019, the payout shall not exceed the target number of shares if our total shareholder return is negative or zero. The Performance Units granted in 2017, 2018 and 2019 have not reached the end of their respective performance periods. The total target number of shares with respect to the Performance Units for the awards granted in 2016-2019 is set forth below:
| 2019 |  |  | 2018 |  |  | 2017 |  |  | 2016 |
| Performance |  |  | Performance |  |  | Performance |  |  | Performance |
| Unit Awards |  |  | Unit Awards |  |  | Unit Awards |  |  | Unit Awards |
Target number of shares |  | 489,800 |  |  |  | 310,700 |  |  |  | 186,198 |  |  |  | 185,000 |
Because the performance units are share-settled awards, they are accounted for as equity awards and measured at fair value on the date of grant using a Monte Carlo simulation model. The fair value of the Performance Units is set forth below (in thousands):
| 2019 |  |  | 2018 |  |  | 2017 |  |  | 2016 |
| Performance |  |  | Performance |  |  | Performance |  |  | Performance |
| Unit Awards |  |  | Unit Awards |  |  | Unit Awards |  |  | Unit Awards |
Fair value at date of grant | $ | 9,958 |  |  | $ | 8,004 |  |  | $ | 5,780 |  |  | $ | 3,854 |
These fair value amounts are charged to expense on a straight-line basis over the performance period. Compensation expense associated with the Performance Units is shown below (in thousands):
| 2019 |  |  | 2018 |  |  | 2017 |  |  | 2016 |
| Performance |  |  | Performance |  |  | Performance |  |  | Performance |
| Unit Awards |  |  | Unit Awards |  |  | Unit Awards |  |  | Unit Awards |
Three months ended March 31, 2020 | $ | 830 |  |  | $ | 667 |  |  | $ | 482 |  |  | NA |
Three months ended March 31, 2019 | NA |  |  | $ | 667 |  |  | $ | 482 |  |  | $ | 321 |

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- Definition The entire disclosure for share-based payment arrangement. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 + Details
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