XML 38 R21.htm IDEA: XBRL DOCUMENT
v3.22.4

Share-based Compensation | 12 Months Ended
--- | ---
Dec. 31, 2022
Share-Based Payment Arrangement [Abstract] |
Share-based Compensation | Share-based Compensation Equity Incentive Plan The Ingevity Corporation 2016 Omnibus Incentive Plan, adopted on May 15, 2016, grants certain corporate officers, key employees, and non-employee directors of Ingevity and subsidiaries different forms of benefits, including stock options, RSU, DSU, and PSU. The Ingevity Corporation 2016 Omnibus Incentive Plan has a maximum shares reserve of 4,000,000 for the grant of equity awards. As of December 31, 2022, 2,930,182 shares under the Ingevity Corporation 2016 Omnibus Incentive Plan are still available for grants, assuming that Ingevity performs at the target performance level in each year of the three-year performance period for PSU awards. The Leadership Development and Compensation Committee of Ingevity's Board of Directors ("Compensation Committee") determines the long-term incentive mix, including stock options, RSUs, and PSUs, and may authorize new grants annually. We typically issue new common shares for the vesting of awards under our equity incentive plan. Employee Stock Purchase Plan On December 9, 2016, our Compensation Committee and Board of Directors approved the 2017 Ingevity Corporation Employee Stock Purchase Plan ("ESPP"), which was approved by Ingevity’s stockholders on April 27, 2017. The ESPP allows eligible employee participants to purchase no more than 5,000 shares of our common stock at a discount through payroll deductions up to 15 percent of their compensation deducted during the purchase period. However, no participant shall be permitted to purchase common stock with a value greater than $25,000 in any calendar year. The ESPP is a tax-qualified plan under Section 423 of the Internal Revenue Code. The ESPP consists of a one-month enrollment period preceding the three-month purchase period. Employees purchase shares in each purchase period at 85 percent of the market value of our common stock at either the beginning of the offering period or the end of the purchase period, whichever price is lower. Under the ESPP, a total of 250,000 shares of Ingevity's common stock are reserved and authorized for issuance to participating U.S. employees, as defined by the ESPP, which excludes certain officers of Ingevity. We typically issue treasury shares for issuances under the ESPP. As of December 31, 2022, 56,873 shares under the ESPP are still available for issuance. The initial offering period under the ESPP began on July 1, 2017. During fiscal year 2022, there were 48,389 shares issued under the ESPP at an average price of $58.93. Our share-based compensation and ESPP expense is included in the table below.
| Years Ended December 31,
In millions | 2022 |  | 2021 |  | 2020
Stock option expense | $ | 1.5 |  |  | $ | 1.7 |  |  | $ | 0.6 |
ESPP expense | 0.7 |  |  | 0.6 |  |  | 0.5 |
RSU, DSU and PSU expense | 13.9 |  |  | 10.0 |  |  | 7.3 |
Total share-based compensation expense (1) | $ | 16.1 |  |  | $ | 12.3 |  |  | $ | 8.4 |
Income tax benefit | (3.1) |  |  | (2.3) |  |  | (1.5) |
Total share-based compensation expense, net of tax | $ | 13.0 |  |  | $ | 10.0 |  |  | $ | 6.9 |
_______________ (1) Amounts reflected in "Selling, general, and administrative expenses" on the consolidated statements of operations. Stock Options All stock options vest in accordance with vesting conditions set by the Compensation Committee. Stock options granted to date have vesting periods of one to three years from the date of grant. Incentive and non-qualified options granted under the Plan expire no later than 10 years from the grant date. Expense related to stock options granted is based on the assumptions shown in the table below:
| Years Ended December 31,
Weighted-average assumptions used to calculate expense for stock options | 2022 |  | 2021 |  | 2020
Risk-free interest rate | 1.8 | % |  | 1.0 | % |  | 1.0 | %
Average life of options (years) | 6.0 |  | 6.5 |  | 6.5
Volatility | 40.0 | % |  | 46.0 | % |  | 33.5 | %
Dividend yield | — |  |  | — |  |  | — |
Fair value per stock option | $ | 28.80 |  |  | $ | 33.07 |  |  | $ | 15.87 |
The following table summarizes Ingevity's stock option activity.
| Number of Options (in thousands) |  | Weighted-average exercise price (per share) |  | Weighted-average remaining contractual term (years) |  | Aggregate intrinsic value (in thousands)
Outstanding, December 31, 2021 | 338 |  |  | $ | 61.34 |  |  | 6.7 |  | $ | 5,366 |
Granted | 74 |  |  | 68.23 |  |  |  |  |
Exercised | (33) |  |  | 46.79 |  |  |  |  |
Forfeited | (44) |  |  | 69.94 |  |  |  |  |
Cancelled | — |  |  | — |  |  |  |  |
Outstanding, December 31, 2022 | 335 |  |  | $ | 63.18 |  |  | 6.1 |  | $ | 4,100 |
Exercisable, December 31, 2022 | 224 |  |  | $ | 61.94 |  |  | 4.9 |  | $ | 3,568 |
The aggregate intrinsic values in the table above represent the total pre-tax intrinsic value (the difference between Ingevity's closing stock price on the last trading day of the period and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their in-the-money options at each year end. The amount changes based on the fair market value of Ingevity's stock. As of December 31, 2022, $1.1 million of total unrecognized compensation expense related to stock options is expected to be recognized over a weighted-average period of one year. Restricted Stock Units, Deferred Stock Units, and Performance-based Restricted Stock Units All RSUs, DSUs, and PSUs vest in accordance with vesting conditions set by the Compensation Committee. RSUs and DSUs granted to date have vesting periods ranging from less than one year to three years from the date of grant. PSUs granted to date have vesting periods of three years from the date of grant, including grants that have a cumulative three-year performance period, subject to the satisfaction of the applicable performance goals established for the respective grant. We periodically assess the probability of achievement of the performance criteria and adjust the amount of compensation expense accordingly. Compensation expense is recognized over the vesting period and adjusted for the probability of achievement of the performance criteria. The following table summarizes Ingevity's RSUs, DSUs, and PSUs activity.
| RSUs and DSUs |  | PSUs
| Number of Units (in thousands) (1) |  | Weighted average grant date fair value (per share) |  | Number of Units (in thousands) (1) |  | Weighted average grant date fair value (per share)
Nonvested, December 31, 2021 | 243 |  |  | $ | 67.36 |  |  | 166 |  |  | $ | 65.91 |
Granted | 179 |  |  | 66.42 |  |  | 83 |  |  | 68.23 |
Vested | (95) |  |  | 71.62 |  |  | — |  |  | — |
Forfeited | (26) |  |  | 63.32 |  |  | (56) |  |  | 82.96 |
Nonvested, December 31, 2022 (2) | 301 |  |  | $ | 6.04 |  |  | 193 |  |  | $ | 61.88 |
_______________ (1) The number granted represents the number of shares issuable upon vesting of RSUs and DSUs. For PSUs, the number granted represents the number of shares issuable upon vesting, assuming that Ingevity performs at the target performance level in each year of the three-year performance period. (2) Excludes 5,715 non-employee director shares that were vested but unissued at December 31, 2022. As of December 31, 2022, $15.6 million of unrecognized share-based compensation expense related to RSUs, DSUs and PSUs is expected to be recognized over a weighted-average period of 1.2 years.

X
- Definition The entire disclosure for share-based payment arrangement. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=128089324&loc=d3e5070-113901 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI https://asc.fasb.org/topic&trid=2228938 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (l) -URI https://asc.fasb.org/extlink&oid=128089324&loc=d3e5070-113901 Reference 4: http://www.xbrl.org/2003/role/exampleRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (a)(1) -URI https://asc.fasb.org/extlink&oid=128089324&loc=d3e5070-113901 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (h)(2)(i) -URI https://asc.fasb.org/extlink&oid=128089324&loc=d3e5070-113901 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (h)(2) -URI https://asc.fasb.org/extlink&oid=128089324&loc=d3e5070-113901 + Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsSharebasedPaymentsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration