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Stockholders' Equity
 3 Months Ended
Mar. 31, 2013
Stockholders' Equity [Abstract]  
Stockholders' Equity
5.                Stockholders’ Equity
 
Authorized stock
 
The Company has authorized 20,000,000 shares of common stock, par value $0.01, of which 11,387,299 and 10,810,872 shares were issued and outstanding as of December 31, 2012 and March 31, 2013, respectively. The Company also has authorized 8,000,000 shares of preferred stock, none of which has been issued or outstanding since 2004. In 2012, the Company paid an annual cash dividend of $4.00 per share, or $1.00 per share quarterly. No dividend was paid in the first quarter of 2013.
 
Stock-based compensation plans
 
The Strayer Education Inc. 2011 Equity Compensation Plan (the “Plan”) provides for the granting of restricted stock, restricted stock units, stock options intended to qualify as incentive stock options, stock options that do not qualify as incentive stock options, and other forms of equity compensation and performance-based awards to employees, officers and directors of the Company, or to a consultant or advisor to the Company, at the discretion of the Board of Directors. Vesting provisions are at the discretion of the Board of Directors. Options may be granted at option prices based at or above the fair market value of the shares at the date of grant. The maximum term of the awards granted under the Plan is ten years. Dividends paid on unvested restricted stock are reimbursed to the Company if the recipient forfeits his or her shares as a result of termination or employment, prior to vesting in the award.
 
 Restricted Stock and Restricted Stock Units
 
In February 2013, the Company’s Board of Directors approved grants of 165,712 shares of restricted stock to certain individuals. These shares, which vest over a three- to five-year period, were granted pursuant to the Plan. The Company’s stock price closed at $62.28 on the date of these restricted stock grants. In March 2013, outstanding awards of 200,000 restricted shares were converted to restricted stock units.
 
The table below sets forth the restricted stock and restricted stock units activity for the three months ended March 31, 2013:
 
   
Number
of shares
or units
    
Weighted-
average grant
price
  
Balance, December 31, 2012
    
434,439
    
$
178.88
  
Grants
    
165,712
    
$
62.28
  
Vested shares
    
(32,568
)
  
$
189.61
  
Forfeitures
    
(47,054
)
  
$
215.71
  
Balance, March 31, 2013
    
520,529
    
$
137.76
  
 
Stock Options
 
In February 2013, the Company’s Board of Directors granted an option to purchase 100,000 shares of the Company’s common stock at an exercise price of $51.95 per share.  The award vests in its entirety two years from the date of grant and expires eight years from the date of grant.  The weighted average fair value of the options granted in the three months ended March 31, 2013, is estimated at $22.09 per share on the date of grant using the Black-Scholes option pricing model with the following assumptions: risk-free interest rate of 0.877%; an expected life of five years; volatility of 48.49%; and dividend yield of 0% over the expected life of the option.
 
The table below sets forth the stock option activity for the three months ended March 31, 2013 and other stock option information at March 31, 2013:
 
   
Number of
shares
    
Weighted-average exercise price
    
Weighted-average remaining
contractual
life (yrs.)
    
Aggregate intrinsic 
value(¹)
(in thousands)
  
Balance, December 31, 2012
    
100,000
    
$
107.28
      
0.1
    
 $
—
  
Grants
    
100,000
      
51.95
                  
Exercises
    
—
      
—
                  
Forfeitures/Expirations
    
(100,000
)
    
107.28
                  
Balance, March 31, 2013
    
100,000
    
$
51.95
      
7.8
    
 $
—
  
Exercisable, March 31, 2013
    
—
    
$
—
      
—
      
—
  
_______
(1)  
The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the Company’s closing stock price on the respective trading day and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holder had the options been exercised on the respective trading day. The amount of intrinsic value will change based on the fair market value of the Company’s common stock.
 
Valuation and Expense Information under Stock Compensation Topic ASC 718
 
At March 31, 2013, total stock-based compensation cost which has not yet been recognized was $44.4 million, all for unvested stock and stock option awards. This cost is expected to be recognized over the next 60 months on a weighted-average basis. Awards of approximately 344,000 shares of restricted stock and restricted stock units are subject to performance conditions. The accrual for stock-based compensation for performance awards is based on the Company’s estimates that such performance criteria are probable of being achieved. Such a determination involves significant judgment surrounding future operating performance of the Company. If the performance targets are not reached during the vesting period, or it is determined it is more likely than not that the performance criteria will not be achieved, related compensation expense is adjusted. 
 
The following table summarizes the stock-based compensation expense recorded for the three months ended March 31, 2012 and 2013 by expense line item (in thousands):
 
   
For the three months
ended March 31,
  
   
2012
    
2013
  
Instruction and educational support
  
$
671
    
$
1,097
  
Marketing
    
—
      
—
  
Admissions advisory
    
—
      
—
  
General and administration
    
1,719
      
1,153
  
        Stock-based compensation expense included in operating expense
    
2,390
      
2,250
  
Tax benefit
    
944
      
895
  
Stock-based compensation expense, net of tax
  
$
1,446
    
$
1,355
  
 
During the three months ended March 31, 2012 and 2013, the Company recognized a tax shortfall related to share-based payment arrangements of $0.7 million and $3.3 million, respectively. No stock options were exercised during the three months ended March 31, 2012 or 2013.