Stock-Based Compensation Plans

6 Months Ended

Jun. 30, 2020

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

NOTE 14 – STOCK-BASED COMPENSATION PLANS

The Company grants stock options and stock equivalent units (“SEUs”) from time to time as a long-term performance incentive. In certain cases the grants are subject to performance conditions such as the Company’s stock price. Where performance conditions apply the Monte Carlo simulation model is used to determine the fair values. Otherwise the Black-Scholes model is used to determine the fair values.

Stock option plans

The following table summarizes the transactions of the Company’s stock option plans for the six months ended June 30, 2020:


	Number of Options			Weighted Average Exercise Price		Weighted Average Grant-Date Fair Value
Outstanding at December 31, 2019		504,459		$	33.05	$	41.35
Granted - at discount		63,950		$	1.11	$	76.80
- at market value		10,419		$	95.70	$	18.69
Exercised		(81,860	)	$	9.73	$	52.31
Forfeited		(13,161	)	$	22.43	$	45.20

Outstanding at June 30, 2020		483,807		$	34.41	$	43.59

At June 30, 2020, there were 43,638 stock options that were exercisable, of which 8,779 had performance conditions attached.

The stock option compensation cost for the first six months of 2020 was $2.8 million (first six months of 2019 – $3.2 million). The total intrinsic value of options exercised in the first six months of 2020 was $4.6 million (first six months of 2019 – $2.7 million).

The total compensation cost related to

non-vested

stock options not yet recognized at June 30, 2020 was $10.2 million and this cost is expected to be recognized over the weighted-average period of 1.93 years.

Stock equivalent units

The following table summarizes the transactions of the Company’s SEUs for the six months ended June 30, 2020:


	Number of SEUs			Weighted Average Exercise Price		Weighted Average Grant-Date Fair Value
Outstanding at December 31, 2019		390,816		$	3.69	$	59.91
Granted - at discount		108,607		$	0.00	$	76.86
- at market value		3,634		$	95.70	$	18.69
Exercised		(88,557	)	$	0.86	$	60.55
Forfeited		(17,036	)	$	0.86	$	65.38

Outstanding at June 30, 2020		397,464		$	4.27	$	63.79

At June 30, 2020 there were 57,696 SEUs that are exercisable, of which 51,164 had performance conditions attached.

The charges for SEUs are spread over the life of the award subject to a revaluation to fair value each quarter. The revaluation may result in a charge or a credit to the income statement in the quarter dependent upon our share price and other performance criteria.

The SEU compensation for the first six months of 2020 was a $3.0 million credit (first six months of 2019 – $11.8 million charge). The total intrinsic value of SEUs exercised in the first six months of 2020 was $6.1 million (first six months of 2019 – $7.1 million).

The weighted-average remaining vesting period of

non-vested

SEUs is 2.20 years.