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Stock Incentive Plans | 12 Months Ended
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Dec. 31, 2019
Share-based Payment Arrangement [Abstract] |
Stock Incentive Plans | Stock Incentive Plans We are authorized to issue up to 6,082,664 shares of our common stock under our 2016 Equity Incentive Plan (the “2016 Plan”), of which we have issued or committed to issue 1,351,686 shares as of December 31, 2019. In addition to these shares, additional shares of common stock could be issued in connection with the performance stock unit awards as further described below. Restricted Stock Awards Restricted stock awards issued to our officers and employees generally vest over a three-year period from the date of the grant based on continued employment. We measure compensation expense for the restricted stock awards based upon the fair market value of our common stock at the date of grant. Compensation expense is recognized on a straight-line basis over the vesting period and is included in corporate expenses in the accompanying consolidated statements of operations. A summary of our restricted stock awards from January 1, 2017 to December 31, 2019 is as follows:
| Number of Shares |  | Weighted- Average Grant Date Fair Value
Unvested balance at January 1, 2017 | 567,540 |  |  | $ | 10.62 |
Granted | 324,502 |  |  | 11.19 |
Forfeited | (16,669 | ) |  | 10.80 |
Vested | (244,411 | ) |  | 11.29 |
Unvested balance at December 31, 2017 | 630,962 |  |  | 10.66 |
Granted | 349,091 |  |  | 10.19 |
Forfeited | (51,061 | ) |  | 10.44 |
Vested | (287,148 | ) |  | 11.02 |
Unvested balance at December 31, 2018 | 641,844 |  |  | 10.25 |
Granted | 162,806 |  |  | 10.38 |
Forfeited | (21,534 | ) |  | 10.37 |
Vested | (310,117 | ) |  | 10.08 |
Unvested balance at December 31, 2019 | 472,999 |  |  | $ | 10.40 |
The remaining share awards are expected to vest as follows: 237,866 during 2020, 139,152 during 2021, 32,005 during 2022, and 63,976 during 2023. As of December 31, 2019, the unrecognized compensation cost related to restricted stock awards was $2.9 million and the weighted-average period over which the unrecognized compensation expense will be recorded is approximately 22 months. For the years ended December 31, 2019, 2018, and 2017, we recorded $2.6 million, $3.1 million and $3.1 million, respectively, of compensation expense related to restricted stock awards. Performance Stock Units Performance stock units (“PSUs”) are restricted stock units that vest three years from the date of grant. Each executive officer is granted a target number of PSUs (the “PSU Target Award”). The actual number of shares of common stock issued to each executive officer is based on the Company’s performance as measured by two metrics: (1) relative total stockholder return and (2) hotel market share improvement. The achievement of certain levels of total stockholder return relative to the total stockholder return of a peer group of publicly-traded lodging REITs is measured over a three-year performance period. There is no payout of shares of our common stock if our total stockholder return falls below the 30 th percentile of the total stockholder returns of the peer group. The maximum number of shares of common stock issued to an executive officer is equal to 150% of the PSU Target Award and is earned if our total stockholder return is equal to or greater than the 75 th percentile of the total stockholder returns of the peer group. The improvement in market share for each of our hotels is measured over a three-year performance period based on a report prepared for each hotel by STR Global, a well-recognized and universally accepted benchmarking service for the hospitality industry. The ratio of total PSUs issued to executive officers is divided between the two metrics as follows:
Grant Year |  | Vesting Year |  | Total Shareholder Return |  | Hotel Market Share
2014 |  | 2017 |  | 100 | % |  | — | %
2015 |  | 2018 |  | 100 | % |  | — | %
2016 |  | 2019 |  | 75 | % |  | 25 | %
2017 |  | 2020 |  | 50 | % |  | 50 | %
2018 |  | 2021 |  | 50 | % | (1) | 50 | %
2019 |  | 2022 |  | 50 | % | (1) | 50 | %
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(1) | The number of PSUs to be earned is limited to target if the Company's total stockholder return is negative for the performance period.
We measure compensation expense for the PSUs based upon the fair market value of the award at the grant date. Compensation expense is recognized on a straight-line basis over the three-year performance period and is included in corporate expenses in the accompanying consolidated statements of operations. The grant date fair value of the portion of the PSUs based on our relative total stockholder return is determined using a Monte Carlo simulation performed by a third-party valuation firm. The grant date fair value of the portion of the PSUs based on improvement in market share for each of our hotels is the closing price of our common stock on the grant date. The determination of the grant-date fair values of outstanding awards based on our relative total stockholder return included the following assumptions:
Award Grant Date |  | Volatility |  | Risk-Free Rate |  | Fair Value at Grant Date
February 26, 2017 |  | 26.7 | % |  | 1.46 | % |  | $ | 10.89 |
March 2, 2018 |  | 26.9 | % |  | 2.40 | % |  | $ | 9.52 |
April 2, 2018 |  | 26.9 | % |  | 2.37 | % |  | $ | 9.00 |
March 1, 2019 |  | 24.3 | % |  | 2.54 | % |  | $ | 9.68 |
A summary of our PSUs from January 1, 2017 to December 31, 2019 is as follows:
| Number of Units |  | Weighted- Average Grant Date Fair Value
Unvested balance at January 1, 2017 | 686,684 |  |  | $ | 10.65 |
Granted | 266,009 |  |  | 11.04 |
Additional units from dividends | 33,478 |  |  | 11.17 |
Vested (1) | (200,374 | ) |  | 12.15 |
Unvested balance at December 31, 2017 | 785,797 |  |  | 10.42 |
Granted | 293,111 |  |  | 9.82 |
Additional units from dividends | 35,197 |  |  | 11.24 |
Vested (2) | (218,514 | ) |  | 11.98 |
Forfeited | (113,668 | ) |  | 9.86 |
Unvested balance at December 31, 2018 | 781,923 |  |  | 11.19 |
Granted | 296,050 |  |  | 10.14 |
Additional units from dividends | 40,662 |  |  | 10.00 |
Vested (3) | (251,375 | ) |  | 8.80 |
Forfeited | (70,728 | ) |  | 9.93 |
Unvested balance at December 31, 2019 | 796,532 |  |  | $ | 11.16 |
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(1) | There was no payout of shares of our common stock for PSUs that vested on February 27, 2017, as our total stockholder return fell below the 30th percentile of the total stockholder returns of the peer group over the three-year performance period.
(2) | The number of shares of common stock earned for the PSUs vested in 2018 was equal to 51.75% of the PSU Target Award
(3) | The number of shares of common stock earned for the PSUs vested in 2019 was equal to 74.33% of the PSU Target Award.
The remaining unvested target units are expected to vest as follows: 243,022 during 2020, 287,477 during 2021 and 266,033 during 2022. As of December 31, 2019, the unrecognized compensation cost related to the PSUs was $3.0 million and is expected to be recognized on a straight-line basis over a period of 21 months. For the years ended December 31, 2019, 2018, and 2017, we recorded approximately $2.4 million, $1.9 million, and $2.5 million, respectively, of compensation expense related to the PSUs. The compensation expense recorded for the year ended December 31, 2018 includes the reversal of $1.0 million of previously recognized compensation expense resulting from the forfeiture of PSUs by our former Executive Vice President and Chief Financial Officer. LTIP Units During the first quarter of 2019, instead of granting restricted stock for the time-based portion of the annual long-term incentive award, we granted LTIP units to our executive officers. LTIP units are designed to offer executives a long-term incentive comparable to restricted stock, while allowing them a more favorable income tax treatment. Each LTIP unit awarded is deemed equivalent to an award of one share of common stock reserved under the 2016 Plan. At the time of award, LTIP units do not have full economic parity with common OP units, but can achieve such parity over time upon the occurrence of specified events in accordance with partnership tax rules. A summary of our LTIP units from January 1, 2019 to December 31, 2019 is as follows:
| Number of Units |  | Weighted- Average Grant Date Fair Value
Unvested balance at January 1, 2019 | — |  |  | $ | — |
Granted | 281,925 |  |  | 10.65 |
Forfeited | (37,559 | ) |  | 10.65 |
Unvested balance at December 31, 2019 | 244,366 |  |  | $ | 10.65 |
During the year ended December 31, 2019, we granted 281,925 LTIP units to executive officers, which had a weighted-average grant date fair value of $10.65 per unit. There are currently no vested LTIP units outstanding. The LTIP units are expected to vest ratably in 2020, 2021, and 2022. As of December 31, 2019, the unrecognized compensation cost related to LTIP unit awards was $1.9 million and the weighted-average period over which the unrecognized compensation expense will be recorded is approximately 26 months. We recorded $0.7 million of compensation expense related to LTIP unit awards for the year ended December 31, 2019. We did no t record any compensation expense related to LTIP unit awards during 2018 or 2017.

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