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Stock Incentive Plans | 3 Months Ended
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Mar. 31, 2020
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 2,883,223 shares as of March 31, 2020. 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, 2020 to March 31, 2020 is as follows:
| Number of Shares |  | Weighted- Average Grant Date Fair Value
Unvested balance at January 1, 2020 | 472,999 |  |  | $ | 10.40 |
Granted | 331,942 |  |  | 9.58 |
Vested | (229,664 | ) |  | 10.55 |
Forfeited | (11,983 | ) |  | 10.01 |
Unvested balance at March 31, 2020 | 563,294 |  |  | $ | 9.87 |
The remaining share awards are expected to vest as follows: 8,202 shares during 2020, 243,872 shares during 2021, 138,689 during 2022 and 172,531 during 2023. As of March 31, 2020, the unrecognized compensation cost related to restricted stock awards was $5.2 million and the weighted-average period over which the unrecognized compensation expense will be recorded is approximately 29 months. We recorded $0.7 million of compensation expense related to restricted stock awards for the three months ended March 31, 2020 and 2019. 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 achievement of certain performance targets. Under this framework, 50% of the PSUs are based on relative total stockholder return and 50% on 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 number of PSUs earned is limited to 100% of the PSU Target Award if the Company's total stockholder return is negative for the three-year performance period. 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. 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 hotel market share improvement is the closing price of our common stock on the grant date. On February 25, 2020, our board of directors granted 352,035 PSUs to our executive officers. The grant date fair value of the portion of the PSUs based on our relative total stockholder return was $8.52 using the assumptions of volatility of 21.4% and a risk-free rate of 1.16%. The grant date fair value of the portion of the PSUs based on hotel market share was $9.58, which was the closing stock price of our common stock on such date. A summary of our PSUs from January 1, 2020 to March 31, 2020 is as follows:
| Number of Target Units |  | Weighted- Average Grant Date Fair Value
Unvested balance at January 1, 2020 | 796,532 |  |  | $ | 11.16 |
Granted | 352,035 |  |  | 9.02 |
Additional units from dividends | 9,556 |  |  | 10.42 |
Vested (1) | (245,937 | ) |  | 11.00 |
Unvested balance at March 31, 2020 | 912,186 |  |  | $ | 9.63 |
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(1) | The number of shares of common stock earned for the PSUs vested in 2020 was equal to 123.07% of the PSU Target Award.
The remaining unvested PSUs are expected to vest as follows: 290,927 units during 2021, 269,224 units during 2022 and 352,035 during 2023. The number of shares earned upon vesting is subject to the attainment of the performance goals described above. As of March 31, 2020, the unrecognized compensation cost related to the PSUs was $5.5 million and is expected to be recognized on a straight-line basis over a weighted average period of 28 months. We recorded $0.7 million and $0.6 million of compensation expense related to the PSUs for the three months ended March 31, 2020 and 2019, respectively. LTIP Units In 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. In 2020, executive officers could elect to be granted restricted stock or LTIP units for the time-based portion of the annual long-term incentive award. LTIP units are designed to offer executives a long-term incentive comparable to restricted stock, while allowing them to enjoy 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. On February 25, 2020, our board of directors granted 80,898 LTIP units to certain of our executive officers. Other executive officers of the Company elected to receive restricted stock in lieu of LTIP units. The grant date fair value of the LTIP unit was the closing price of our common stock on the grant date. A summary of our LTIP units from January 1, 2020 to March 31, 2020 is as follows:
| Number of Units |  | Weighted- Average Grant Date Fair Value
Unvested balance at January 1, 2020 | 244,366 |  |  | $ | 10.65 |
Granted | 80,898 |  |  | 9.58 |
Vested (1) | (81,455 | ) |  | 10.65 |
Unvested balance at March 31, 2020 | 243,809 |  |  | $ | 10.29 |
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(1) | As of March 31, 2020, none of the vested LTIP units have been converted to common OP units.
The remaining unvested LTIP units are expected to vest as follows: 108,421 units during 2021, 108,422 units during 2022 and 26,966 units during 2023. As of March 31, 2020, of the 325,264 LTIP units outstanding, 81,455 LTIP units have vested. As of March 31, 2020, the unrecognized compensation cost related to LTIP unit awards was $2.4 million and the weighted-average period over which the unrecognized compensation expense will be recorded is approximately 27 months. We recorded $0.2 million and $0.1 million of compensation expense related to LTIP unit awards for the three months ended March 31, 2020 and 2019, respectively.

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