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Share-Based Payments | 3 Months Ended
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Mar. 31, 2021
Share-Based Payments and Employee Benefits |
Share-Based Payments and Employee Benefits | 11.Share-Based Payments LTIP Units and Time-Based LTIP Units In January 2021, we granted 485,753 LTIP Units with time-based vesting requirements ("Time-Based LTIP Units") to management and other employees with a weighted average grant-date fair value of $29.21 per unit that vest ratably over four years subject to continued employment. Compensation expense for these units is being recognized over a four-year period. Additionally, in January 2021, we granted 163,065 fully vested LTIP Units, with a grant-date fair value of $29.54 per unit, to certain employees who elected to receive all or a portion of their cash bonus, related to 2020 service, as LTIP Units. Compensation expense totaling $4.8 million for these LTIP Units was recognized in 2020. The aggregate grant-date fair value of these Time-Based LTIP Units and LTIP Units granted during the three months ended March 31, 2021 was $19.0 million. The LTIP Units were valued based on the closing common share price on the date of grant and the Time-Based LTIP Units were valued using Monte Carlo simulations. The following is a summary of the significant assumptions used to value the Time-Based LTIP Units: ​
​ | ​ | ​
Expected volatility |  | 39.0%
Risk-free interest rate |  | 0.1%
Post-grant restriction periods |  | 2 years
​ In April 2021, as part of their annual compensation, we granted a total of 71,792 fully vested LTIP Units to non-employee trustees with an aggregate grant-date fair value of $1.9 million. The LTIP Units may not be sold while such trustee is serving on the Board of Trustees. Performance-Based LTIP Units In January 2021, we granted 627,874 LTIP Units with performance-based vesting requirements ("Performance-Based LTIP Units") to management and other employees with a weighted average grant-date fair value of $15.14 per unit. Our Performance-Based LTIP Units have a three-year performance period. 50% of any Performance-Based LTIP Units that are earned vest at the end of the three-year performance period and the remaining 50% vest on the fourth anniversary of the date of grant, subject to continued employment. If, however, the Performance-Based LTIP Units do not achieve a positive absolute total shareholder return ("TSR") at the end of the three-year performance period, but satisfy the relative performance criteria thereof, 50% of the units that otherwise could have been earned will be forfeited, and the remaining units that are earned will vest if and when we achieve a positive TSR during the succeeding seven years, measured at the end of each quarter. In January 2021, the three-year performance period ended for the Performance-Based LTIP Units granted on February 2, 2018. Based on our relative performance and absolute TSR over the three-year performance period, 100% of the units granted were earned. The aggregate grant-date fair value of the Performance-Based LTIP Units granted during the three months ended March 31, 2021 was $9.5 million, valued using Monte Carlo simulations. Compensation expense for the Performance-Based LTIP Units is being recognized over a four-year period. The following is a summary of the significant assumptions used to value the Performance-Based LTIP Units: ​
​ | ​ | ​
Expected volatility |  | 34.0%
Dividend yield |  | 2.6%
Risk-free interest rate |  | 0.2%
​ Restricted Share Units ("RSUs") Beginning in 2021, certain non-executive employees were granted RSUs with time-based vesting requirements ("Time-Based RSUs") and RSUs with performance-based vesting requirements ("Performance-Based RSUs") as part of their annual compensation. Vesting requirements and compensation expense recognition for the Time-Based RSUs and the Performance-Based RSUs are identical to those of the Time-Based LTIP Units and Performance-Based LTIP Units. In January 2021, we granted 18,343 Time-Based RSUs with a weighted average grant-date fair value of $31.33 per unit, and 11,886 Performance-Based RSUs with a grant-date fair value of $15.14 per unit. The aggregate grant-date fair value of the RSUs granted during the three months ended March 31, 2021 was $755,000. The Time-Based RSUs were valued based on the closing price on the date of grant and the Performance-Based RSUs were valued using Monte Carlo simulations with the same significant assumptions used to value the Performance-Based LTIP Units above. Share-Based Compensation Expense The following is a summary of share-based compensation expense: ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended March 31,
​ |  | 2021 |  | 2020
​ |  | (In thousands)
Time-Based LTIP Units | ​ | $ | 4,380 | ​ | $ | 3,351
Performance-Based LTIP Units | ​ |  | 3,239 | ​ |  | 3,989
Other equity awards (1) | ​ |  | 1,463 | ​ |  | 1,549
Share-based compensation expense - other | ​ |  | 9,082 | ​ |  | 8,889
Formation Awards | ​ |  | 729 | ​ |  | 1,259
OP Units (2) | ​ |  | 2,706 | ​ |  | 6,641
LTIP Units (2) | ​ |  | 78 | ​ |  | 112
Special Performance-Based LTIP Units (3) | ​ |  | 684 | ​ |  | 671
Special Time-Based LTIP Units (3) | ​ |  | 748 | ​ |  | 758
Share-based compensation related to Formation Transaction and special equity awards (4) | ​ |  | 4,945 | ​ |  | 9,441
Total share-based compensation expense | ​ |  | 14,027 | ​ |  | 18,330
Less amount capitalized | ​ |  | (791) | ​ |  | (968)
Share-based compensation expense | ​ | $ | 13,236 | ​ | $ | 17,362
(1) | Primarily comprising compensation expense for: (i) certain employees who have elected to receive all or a portion of any cash bonus earned in the form of fully vested LTIP Units, (ii) RSUs and (iii) our ESPP.
(2) | Represents share-based compensation expense for LTIP Units and OP Units issued in the Formation Transaction, which are subject to post-Combination employment obligations.
(3) | Represents equity awards issued related to our successful pursuit of Amazon's additional headquarters in National Landing.
(4) | Included in "General and administrative expense: Share-based compensation related to Formation Transaction and special equity awards" in the accompanying statements of operations.
As of March 31, 2021, we had $57.3 million of total unrecognized compensation expense related to unvested share-based payment arrangements, which is expected to be recognized over a weighted average period of 1.9 years. ​ In April 2021, our shareholders approved an amendment to the JBG SMITH 2017 Omnibus Share Plan (the "Plan") to increase the common shares reserved under the Plan by 8.0 million.

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