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Share-Based Compensation | 9 Months Ended
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Sep. 30, 2018
Share-based Compensation [Abstract] |
Share-Based Compensation | Share-Based Compensation As of September 30, 2018, the Company has outstanding awards under the CBL & Associates Properties, Inc. 2012 Stock Incentive Plan ("the 2012 Plan"), which was approved by the Company's shareholders in May 2012. The 2012 Plan permits the Company to issue stock options and common stock to selected officers, employees and non-employee directors of the Company up to a total of 10,400,000 shares. As the primary operating subsidiary of the Company, the Operating Partnership participates in and bears the compensation expense associated with the Company's share-based compensation plan. Restricted Stock Awards The Company may make restricted stock awards to independent directors, officers and its employees under the 2012 Plan. These awards are generally granted based on the performance of the Company and its employees. None of these awards have performance requirements other than a service condition of continued employment, unless otherwise provided. Compensation expense is recognized on a straight-line basis over the requisite service period. Share-based compensation expense related to the restricted stock awards was $787 and $812 for the three months ended September 30, 2018 and 2017, respectively, and $3,263 and $3,175 for the nine months ended September 30, 2018 and 2017, respectively. Share-based compensation cost capitalized as part of real estate assets was $36 and $94 for the three months ended September 30, 2018 and 2017, respectively, and $260 and $308 for the nine months ended September 30, 2018 and 2017, respectively. A summary of the status of the Company’s nonvested restricted stock awards as of September 30, 2018, and changes during the nine months ended September 30, 2018, is presented below:
| Shares |  | Weighted-Average Grant Date Fair Value
Nonvested at January 1, 2018 | 642,359 |  |  | $ | 13.23 |
Granted | 693,064 |  |  | $ | 4.55 |
Vested | (413,032 | ) |  | $ | 9.64 |
Forfeited | (8,852 | ) |  | $ | 9.36 |
Nonvested at September 30, 2018 | 913,539 |  |  | $ | 8.30 |
As of September 30, 2018, there was $5,443 of total unrecognized compensation cost related to nonvested stock awards granted under the plans, which is expected to be recognized over a weighted-average period of 2.6 years. Long-Term Incentive Program In 2015, the Company adopted a long-term incentive program ("LTIP") for its named executive officers, which consists of PSU awards and annual restricted stock awards, that may be issued under the 2012 Plan. The number of shares related to the PSU awards that each named executive officer may receive upon the conclusion of a three-year performance period is determined based on the Company's achievement of specified levels of long-term total stockholder return ("TSR") performance relative to the National Association of Real Estate Investment Trusts ("NAREIT") Retail Index, provided that at least a "Threshold" level must be attained for any shares to be earned. Beginning with the 2018 PSUs, two-thirds of the quantitative portion of the award over the performance period will be based on the achievement of TSR relative to the NAREIT Retail Index while the remaining one-third will be based on the achievement of absolute TSR metrics. To maintain compliance with the 200,000 share annual equity grant limit under the 2012 Plan, beginning with the 2018 PSU grant, to the extent that a grant of PSUs could result in the issuance of a number of shares of common stock at the conclusion of the performance period that, when coupled with the number of shares of time-vesting restricted stock granted in the same year the PSUs were granted, would exceed the annual limit, any such excess will be converted to a cash bonus award with a value equivalent to the number of shares of common stock constituting such excess times the average of the high and low trading prices reported for CBL's common stock on the date such shares would otherwise have been issuable. Any such portion of the value of the 2018 PSUs earned payable as a cash bonus will be subject to the same vesting provisions as the issuance of common stock pursuant to the PSUs and is not expected to be significant. In addition, to the extent any cash is to be paid, the cash will be paid first relative to the vesting schedule, ahead of the issuance of shares of common stock with respect to the balance of PSUs earned. Annual Restricted Stock Awards Under the LTIP, annual restricted stock awards consist of shares of time-vested restricted stock awarded based on a qualitative evaluation of the performance of the Company and the named executive officer during the fiscal year. Annual restricted stock awards under the LTIP, which are included in the totals reflected in the preceding table, vest 20% on the date of grant with the remainder vesting in four equal annual installments. Performance Stock Units A summary of the status of the Company’s PSU activity as of September 30, 2018, and changes during the nine months ended September 30, 2018, is presented below:
| PSUs |  | Weighted-Average Grant Date Fair Value
Outstanding at January 1, 2018 | 560,371 |  |  | $ | 5.91 |
2018 PSUs granted | 741,977 |  |  | $ | 2.63 |
Forfeited | (138,899 | ) |  | $ | 4.22 |
Outstanding at September 30, 2018 (1) | 1,163,449 |  |  | $ | 4.55 |
(1) | None of the PSUs outstanding at September 30, 2018 were vested.
Shares earned pursuant to the PSU awards vest 60% at the conclusion of the performance period while the remaining 40% of the PSU award vests 20% on each of the first two anniversaries thereafter. Compensation cost is recognized on a tranche-by-tranche basis using the accelerated attribution method. The resulting expense, for awards classified as equity, is recorded regardless of whether any PSU awards are earned as long as the required service period is met. The fair value of the potential cash component related to the 2018 PSUs is measured at each reporting period, using the same methodology as was used at the initial grant date, and classified as a liability on the condensed consolidated balance sheet as of September 30, 2018 with an adjustment to compensation expense. If the performance criterion is not satisfied at the end of the performance period for the 2018 PSUs, previously recognized compensation expense related to the liability-classified awards would be reversed as there would be no value at the settlement date. Share-based compensation expense related to the PSUs was $178 and $386 for the three months ended September 30, 2018 and 2017, respectively, and $1,130 and $1,115 for the nine months ended September 30, 2018 and 2017, respectively. Unrecognized compensation costs related to the PSUs was $3,141 as of September 30, 2018, which is expected to be recognized over a weighted-average period of 3.7 years. The following table summarizes the assumptions used in the Monte Carlo simulation pricing model related to the PSUs:
| 2018 PSUs |  | 2017 PSUs |  | 2016 PSUs
Grant date | February 12, 2018 |  | February 7, 2017 |  | February 10, 2016
Fair value per share on valuation date (1) | $ | 4.76 |  |  |  | $ | 6.86 |  |  |  | $ | 4.98 |  |
Risk-free interest rate (2) | 2.36 | % |  |  | 1.53 | % |  |  | 0.92 | % |
Expected share price volatility (3) | 42.02 | % |  |  | 32.85 | % |  |  | 30.95 | % |
(1) | The value of the PSU awards is estimated on the date of grant using a Monte Carlo simulation model. The valuation consists of computing the fair value using CBL's simulated stock price as well as TSR over a three-year performance period. The award is modeled as a contingent claim in that the expected return on the underlying shares is risk-free and the rate of discounting the payoff of the award is also risk-free. The weighted-average fair value per share related to the 2018 PSUs classified as equity consists of 240,164 shares at a fair value of $3.13 (which relate to relative TSR) and 120,064 shares at a fair value of $1.63 per share (which relate to absolute TSR). The weighted-average fair value per share related to the 2017 PSUs consists of 115,082 shares at a fair value of $5.62 per share and 162,294 shares at a fair value of $7.74 per share.
(2) | The risk-free interest rate was based on the yield curve on zero-coupon U.S. Treasury securities in effect as of the valuation date, which is the respective grant date listed above.
(3) | The computation of expected volatility was based on a blend of the historical volatility of CBL's shares of common stock based on annualized daily total continuous returns over a three-year period and implied volatility data based on the trailing month average of daily implied volatilities implied by stock call option contracts that were both closest to the terms shown and closest to the money.

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- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -URI http://asc.fasb.org/subtopic&trid=2208855 + Details
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