Stock Compensation, Earnings per Share, and Dividends

12 Months Ended

Dec. 31, 2021

Share-based Payment Arrangement [Abstract]

Stock Compensation, Earnings per Share, and Dividends

The Company's 2014 Stock Incentive Plan ("the Plan") allows for the grant of equity based incentive compensation to all employees. The Plan authorizes grants of up to an additional 3,000,000 shares over a ten-year period beginning in 2014. Under the Plan, grants may take the form of stock awards, awards of options to acquire stock, stock appreciation rights, and other forms of equity based compensation; both options to acquire stock and stock awards were granted.

The Company granted approximately 200 thousand restricted stock units (RSUs) to employees and directors during 2021 at an average market price of $28.99. The Company also granted, approximately 59 thousand performance-based Relative Total Shareholder Return (“RTSR”) awards to employees at an average value of $34.05 during 2020.

On July 2, 2021, the Company’s Board of Directors declared a special dividend of $18.75 per share on the issued and outstanding shares of the Company’s common stock (the “Special Dividend”). On August 4, 2021, in accordance with the Plan, the Company's Board of Directors adopted a resolution to modify the outstanding equity awards to offset the grantees’ loss in intrinsic value caused by the disposition of wireless and the decline in the Company's share price following the Special Dividend. Approximately 81 thousand awards were issued, split between RSUs and RTSRs, as a result of this modification. No other terms or conditions of the outstanding equity awards were modified, no incremental expense was required to be recognized, and there was no significant impact to dilutive securities.

The Company's RSUs generally have service requirements only or performance and service requirements with vesting periods ranging from one year for directors to four years for employees. RTSR awards generally vest over an approximate three year period. The performance factor applied to the RTSR awards is based upon the Company's stock performance compared to a group of peer companies. The actual number of shares to be issued can range from 0% to 150% of the awards granted.

The cost of employee services received in exchange for share-based awards classified as equity is measured using the estimated fair value of the award on the date of the grant, and the related expense is recorded using the straight-line method consistent with the recipient's respective service period.

Stock-based compensation expense was as follows:


	Years Ended December 31,
(in thousands)	2021		2020		2019
Stock compensation expense	$	3,552	$	6,227	$	3,732
Capitalized stock compensation	144		320		365
Stock compensation expense, net	$	3,408	$	5,907	$	3,367

As of December 31, 2021, there was $5.9 million of total unrecognized compensation cost related to non-vested incentive awards that are expected to be recognized over weighted average period of 1.8 years.

We utilize the treasury stock method to calculate the impact on diluted earnings per share that potentially dilutive stock-based compensation awards have. The following table indicates the computation of basic and diluted earnings per share:


	Years Ended December 31,
(in thousands, except per share amounts)	2021		2020		2019
Calculation of net income per share:
Income from continuing operations	$	7,929	$	1,576	$	1,932
Income from discontinued operations, net of tax	$	990,902	$	124,097	$	53,568
Net income	$	998,831	$	125,673	$	55,500
Basic weighted average shares outstanding	50,026		49,901		49,811
Basic net income per share - continuing operations	$	0.16	$	0.03	$	0.04
Basic net income per share - discontinued operations	$	19.81	$	2.49	$	1.07
Basic net income per share	$	19.97	$	2.52	$	1.11

Effect of stock-based compensation awards outstanding:
Basic weighted average shares outstanding	50,026		49,901		49,811
Effect from dilutive shares and options outstanding	123		123		290
Diluted weighted average shares outstanding	50,149		50,024		50,101
Diluted net income per share - continuing operations	$	0.16	$	0.03	$	0.04
Diluted net income per share - discontinued operations	$	19.76	$	2.48	$	1.07
Diluted net income per share	$	19.92	$	2.51	$	1.11

There were approximately 259 thousand anti-dilutive awards outstanding during 2021 and fewer than 110 thousand anti-dilutive awards outstanding during 2020 and 2019.

The Special Dividend was paid on August 2, 2021. The total payout to Shentel shareholders, including amounts reinvested in the Company’s stock via the Company’s Dividend Reinvestment Plan, was approximately $937 million. In addition to the Special Dividend, on October 27, 2021, the Company Board of Directors declared the annual dividend of $0.07 per share on the

issued and outstanding shares of the Company's common stock (the "Annual Dividend"). The Annual Dividend was paid on December 1, 2021. The total payout to Shentel shareholders, including amounts reinvested in the Company’s stock via the Company’s Dividend Reinvestment Plan, was approximately $3 million.