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Share-based Compensation | 12 Months Ended
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Dec. 31, 2022
Share-Based Payment Arrangement [Abstract] |
Share-based Compensation | Share-based Compensation Share-based compensation expense consisted of the following:
| Year Ended December 31,
| 2022 |  | 2021 |  | 2020
Total share-based compensation expense from restricted share units | $ | 26 |  |  | $ | 31 |  |  | $ | 30 |
The stock compensation expense for the year ended December 31, 2021 is inclusive of a $3 million true up of expense due to the 2020 and 2021 performance grants as well as the acceleration of $2 million of stock compensation expense associated with the retirement agreement entered into with the former CEO on March 18, 2021. Tronox Holdings plc Amended and Restated Management Equity Incentive Plan On March 27, 2019, in connection with the Re-domicile Transaction, Tronox Holdings plc assumed the management equity incentive plan previously adopted by Tronox Limited, which plan was renamed the Tronox Holdings plc Amended and Restated Management Equity Incentive Plan. The amendments to the plan were made to provide, among other things, for the appropriate substitution of Tronox Holdings in place of Tronox Limited and to ensure the compliance with the laws of England and Wales law in place of Australian law. The MEIP permits the grant of awards that are comprised of incentive options, nonqualified options, share appreciation rights, restricted shares, restricted share units, performance awards, and other share-based awards, cash payments, and other forms as the compensation committee of the Board of Directors (the “Board”) in its discretion deems appropriate, including any combination of the above. The maximum number of shares which were initially subjected to awards (inclusive of incentive options) was 20,781,225 ordinary shares and was increased by 8,000,000 on the affirmative vote of our shareholders on June 24, 2020. Restricted Share Units (“RSUs”) On an annual basis, the Company grants RSUs which have time and/or performance conditions. Both the time-based awards and the performance-based awards are classified as equity awards. 2022 Grants - The Company granted both time-based and performance-based awards to certain members of management and to members of the Board. A total of 582,136 of time-based awards were granted to management which will vest ratably over a three-year period ending March 5, 2025. A total of 68,296 of time-based awards were granted to members of the Board of which will vest in May 2023. A total of 533,416 of performance-based awards were granted, of which 266,708 of the awards vest based on a relative Total Shareholder Return ("TSR") calculation and 266,708 of the awards vest based on certain performance metrics of the Company. The non-TSR performance-based awards vest on March 5, 2025 based on the achievement against the target average company performance of three separate performance periods, commencing on January 1 of each 2022, 2023, and 2024 and ending on December 31 of each 2022, 2023 and 2024, for which, for each performance period, the performance metric is an average annual return on invested capital (ROIC) improvement versus 2021 ROIC. Similar to the Company's historical TSR awards granted in prior years, the TSR awards vest based on the Company's three-year TSR versus the peer group performance levels. Given these terms, the TSR metric is considered a market condition for which we used a Monte Carlo simulation to determine the weighted average grant date fair value of $34.41. Similar TSR awards were granted during 2021 and 2020 with grant date fair values of $29.07 and $10.00, respectively, which were calculated utilizing a Monte Carlo simulation. The following weighted-average assumptions were utilized to value the grants in 2022, 2021 and 2020:
| 2022 |  | 2021 |  | 2020
Dividend yield | 3.22 | % |  | 1.56 | % |  | 2.13 | %
Expected historical volatility | 68.00 | % |  | 71.10 | % |  | 58.30 | %
Risk free interest rate | 3.06 | % |  | 0.17 | % |  | 1.42 | %
Expected life (in years) | 3 |  | 3 |  | 3
The following table presents a summary of activity for RSUs for 2022:
| Number of Shares |  | Weighted Average Grant Date Fair Value
Outstanding, January 1, 2022 | 5,114,945 |  |  | $ | 13.12 |
Granted | 2,313,346 |  |  | 19.47 |
Vested | (3,428,058) |  |  | 12.92 |
Forfeited | (209,829) |  |  | 18.72 |
Outstanding, December 31, 2022 | 3,790,404 |  |  | $ | 17.01 |
Expected to vest, December 31, 2022 | 3,005,712 |  |  | $ | 14.26 |
The 2019 performance-based RSUs vested above target in 2022 and resulted in 1,115,249 additional RSU shares being granted and vested immediately. At December 31, 2022, there was $27 million of unrecognized compensation expense related to nonvested RSUs, adjusted for estimated forfeitures, which is expected to be recognized over a weighted-average period of 1.6 years. The weighted-average grant-date fair value of RSUs granted during 2022, 2021 and 2020 was $19.47 per unit, $20.91 per unit, and $8.89 per unit, respectively. The total fair value of RSUs that vested during 2022, 2021 and 2020 was $44 million, $41 million and $30 million, respectively. Options We did not issue any options during 2022, 2021 and 2020 and all our options outstanding are fully vested at December 31, 2022. The following table presents a summary of option activity for 2022:
| Number of Options |  | Weighted Average Exercise Price |  | Weighted Average Contractual Life (years) |  | Intrinsic Value
Outstanding, January 1, 2022 | 756,327 |  |  | $ | 22.13 |  |  | 1.3 |  | $ | 2 |
Exercised | (13,881) |  |  | 19.59 |  |  |  |  |
Forfeited | (3,842) |  |  | 20.30 |  |  |  |  |
Expired | (223,512) |  |  | 25.95 |  |  |  |  |
Outstanding and Exercisable, December 31, 2022 | 515,092 |  |  | $ | 20.55 |  |  | 0.62 |  | $ | — |
The aggregate intrinsic values in the table represent the total pre-tax intrinsic value (the difference between our share price at the indicated dates and the options’ exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their in-the-money options at the end of the year. The amount will change based on the fair market value of our stock. During 2022 and 2021, there were 13,881 and 424,832 options exercised, respectively, with a total intrinsic value of less than $1 million and $2 million, respectively. We issue new shares upon the exercise of options. During 2022 and 2021, we received less than $1 million and $8 million, respectively, in cash for the exercise of stock options. There were no options exercised during 2020 and consequently there was no related intrinsic value. At December 31, 2022, 2021 and 2020, there was no unrecognized compensation expense related to options.

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