Share-Based Compensation

9 Months Ended

Sep. 30, 2024

Share-Based Payment Arrangement [Abstract]

Restricted Share Units (“RSUs”)

2024 Grant - During the nine months ended September 30, 2024, the Company granted both time-based and performance-based awards to certain members of management. A total of 818,203 of time-based awards were granted to management which will vest ratably over a three-year period ending March 5, 2027. A total of 75,748 of time-based awards were granted to non-employee members of the Board which will vest in May 2025. A total of 818,208 of performance-based awards were granted, of which 409,104 of the awards vest based on a relative Total Shareholder Return ("TSR") calculation and 409,104 of the awards vest based on certain performance metrics of the Company. The non-TSR performance-based awards vest on March 5, 2027 based on the actual 2026 annual return on invested capital (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 $21.70. The following weighted average assumptions were utilized to value the TSR grants:


	2024
Dividend yield	—	%
Expected historical volatility	47.9	%
Risk free interest rate	4.46	%
Expected life (in years)	3

The unrecognized compensation cost associated with all unvested awards at September 30, 2024 was $32 million, adjusted for estimated forfeitures, which is expected to be recognized over a weighted-average period of approximately 1.9 years.

During the three months ended September 30, 2024 and 2023, we recorded $7 million and $4 million, respectively, of stock compensation expense. During the nine months ended September 30, 2024 and 2023, we recorded $17 million and $15 million, respectively, of stock compensation expense.