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Stock-Based Compensation Plans | 12 Months Ended
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Dec. 31, 2024
Share-Based Payment Arrangement [Abstract] |
Stock-Based Compensation Plans | Stock-Based Compensation Plans On September 8, 2016, prior to the Spin-Off, our Board adopted, and Honeywell, as our sole stockholder, approved, the 2016 Stock Incentive Plan of AdvanSix Inc. and its Affiliates, and the material terms of performance-based compensation were approved by the Company's stockholders for tax purposes at our 2017 annual meeting of stockholders (the "Original Plan"). The Original Plan was amended and restated as the 2016 Stock Incentive Plan of AdvanSix Inc. and its Affiliates, as Amended and Restated, which was approved by stockholders of the Company at the Annual Meetings of Stockholders held on June 23, 2020 and subsequently on June 15, 2022 (the “Equity Plan”). As a result, no further grants will be made under the Original Plan. The Equity Plan provides for the grant of stock options, stock appreciation rights, performance awards, restricted stock units, restricted stock, other stock-based awards and non-share-based awards. The maximum aggregate number of shares of our common stock that may be issued under all stock-based awards granted under the Equity Plan is 2,615,100, subject to adjustment in accordance with the terms of the Equity Plan. Under the Equity Plan, the shares underlying all full-value awards, including those granted to non-employee directors, will be counted against the share reserve on a 1.55-for-one basis. Shares underlying stock option awards and SARs will be counted against the share reserve on a one-for-one basis. Under the terms of the Equity Plan, there were approximately 1,700,000 shares of AdvanSix common stock available for future grants of full-value awards at December 31, 2024. Restricted Stock Units – The Company may grant RSUs to key management employees and directors that generally vest over periods ranging from 1 to 3 years. In the event cash dividends are paid to shareholders of common stock, dividend equivalents accrue on all unvested RSUs. Dividend equivalents are subject to the same termination and vesting terms as the underlying RSU. Upon vesting, the RSUs and related dividend equivalents entitle the holder to receive one share of AdvanSix common stock for each RSU and dividend equivalent at time of vesting and are payable in AdvanSix common stock upon vesting. The fair value of all stock-settled RSUs is based upon the market price of the underlying common stock as of the grant date. The following table summarizes information about RSU activity related to the Equity Plan:
| Number of Restricted Stock Units (In Thousands) |  | Weighted Average Grant Date Fair Value (Per Share)
Non-vested at December 31, 2021 | 442 |  |  | $ | 22.11 |
Granted | 129 |  |  | 39.44 |
Vested | (110) |  |  | 30.00 |
Forfeited | (65) |  |  | 22.25 |
Non-vested at December 31, 2022 | 396 |  |  | 25.53 |
Granted | 178 |  |  | 34.75 |
Vested | (218) |  |  | 15.83 |
Forfeited | (19) |  |  | 38.92 |
Non-vested at December 31, 2023 | 337 |  |  | 35.97 |
Granted | 320 |  |  | 25.77 |
Vested | (150) |  |  | 28.52 |
Forfeited | (47) |  |  | 33.53 |
Non-vested at December 31, 2024 | 460 |  |  | $ | 31.53 |
As of December 31, 2024, there was approximately $6.8 million of total unrecognized compensation cost related to non-vested RSUs granted under the Equity Plan which is expected to be recognized over a weighted-average period of 1.3 years. The following table summarizes information about the income statement impact from RSUs for the Years Ended December 31, 2024, 2023 and 2022:
| Years Ended December 31,
| 2024 |  | 2023 |  | 2022
Compensation expense | $ | 5,670 |  |  | $ | 4,049 |  |  | $ | 3,471 |
Future income tax benefit recognized | $ | 1,186 |  |  | $ | 1,107 |  |  | $ | 927 |
Stock Options – The exercise price, term and other conditions applicable to each option granted under the Equity Plan are generally determined by the Compensation Committee of the Board. The exercise price of stock options is set on the grant date and may not be less than the fair market value per share of our stock on that date. The fair value is recognized as an expense over the employee’s requisite service period (generally the vesting period of the award). Options generally vest over periods ranging from 1 to 3 years. The following table summarizes information about the income statement impact from stock options for the years ended December 31, 2024, 2023 and 2022.
| Years Ended December 31,
| 2024 |  | 2023 |  | 2022
Compensation expense | $ | 822 |  |  | $ | 1,651 |  |  | $ | 1,467 |
Future income tax benefit recognized | $ | 1,498 |  |  | $ | 1,215 |  |  | $ | 1,033 |
The fair value related to stock options granted was determined using Black-Scholes option pricing model and the weighted average assumptions are shown in the table below:
| Years Ended December 31,
Key Black-Scholes Assumptions | 2024 |  | 2023 |  | 2022
Risk-free interest rate | — |  | 4.1% |  | 1.8%
Expected term (years) | — |  | 6 |  | 6
Volatility | — |  | 46.5% |  | 40.2%
Dividend yield | — |  | 1.4% |  | 1.3%
Fair value per stock option | — |  | $18.04 |  | $14.01
The fair value of each option award is estimated on the date of grant using the Black-Scholes option pricing model. Volatility is determined based on the average volatility of peer companies with similar option terms. The expected term is determined using a simplified approach, calculated as the mid-point between the vesting period and the contractual term of the award. The risk-free interest rate is determined based upon the yield of an outstanding U.S. Treasury note with a term equal to the expected term of the option granted. No stock options were awarded during 2024. The following table summarizes information about stock option activity related to the Equity Plan:
| Number of Shares (In Thousands) |  | Weighted Average Exercise Price (Per Share) |  | Weighted Average Remaining Contractual Term (Years) |  | Aggregate Intrinsic Value
Outstanding at December 31, 2021 | 906 |  |  | 26.13 |  |  | 7.42 |  | $ | 19,123 |
Exercisable at December 31, 2021 | 443 |  |  | $ | 29.42 |  |  | 6.54 |  | $ | 7,895 |
Granted | 123 |  |  | 39.13 |  |  |  |  |
Exercised | (69) |  |  | 24.23 |  |  |  |  |
Forfeited | (21) |  |  | 27.81 |  |  |  |  |
Expired | (56) |  |  | 30.94 |  |  |  |  |
Outstanding at December 31, 2022 | 883 |  |  | 27.97 |  |  | 6.81 |  | $ | 8,870 |
Exercisable at December 31, 2022 | 578 |  |  | $ | 27.49 |  |  | 6.06 |  | $ | 6,082 |
Granted | 86 |  |  | 41.15 |  |  |  |  |
Exercised | (9) |  |  | 28.14 |  |  |  |  |
Forfeited | — |  |  | — |  |  |  |  |
Expired | (3) |  |  | 33.27 |  |  |  |  |
Outstanding at December 31, 2023 | 957 |  |  | 29.26 |  |  | 6.17 |  | $ | 4,446 |
Exercisable at December 31, 2023 | 728 |  |  | $ | 26.47 |  |  | 5.46 |  | $ | 4,412 |
Granted | — |  |  | — |  |  |  |  |
Exercised | (24) |  |  | 17.96 |  |  |  |  |
Forfeited | (8) |  |  | 40.43 |  |  |  |  |
Expired | (8) |  |  | 36.12 |  |  |  |  |
Outstanding at December 31, 2024 | 917 |  |  | 29.40 |  |  | 5.16 |  | $ | 3,536 |
Exercisable at December 31, 2024 | 828 |  |  | $ | 28.20 |  |  | 4.87 |  | $ | 3,536 |
The aggregate intrinsic values in the table above represent the total pre-tax intrinsic value (the difference between the Company’s closing stock price on the last trading day of the year and the exercise price, multiplied by the number of in-the-money options) that would have been received had all option holders exercised their in-the-money options at year-end. The amount changes based on the fair market value of the Company’s stock. As of December 31, 2024, there was $0.3 million of unrecognized stock-based compensation expense related to stock options that is expected to be recognized over a weighted average period of approximately 0.5 years. Performance Stock Units – The Company may issue PSUs to key senior management employees which, upon vesting, convert one-for-one to AdvanSix common stock. In the event cash dividends are paid to shareholders of common stock, dividend equivalents will accrue on all unvested PSUs. Dividend equivalents are subject to the same termination, vesting and performance terms as the underlying PSU award. The actual number of shares an employee receives for each PSU and related dividend equivalent depends on the Company’s performance against certain metrics, including cumulative Earnings Per Share and average annual Return on Investment goals over three-year performance and vesting periods. Commencing with the 2021 awards, a market-based factor has the potential to increase or decrease the performance award by 10%. This metric is calculated based upon how the Company's Total Shareholder Return compared to that of its peer group over the vesting period. Each grantee is granted a target level of PSUs and may earn between 0% and 200% of the target level depending on the Company’s performance against the financial goals. The following table summarizes information about PSU activity related to the Equity Plan:
| Number of Performance Stock Units (In Thousands) |  | Weighted Average Grant Date Fair Value (Per Share)
Non-vested at December 31, 2021 | 404 |  |  | $ | 20.04 |
Granted | 101 |  |  | 41.63 |
Vested | (78) |  |  | 30.69 |
Forfeited | (32) |  |  | 22.30 |
Non-vested at December 31, 2022 | 395 |  |  | 23.04 |
Granted | 93 |  |  | 42.63 |
Vested | (193) |  |  | 14.29 |
Forfeited | (1) |  |  | 38.84 |
Non-vested at December 31, 2023 | 294 |  |  | 37.77 |
Granted | 144 |  |  | 28.00 |
Vested | (108) |  |  | 30.37 |
Forfeited | (33) |  |  | 35.86 |
Non-vested at December 31, 2024 | 297 |  |  | $ | 35.95 |
The fair value of the PSUs is principally based on the fair market value of the Company’s stock at the grant date. The number of underlying shares to be issued will be based on actual performance achievement over the performance period. The accrual of compensation costs is based on our estimate of the probable expected value of the award. The fair value of each PSU grant is amortized monthly into compensation expense on a straight-line basis over a vesting period of 36 months. Changes in expected probable value are recorded as compensation expense on a catch-up basis in the month in which the change is identified. Any remaining balance is amortized monthly into compensation expense on a straight-line basis over the remaining vesting period. The Company assumes that forfeitures will be minimal, and estimates forfeitures at time of issuance, which results in a reduction in compensation expense. As the payout of PSUs includes dividend equivalents, no separate dividend yield assumption is required in calculating the fair value of the PSUs. The Company initiated a dividend during the fourth quarter of 2021. As of December 31, 2024, there was approximately $3.3 million of total unrecognized compensation cost related to non-vested PSUs granted under the Equity Plan which is expected to be recognized over a weighted-average period of 1.3 years. The following table summarizes information about the income statement impact from PSUs for the year ended December 31, 2024, 2023 and 2022.
| Years Ended December 31,
| 2024 |  | 2023 |  | 2022
Compensation expense | $ | 1,411 |  |  | $ | 2,612 |  |  | $ | 5,343 |
Future income tax benefit recognized | $ | 216 |  |  | $ | 703 |  |  | $ | 840 |

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