Stock-Based Compensation

12 Months Ended

Dec. 31, 2023

12. Stock-Based Compensation

On May 2, 2016, the Company’s stockholders approved The York Water Company Long-Term Incentive Plan, or LTIP. The LTIP was adopted to provide the incentive of long-term stock-based awards to officers, directors, and key employees. The LTIP provides for the granting of nonqualified stock options, incentive stock options, stock appreciation rights, performance restricted stock grants and units, restricted stock grants and units, and unrestricted stock grants. A maximum of 100,000 shares of common stock may be issued under the LTIP over the ten-year life of the plan. The maximum number of shares of common stock subject to awards that may be granted to any participant in any one calendar year is 2,000. Shares of common stock issued under the LTIP may be treasury shares or authorized but unissued shares. The LTIP is administered by the Compensation Committee of the Board, or the full Board, provided that the full Board administers the LTIP as it relates to awards to non-employee directors of the Company. The Company filed a registration statement with the SEC on May 11, 2016 covering the offering of stock under the LTIP. The LTIP was effective on July 1, 2016.

On May 6, 2019, the Board awarded stock to non-employee directors effective May 6, 2019. This stock award vested immediately. On May 6, 2019, the Compensation Committee awarded restricted stock to officers and key employees effective May 6, 2019. This restricted stock award vests ratably over three years beginning May 6, 2019 and has been fully recognized as of December 31, 2022.

On September 18, 2020, the Board awarded stock to non-employee directors effective September 18, 2020. This stock award vested immediately. On September 18, 2020, the Compensation Committee awarded restricted stock to officers and key employees effective September 18, 2020. This restricted stock award vests ratably over three years beginning September 18, 2020 and has been fully recognized as of December 31, 2023.

On May 3, 2021, the Board awarded stock to non-employee directors effective May 3, 2021. This stock award vested immediately. On May 3, 2021, the Compensation Committee awarded restricted stock to officers and key employees effective May 3, 2021. This restricted stock award vests ratably over three years beginning May 3, 2021.

On May 2, 2022, the Board awarded stock to non-employee directors effective May 2, 2022. This stock award vested immediately. On May 2, 2022, the Compensation Committee awarded restricted stock to officers and key employees effective May 2, 2022. This stock award vests ratably over three years beginning May 2, 2022.

On October 24, 2022, the Board awarded stock to an officer effective October 24, 2022. This stock award vested immediately.

On May 1, 2023, the Board awarded stock to non-employee directors effective May 1, 2023. This stock award vested immediately. On May 1, 2023, the Compensation Committee awarded restricted stock to officers and key employees effective May 1, 2023. This stock award vests ratably over three years beginning May 1, 2023.

On May 1, 2023, the Board accelerated the vesting period for restricted stock granted in 2021, 2022, and 2023 to one retiring key employee from three years to that key employee’s 2024 retirement date.

On November 20, 2023, the Board awarded stock to an officer effective November 20, 2023. This stock award vested immediately.

The restricted stock awards provide the grantee with the rights of a shareholder, including the right to receive dividends and to vote such shares, but not the right to sell or otherwise transfer the shares during the restriction period. As a result, the awards are included in common shares outstanding on the balance sheet. Restricted stock awards result in compensation expense valued at the fair market value of the stock on the date of the grant and are amortized ratably over the requisite service period.

The following table summarizes the stock grant amounts and activity for the years ended December 31, 2022 and 2023.

	Number of Shares			Grant Date Weighted Average Fair Value
Nonvested at beginning of the year 2022		8,804		$46.91
Granted		8,457		$39.01
Vested		(5,996	)	$42.55
Forfeited		(500	)	$44.61
Nonvested at end of the year 2022		10,765		$43.24
Granted		6,792		$41.63
Vested		(6,780	)	$43.09
Forfeited		(1,833	)	$42.29
Nonvested at the end of the year 2023		8,944		$42.32

For the years ended December 31, 2023 and 2022, the statement of income includes $300 and $279 of stock-based compensation and related recognized tax benefits of $84 and $81, respectively. The total fair value of the shares vested in the years ended December 31, 2023 and 2022 was $292 and $255, respectively. Total stock-based compensation related to nonvested awards not yet recognized is $379 at December 31, 2023, which will be recognized over the remaining three-year vesting period.