Compensation Plans (Notes)

12 Months Ended

Dec. 31, 2019

Share-based Payment Arrangement [Abstract]

Equity Incentive Plan

The Company’s equity and incentive plan (the “Plan”) is intended to facilitate the Company’s ability to attract and retain staff, provide additional incentive to employees and directors, and promote the success of the Company’s business. The Plan authorizes the issuance of 600,000 common shares of the Company in various forms of equity awards. The Plan also authorizes cash incentive awards. As of December 31, 2019, there were 233,582 common shares available for awards under the Plan. The Plan provides that the Board of Directors, or a committee appointed by the Board, may grant awards and otherwise administer the Plan. Restricted stock units and restricted stock grants issued under the Plan, which vest over time, are recorded as deferred compensation in the equity section of the balance sheet on the grant date and then recognized as compensation expense based on the grant date price over the vesting period of the respective grant. Stock grants issued under the Plan are recorded as compensation expense based on the grant date price.

Share-Based Payment Transactions

The Company issues restricted stock units and restricted stock awards (sometimes referred to collectively as, “Restricted Stock”) under the Plan. Restricted stock units represent common shares which may be issued in the future, whereas restricted stock awards represent common shares issued and outstanding upon grant subject to vesting restrictions. The following table represents a roll-forward of outstanding Restricted Stock and related activity during the years ended December 31, 2019 and 2018:



	Shares		Weighted-Average Grant Date Price per Share
Outstanding Restricted Stock as of December 31, 2018	214,575		$	177.22
Grants issued	50,969		146.59
Grants vested	(23,500	)	125.60
Grants forfeited	(14,200	)	180.53
Outstanding Restricted Stock as of December 31, 2019	227,844		$	175.49

The weighted-average grant date price per share of Restricted Stock issued during the years ended December 31, 2018 and 2017 was $195.00 and $204.46, respectively. The total fair value of Restricted Stock vested, as of their respective vesting dates, during the years ended December 31, 2019, 2018 and 2017 was $3.3 million, $5.8 million and $13.3 million, respectively.

Total deferred equity compensation related to unvested Restricted Stock grants was $20.3 million as of December 31, 2019. Compensation expense related to Restricted Stock grants is calculated based upon the fair market value of the common shares on the grant date. The Company’s policy is to adjust compensation expense for forfeitures as they occur. The recognition of compensation expense related to deferred compensation over the remaining vesting periods is as follows:



2020		2021		2022		2023		2024		Thereafter		Total
$	6,505,660	$	5,229,101	$	4,246,953	$	2,181,995	$	1,049,747	$	1,118,434	$	20,331,890

Stock Grant Transactions

The following table represents shares issued as part of our incentive compensation program during the years ended December 31, 2019, 2018, and 2017:

401(k) Plan

The Company sponsors a 401(k) plan in which all employees are eligible to participate. Employees may contribute a portion of their compensation subject to certain limits based on federal tax laws. Effective April 1, 2018, the Company increased its matching contributions of common shares of the Company with a value equal to 250 percent of the first six percent of an employee’s compensation contributed to the plan. Prior to April 1, 2018, the Company made matching contributions of common shares of the Company with a value equal to 200 percent of the first six percent of an employee’s compensation contribution to the plan. Employees become fully vested in the matching contributions after six plan years of employment. The following table summarizes the Company’s expenses attributable to the 401(k) plan during the years ended December 31, 2019, 2018 and 2017:

Deferred Compensation Plans

The Company offers two deferred compensation plans, the Diamond Hill Fixed Term Deferred Compensation Plan and the Diamond Hill Variable Term Deferred Compensation Plan (collectively the “Plans”). Under the Plans, participants may elect to voluntarily defer, for a minimum of five years, certain incentive compensation, which the Company then contributes into the Plans. Each participant is responsible for designating investment options for assets they contribute, and the distribution paid to each participant reflects any gains or losses on the assets realized while in the Plans. Assets held in the Plans are included in the Company’s investment portfolio, and the associated obligation to participants is included in deferred compensation liability. The gain (loss) on deferred compensation plan investments is recorded as deferred compensation expense (benefit), and is included in operating income. Deferred compensation expense is offset by an equal amount in investment income below net operating income on the consolidated statements of income statement, and thus has no impact on net income attributable to the Company. Deferred compensation liability was $30.3 million and $22.4 million as of December 31, 2019 and 2018, respectively.

Shares Issued

Grant Date Value

December 31, 2019

December 31, 2018

December 31, 2017