Share-Based Payments

12 Months Ended

Dec. 31, 2019

Share-based Payment Arrangement [Abstract]

Share-based compensation costs are primarily classified as a component of operating expense.

During 2019, 2018 and 2017, ProAssurance provided share-based compensation to employees utilizing three types of awards: restricted share units, performance share units and purchase match units. The restricted share and performance share awards were made under either the ProAssurance Corporation Amended and Restated 2014 Equity Incentive Plan or the ProAssurance Corporation 2008 Equity Incentive Plan. The Compensation Committee of the Board is responsible for the administration of both plans.

The following table provides a summary of compensation expense and the total related tax benefit recognized during each period as well as estimated compensation cost that will be charged to expense in future periods.



	Share-Based Compensation Expense						Unrecognized Compensation Cost
	Year Ended December 31						December 31, 2019
($ in millions, except remaining recognition period)	2019		2018		2017		Amount		Weighted Average Remaining Recognition Period
Total share-based compensation expense	$	3.5	$	5.3	$	10.6	$	5.6	2.5
Tax benefit recognized	$	0.7	$	1.1	$	3.7

The majority of awards are equity classified awards and are charged to expense as an increase to additional paid-in capital over the service period (generally the vesting period) associated with the award. However, a nominal amount of awards are liability classified awards and are recorded as a liability as they are structured to be settled in cash. As of December 31, 2019, the majority of share-based compensation expense related to restricted share units. Restricted share and performance share units vest in their entirety generally at the end of a three-year period, except for certain restricted share units granted in 2019 which will vest at the end of a five-year period, following the grant date based on a continuous service requirement and, for performance share units, achievement of a performance objective; partial vesting is permitted for retirees. All non-vested purchase match units at December 31, 2018 were fully vested in the fourth quarter of 2019; previously, units vested over a three-year period based on a service requirement with partial vesting permitted for all participants. For the restricted share and purchase match units, a single share of ProAssurance common stock is issued per vested unit. For performance share units, the number of shares of ProAssurance common stock issued per vested unit varies based on performance goals achieved. For equity classified awards, units sufficient to satisfy required tax withholdings are paid in cash rather than in shares of ProAssurance common stock. Liability classified awards, which are nominal in amount, are settled in cash at the end of the vesting period.

Restricted Share Units

Activity for restricted share units during 2019, 2018 and 2017 is summarized below. Grant date fair values are based on the market value of a share of ProAssurance common stock on the date of grant less the estimated net present value of expected dividends during the vesting period.



	2019				2018				2017
	Units		Weighted Average Grant Date Fair Value		Units		Weighted Average Grant Date Fair Value		Units		Weighted Average Grant Date Fair Value
Beginning non-vested balance	267,323		$	49.16	269,520		$	48.63	240,149		$	44.07
Granted	164,196		$	36.96	85,797		$	44.73	84,565		$	58.35
Forfeited	(3,832	)	$	45.09	(3,878	)	$	50.07	(4,087	)	$	52.35
Vested and released	(107,062	)	$	46.06	(84,116	)	$	42.90	(51,107	)	$	43.01
Ending non-vested balance	320,625		$	43.99	267,323		$	49.16	269,520		$	48.63

The aggregate grant date fair value of restricted share units vested and released in 2019, 2018 and 2017 totaled $4.9 million, $3.6 million and $2.2 million, respectively. The aggregate intrinsic value of restricted share units vested and released in 2019, 2018 and 2017 (including units paid in cash to cover tax withholdings) totaled $4.6 million, $4.1 million and $3.1 million, respectively.

Performance Share Units

Performance share units vest only if minimum performance objectives are met, and the number of units earned varies from 50% to 200% of a base award depending upon the degree to which stated performance objectives are achieved. Performance share unit activity for 2019, 2018 and 2017 is summarized below. The table reflects the base number of units; actual awards that vest depend upon the extent to which performance objectives are achieved. Grant date fair values are based on the market value of a share of ProAssurance common stock on the date of grant less the estimated net present value of expected dividends during the vesting period.



	2019				2018				2017
	Base Units		Weighted Average Grant Date Fair Value		Base Units		Weighted Average Grant Date Fair Value		Base Units		Weighted Average Grant Date Fair Value
Beginning non-vested balance	135,202		$	49.95	212,105		$	47.11	305,240		$	43.41
Granted	25,168		$	40.18	27,202		$	44.73	48,000		$	58.35
Forfeited	—		$	—	—		$	—	(227	)	$	42.79
Vested and released	(60,000	)	$	45.59	(104,105	)	$	42.79	(140,908	)	$	42.95
Ending non-vested balance	100,370		$	50.10	135,202		$	49.95	212,105		$	47.11

The aggregate grant date fair value of performance share units (base level) vested and released in 2019, 2018 and 2017 totaled $2.7 million, $4.5 million and $6.1 million, respectively. The aggregate intrinsic value of performance share units (base level) vested and released in 2019, 2018 and 2017 (including units paid in cash to cover tax withholdings) totaled $2.6 million, $5.0 million and $8.7 million, respectively. The weighted average level at which the vested units were issued was 95%, 125% and 119% during 2019, 2018 and 2017, respectively, based on performance levels achieved.

Purchase Match Units

The ProAssurance Corporation 2011 Employee Stock Ownership Plan provided a purchase match unit for each share of ProAssurance common stock purchased with contributions by eligible plan participants, with participant contributions subject to a $5,000 annual limit per participant. During 2017, the ProAssurance Corporation 2011 Employee Stock Ownership Plan was discontinued and the existing non-vested purchase match units were fully vested in the fourth quarter of 2019. Purchase match unit activity during 2019, 2018 and 2017 is summarized below. Grant date fair values are based on the market value of a ProAssurance common share on the date of grant less the estimated net present value of expected dividends during the vesting period.



	2019				2018				2017
	Units		Weighted Average Grant Date Fair Value		Units		Weighted Average Grant Date Fair Value		Units		Weighted Average Grant Date Fair Value
Beginning non-vested balance	44,682		$	51.05	70,292		$	49.40	72,615		$	45.77
Granted	—		$	—	—		$	—	24,444		$	51.83
Forfeited	(1,400	)	$	51.47	(1,594	)	$	50.19	(2,012	)	$	48.29
Vested and released	(43,282	)	$	51.03	(24,016	)	$	46.28	(24,755	)	$	41.33
Ending non-vested balance	—		$	—	44,682		$	51.05	70,292		$	49.40

The aggregate grant date fair value of purchase match units vested and released in 2019, 2018 and 2017 totaled $2.2 million, $1.1 million and $1.0 million, respectively. The aggregate intrinsic value of purchase match share units vested and released in 2019, 2018 and 2017 (including units paid in cash to cover tax withholdings) totaled $1.7 million, $1.1 million and $1.4 million, respectively.