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Stock-based Compensation (Tables)
 12 Months Ended
Dec. 31, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Schedule of Stock-based Compensation Expense
The Company’s stock-based compensation expense for the year ended December 31, 2016 included PRSUs, stock options, RSUs and DSUs. A summary of the Company’s stock-based compensation expense is presented below:
 
Year Ended December 31,
(in millions)
2016
 
2015
 
2014
PRSU expense
$
3.9

 
$
13.7

 
$
3.5

Stock option expense
5.3

 
6.6

 
7.0

RSU/DSU expense
7.0

 
2.2

 
2.9

Total stock-based compensation expense
$
16.2

 
$
22.5

 
$
13.4
Summary of PRSU Activity and Related Information

A summary of the Company’s PRSU activity and related information for the years ended December 31, 2016 and 2015 is presented below:
(shares in millions)
Shares
 
Weighted Average Grant Date Fair Value
Awards unvested at December 31, 2014
0.3

 
$
53.45

Granted
1.7

 
70.43

Vested
—

 
—

Forfeited
(0.1
)
 
56.74

Awards unvested at December 31, 2015
1.9

 
68.17

Granted
0.2

 
60.78

Vested
(0.1
)
 
51.87

Forfeited
(0.3
)
 
70.43

Awards unvested at December 31, 2016
1.7

 
$
68.02

The following table shows the PRSUs granted under the 2013 Plan and related Long-Term Incentive Plan, the maximum number of shares to be awarded under the PRSUs granted during the year ended December 31, 2016 and the performance date and vesting schedule of the PRSUs granted.
(shares in millions)
 
 
 
 
Number of Shares Granted
 
Maximum Number of Shares to be Awarded
 
Performance Date
 
Vesting Schedule
0.1

 
0.1

 
December 31, 2017 (1)
 
December 31, 2017 (1)
0.1

 
0.1

 
December 31, 2016
 
Five annual installments beginning on each applicable grant date
(1)
These shares will vest in full if the Company achieves the performance metric per the award agreement in 2017. In addition, if this target is not met in 2017 but the Company achieves the performance metric in 2018, then one-third of the PRSUs will vest, and the remaining PRSUs shall be forfeited.
Schedule of Stock Option Activity
A summary of the Company’s unvested shares relating to stock options as of December 31, 2016 and 2015, and changes during the years ended December 31, 2016 and 2015, are presented below:
(shares in millions)
Shares
 
Weighted Average Grant Date Fair Value
Options unvested at December 31, 2014
0.5

 
$
46.23

Granted
0.8

 
63.55

Vested
(0.4
)
 
44.25

Forfeited
(0.1
)
 
57.12

Options unvested at December 31, 2015
0.8

 
$
62.34

Granted
—

 
—

Vested
(0.3
)
 
61.28

Forfeited
0.0
 
58.37

Options unvested at December 31, 2016
0.5

 
$
63.09

A summary of the Company’s stock option activity under the 2003 Plan and 2013 Plan for the years ended December 31, 2016 and 2015 is presented below:
(in millions, except per share amounts)
Shares
 
Weighted Average Exercise Price
 
Weighted Average Remaining Contractual Term (Years)
 
Aggregate Intrinsic Value
Options outstanding at December 31, 2014
2.8

 
$
24.18

 
 
 
 
Granted
0.8

 
63.55

 
 
 
 
Released
(1.4
)
 
14.70

 
 
 
 
Forfeited
(0.1
)
 
57.12

 
 
 
 
Options outstanding at December 31, 2015
2.1

 
$
42.75

 
 
 
 
Granted
—

 
—

 
 
 
 
Released
(0.6
)
 
24.72

 
 
 
 
Forfeited
0.0

 
58.37

 
 
 
 
Options outstanding at December 31, 2016
1.5

 
$
50.46

 
6.71
 
$
19.1

 
 
 
 
 
 
 
 
Options exercisable at December 31, 2016
1.0

 
$
44.45

 
5.98
 
$
23.6
Stock Options Valuation Assumptions
The Company uses the Black-Scholes option-pricing model to calculate the fair value of stock options granted. During the year ended December 31, 2016, no stock options were granted. The assumptions used in the Black-Scholes option-pricing model for the years ended December 31, 2015 and 2014 are set forth in the following table. Expected volatility is based on the unbiased standard deviation of Tempur Sealy International’s common stock over the option term. The expected life of the options represents the period of time that the Company expects the options granted to be outstanding. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of the grant of the option for the expected term of the instrument. The dividend yield reflects an estimate of dividend payouts over the term of the award. The Company uses historical data to determine these assumptions.
 
Year Ended December 31,
 
2016
 
2015
 
2014
Expected volatility range of stock
N/A
 
34.0% - 36.2%
 
56.7% - 66.5%
Expected life of option, range in years
N/A
 
3 - 5
 
2 - 4
Risk-free interest range rate
N/A
 
0.9% - 1.5%
 
0.4% - 1.4%
Expected dividend yield on stock
N/A
 
0.0% - 0.0%
 
0.6% - 0.7%
Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity
A summary of the Company's RSU and DSU activity and related information for the years ended December 31, 2016 and 2015 is presented below:
(in millions, except per share amounts)
Shares
 
Weighted Average Release Price
 
Aggregate Intrinsic Value
Awards outstanding at December 31, 2014
0.1

 
$
50.41

 
 
Granted
0.1

 
70.44

 
 
Vested
(0.1
)
 
58.73

 
 
Terminated
0.0

 
49.63

 
 
Awards outstanding at December 31, 2015
0.1

 
$
66.41

 
 
Granted
0.3

 
53.77

 
 
Vested
0.0
 
60.17

 
 
Terminated
0.0

 
53.45

 
 
Awards outstanding at December 31, 2016
0.4

 
$
59.37

 
$
27.1
Schedule of Unrecognized Compensation Expense
Excluding the estimated compensation expense related to the 2017 Aspirational Plan PRSUs discussed above, a summary of total unrecognized stock-based compensation expense based on current performance estimates related to stock options, DSUs, RSUs and PRSUs for the year ended December 31, 2016 is presented below:
(in millions, except years)
December 31, 2016
 
Weighted Average Remaining Vesting Period (Years)
Unrecognized stock option expense
5.3

 
1.51
Unrecognized DSU/RSU expense
11.9

 
2.97
Unrecognized PRSU expense
14.2

 
2.56
Total unrecognized stock-based compensation expense
$
31.4

 
2.54