Stock-Based Compensation

12 Months Ended

Dec. 31, 2019

Share-based Payment Arrangement [Abstract]

Stock-Based Compensation

Share-Based Compensation

The Company’s long-term incentive plans allow for the grant of various types of share-based awards to key employees and directors of the Company and its affiliates. The Company generally awards grants on an annual basis. There are 2,300,000 shares of common stock authorized for awards granted under the current plan. Under previous plans, a total of 5,873,103 shares were authorized for awards. The plans provide for the grant of stock options, stock appreciation rights, shares of common stock, restricted stock, restricted stock units (“RSUs”), performance-vested restricted stock units (“PUs”), incentive awards and certain other types of awards to key employees and directors of the Company and its affiliates.

The Company measures share-based compensation expense at fair value and recognizes such expense on a straight-line basis over the vesting period of the share-based employee awards. The compensation expense related to stock options, restricted stock and performance units granted to key employees and directors of the Company, which is quantified below, does not represent payments actually made to these employees. Rather, the amounts represent the non-cash compensation expense recognized by the Company in connection with these awards for financial reporting purposes. The actual value of these awards to the recipients will depend on the trading price of the Company’s stock when the awards vest. In accordance with the Company’s long-term incentive plans, share-based compensation awards that settle in shares of Company stock may be delivered on a gross settlement basis or a net settlement basis, as determined by the recipient.

Share-based compensation expense (income) was as follows:

	Year Ended December 31,
	2019		2018			2017
PUs	$	277	$	(3,925	)	$	12,145
RSUs	8,432		9,241			9,183
Stock options	3,156		3,204			3,635
Total	$	11,865	$	8,520		$	24,963

Stock Options

Stock option awards are granted at the fair market value of the Company’s stock price at the date of the grant and have a 10 year term. The stock option grants vest over three years from the date of grant.

Stock option transactions and related information for the year ended December 31, 2019 was as follows:

	Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)	Aggregate Intrinsic Value
Outstanding as of January 1, 2019	473,245		$	79.35
Granted	174,874		$	72.27
Exercised	(17,175	)	$	29.83
Forfeited	(42,843	)	$	92.07
Expired	(39,331	)	$	78.81
Outstanding as of December 31, 2019	548,770		$	77.68	6.7	$	74
Exercisable as of December 31, 2019	322,018		$	72.72	5.3	$	74

The weighted-average grant date fair value of stock options granted during the years ended December 31, 2019, 2018 and 2017 was $24.22, $36.22 and $33.33, respectively. The total intrinsic value of stock options exercised during the year ended December 31, 2019, 2018 and 2017 was $243, $12,422 and $21,194, respectively.

As of December 31, 2019, unrecognized compensation expense for stock options amounted to $3,549. Such cost is expected to be recognized over a weighted average period of approximately 1.9 years.

The fair value of the options was estimated at the date of the grant using the Black-Scholes option pricing model. Expected volatility was based on the historical volatility of the Company’s common stock. The expected option life was calculated using the simplified method. The risk-free rate is based on the U.S. Treasury zero-coupon issues with a term equal to the expected option life on the date the stock options were granted. The fair value of each option was estimated using the following assumptions:

	2019		2018		2017
Expected volatility	29.48% - 31.10%		27.17% - 27.19%		27.38% - 27.47%
Dividend yield	0.00	%	0.00	%	0.00	%
Expected option life - years	6.0		6.0		6.0
Risk-free rate	1.8% - 2.5%		2.6%		1.9% - 2.1%

Restricted Stock and Restricted Stock Units

The fair value of the restricted stock and restricted stock units is determined based on the closing price of the common stock on the date of grant. The restricted stock and restricted stock units vest over one or three years.

Restricted stock and restricted stock units transactions and related information for the year ended December 31, 2019 was as follows:

	Restricted Stock and Restricted Units		Weighted Average Grant Date Fair Value
Non-vested as of January 1, 2019	313,345		$	94.75
Granted	207,538		$	66.12
Vested	(129,342	)	$	83.87
Forfeited	(58,560	)	$	91.48
Non-vested as of December 31, 2019	332,981		$	83.60

The weighted-average grant date fair value of restricted stock and restricted stock units granted during the years ended December 31, 2019, 2018 and 2017 was $66.12, $110.34 and $107.57, respectively. The total fair value of restricted stock and restricted stock units vested during the years ended December 31, 2019, 2018 and 2017 was $9,859, $7,418 and $7,112, respectively.

As of December 31, 2019, unrecognized compensation expense for restricted stock and restricted stock units amounted to $12,184. Such cost is expected to be recognized over a weighted-average period of approximately 1.8 years.

Performance-Vested Restricted Stock Units

The actual number of performance units that will vest depends on the Company’s achievement of target performance goals related to the Company’s ROIC and total shareholder return over a three-year period, which may range from 0% to 200% of the target award amount. PUs that are expected to be settled in shares of the Company’s common stock are accounted for as equity awards, and the fair value is determined based on the closing price of the common stock on the date of grant. PUs that are expected to be settled in cash are accounted for as liability awards.

A summary of activity for performance-vested restricted stock units transactions and related information for the year ended December 31, 2019 was as follows:

	Performance Units		Weighted Average Grant Date Fair Value
Non-vested as of January 1, 2019	191,854		$	91.46
Granted	110,823		$	78.41
Vested	(75,382	)	$	72.30
Forfeited	(33,242	)	$	91.02
Non-vested as of December 31, 2019	194,053		$	93.86

The weighted-average grant date fair value of performance units granted during the years ended December 31, 2019, 2018 and 2017 was $78.41, $110.40 and $107.49, respectively. The total fair value of PUs vested during the years ended December 31, 2019, 2018 and 2017 was $5,450, $8,256, and $5,641, respectively. Cash paid to settle PUs during the years ended December 31, 2019, 2018 and 2017 was $3,345, $13,302 and $4,296, respectively.

As of December 31, 2019, there was no unrecognized compensation expense.

TSR Awards

In 2016, the Company granted performance awards to certain of the Company’s executive officers. These grants were to be settled in shares of the Company’s stock and vested over a three-year performance period. The payout of these awards was based on the Company’s relative total shareholder return (“TSR”) compared to a pre-established comparator group during the performance period. These awards expired in 2019 with no payout, and there were no outstanding TSR-based performance awards as of December 31, 2019.