Equity-Based Compensation

9 Months Ended

Sep. 30, 2023

Share-Based Payment Arrangement, Noncash Expense [Abstract]

NOTE 8. EQUITY-BASED COMPENSATION

We issue new shares of common stock to settle performance stock awards (PSAs), restricted stock units (RSUs) and deferred compensation stock equivalent units. At September 30, 2023, approximately 1.8 million shares were available for future use under our long-term incentive plans.

Share-based compensation activity during the nine months ended September 30, 2023, included the following:


	Granted		Vested		Forfeited
Performance Share Awards (PSAs)		106,342		—		28,177
Restricted Stock Units (RSUs)		127,079		17,225		12,727

Approximately 0.2 million shares of common stock were issued to employees during the nine months ended September 30, 2023 as a result of PSA and RSU vesting during 2022 and 2023.

The following table details compensation expense and the related income tax benefit for company specific equity-based awards:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2023		2022		2023		2022
Equity-based compensation expense:
Performance share awards	$	1,483	$	1,535	$	3,623	$	4,351
Restricted stock units		1,084		825		2,702		2,335
Deferred compensation stock equivalent units expense		49		49		147		147
Total equity-based compensation expense	$	2,616	$	2,409	$	6,472	$	6,833

Total tax benefit recognized for equity-based expense	$	135	$	119	$	394	$	338

Additionally, during the three months ended September 30, 2022, we recognized a $9.3 million expense for the accelerated vesting of CatchMark equity awards related to the CatchMark merger which is included in CatchMark merger-related expenses on the Condensed Consolidated Statements of Operations. See Note 13: CatchMark Merger for additional information.

Performance Share Awards

The weighted average grant date fair value of PSAs granted in 2023 was $61.21 per share. PSAs granted under the stock incentive plans have a three-year performance period and shares are issued at the end of the period if the performance measures are met. The number of shares actually issued, as a percentage of the amount subject to the PSA, could range from 0% to 200%. PSAs granted under the stock incentive plans do not have voting rights unless and until shares are issued upon settlement. If shares are issued at the end of the performance measurement period, the recipients will receive dividend equivalents in the form of additional shares of common stock at the date of settlement equal to the dividends that would have been paid on the shares earned had the recipients owned the shares during the three-year period. The share awards are not considered participating securities.

The following table presents the key inputs used in the Monte Carlo simulation to calculate the fair value of the performance share awards granted in 2023:


Stock price as of valuation date	$	47.55
Risk-free rate		4.14	%
Expected volatility		36.24	%
Expected dividend yield1		—
Expected term (years)		3.00


1	Full dividend reinvestment assumed.

Restricted Stock Units

The weighted average fair value of all RSUs granted during the nine months ended September 30, 2023, was $47.01 per share. The fair value of RSUs granted equaled our common share price on the date of grant factoring in any required post-vesting holding periods. The RSU awards granted accrue dividend equivalents based on dividends paid during the RSU vesting period. Recipients will receive dividend equivalents in the form of additional shares of common stock at the date the vested RSUs are settled. Any forfeited RSUs will not receive dividends. The share awards are not considered participating securities.