Note 5 - Deferred Compensation Plan

3 Months Ended

Mar. 31, 2015

Compensation Related Costs [Abstract]

Compensation Related Costs, General [Text Block]

5. DEFERRED COMPENSATION PLAN

In accordance with the 2006 Dental Care Plus Management Equity Incentive Plan and the Dental Care Plus, Inc. and DCP Holding Company Deferred Compensation Plan (the “Plans”), Company directors and certain key employees elected to defer portions of their director fees and employee compensation, as applicable. The Company recorded expense of approximately $56,000 and $45,000 related to deferred director fees and deferred employee compensation for the three months ended March 31, 2015 and 2014, respectively. Directors and key employees who elect to defer cash compensation may request that the Company invest this compensation in a mutual fund investment or phantom shares of the Company. The deferred cash compensation is included in the deferred compensation liability at March 31, 2015 and December 31, 2014.

The Plans also provide for the directors and key employees to receive share awards based on the book value of the Redeemable Common Shares. Subsequent to 2010, a director will receive Class B Redeemable Common Shares upon vesting. A key employee may elect to defer receiving such amounts until termination of employment and vesting requirements are met. If a key employee does not elect to defer receiving his or her share awards, the individual will receive Class B Redeemable Common Shares upon vesting. If the share awards are deferred, these deferred amounts will be paid in cash at redemption. An individual director’s award vests 100% at the end of each year if the director meets certain attendance requirements. The key employee awards vest 10%, 20%, 30% and 40% at the end of each respective year in a four-year period following the grant date. There are no performance criteria associated with the vesting of the awards for key employees and the only requirement for vesting is that the individual is an employee of the Company at the end of the vesting year in question. The number of awards expected to vest approximates the total non-vested awards outstanding.

The Company has a long-term incentive compensation program for named executive officers pursuant to which an officer may receive an award of up to 45% of such officer’s base salary in the form of share awards that will vest if established Company performance criteria are achieved over a three year period.

The deferred compensation expense related to these awards is recorded ratably over the applicable vesting period. The Company recorded deferred compensation expense of approximately $185,000 and $94,000 related to deferred share awards and the change in the value of phantom shares for the three months ended March 31, 2015 and 2014, respectively. As of March 31, 2015, there is approximately $431,000 of total unrecognized compensation cost related to non-vested award compensation under the Plans. That cost is expected to be recognized over a weighted average period of 1.47 years.

Share-based compensation cost is measured at the grant date based on the fair value of the awards and is recognized as expense over the vesting periods and is included in total insurance expense in the condensed consolidated statements of comprehensive income. The fair value of employee awards is remeasured at the end of each reporting period through the remaining vesting period with the change in fair value recognized in earnings.

In February 2015 and 2014, the Board declared a per share cash dividend for all Redeemable Common Shares in the amounts of $39.86 and $35.77 per share, respectively. With the dividend, the holders of restricted share units and phantom shares received an equivalent share based dividend that resulted in an increase in the deferred compensation liability of approximately $65,000 and $41,000 in February 2015 and February 2014, respectively. At March 31, 2015 and December 31, 2014, the deferred compensation liability was approximately $2,921,000 and $2,766,000, respectively.

The following is a summary of activity of non-vested awards for the three months ended March 31, 2015 and 2014:

	Individual Director's Share Awards		Weighted Average Grant Date Fair Value		Key Employee Share Awards		Fair Value at 3/31/2015
Non-vested awards at January 1, 2015						481.9
Granted		228.0	$	997		88.0
Non-vested awards at March 31, 2015		228.0	$	997		569.9	$	981

	Individual Director's Share Awards		Weighted Average Grant Date Fair Value		Key Employee Share Awards			Fair Value at 3/31/2014
Non-vested awards at January 1, 2014						644.6
Granted		238.0	$	894		178.0
Forfeited						(24.6	)
Non-vested awards at March 31, 2014		238.0	$	894		798.0		$	869

The following is a summary of activity of vested awards for the three months ended March 31, 2015 and 2014:

Vested awards at January 1, 2015	839.2	$	1,018	778.8
Share based dividend	33.4		1,003	31.0
Vested awards at March 31, 2015	872.6	$	981	809.8	$	981

	Individual Director's Awards		Weighted Average Vested price		Key Employee Awards			Fair Value at 3/31/2014
Vested awards at January 1, 2014		806.7	$	886		408.5
Share based dividend		32.5		887		13.4
Redeemed vested awards						(76.2	)
Vested awards at March 31, 2014		839.2	$	869		345.7		$	869