Share-based compensation

9 Months Ended

Sep. 30, 2020

Share-based Payment Arrangement [Abstract]

Sirius Group's compensation plans include grants for various types of share-based and non-share-based compensation awards to key employees and directors of Sirius Group. During the quarter ended September 30, 2020, all of Sirius Group's outstanding performance shares units ("PSUs") were cancelled and converted into cash-based restricted share units ("RSUs") at the most recent forecasted performance percentage. As of September 30, 2020, Sirius Group's share-based awards consisted of RSUs, restricted stock and options. Additionally, during the quarter ended September 30, 2020, the Company's Compensation Committee approved to offer active employees the opportunity to early settle the 2018 long term incentive award at the recent forecasted performance percentage in cash with the remaining balance of share units converted into replacement cash-based RSUs with extended vesting periods.

Sirius Group recognized $(3.3) million and $3.0 million of compensation expense under the share-based awards during the three months ended September 30, 2020 and 2019, respectively. Sirius Group recognized $0.7 million and $3.1 million of compensation expense under the share-based awards during the nine months ended September 30, 2020 and 2019, respectively. Sirius Group paid $1.9 million and $3.3 million to employees for share-based awards during both the three and the nine months ended September 30, 2020 and 2019, respectively.

The following tables present unrecognized compensation cost associated with unvested awards and weighted average period over which it is expected to be recognized:

(Millions)

September 30, 2020

RSUs

Stock Options

Unrecognized compensation cost related to unvested awards

6.4

1.3

Weighted average recognition period (years)

1.3 years

1.5 years

As of September 30, 2019, there were $27.1 million of unrecognized share-based compensation costs, which are expected to be recognized over two to three years.

The following table summarizes outstanding and changes in share-settled awards for the three and nine months ended September 30, 2020:


	Number of Shares
Three months ended September 30, 2020	RSUs	Stock Options
Unvested, beginning of period	1,274,752	1,374,945
Granted	—	—
Vested	—	—
Forfeited	1,060	—
Unvested, end of period	1,273,692	1,374,945


	Number of Shares
Nine months ended September 30, 2020	RSUs	Stock Options
Unvested, beginning of period	1,353,852	1,374,945
Granted	—	—
Vested	—	—
Forfeited	80,160	—
Unvested, end of period	1,273,692	1,374,945

In the comparative periods of three and nine months ended September 30, 2019, the Company granted members of the Board of Directors 2,424 restricted shares and 37,039 restricted shares, respectively. For the three months ended September 30, 2019, Sirius Group granted employees 7,059 PSUs and 16,471 RSUs. For the nine months ended September 30, 2019, Sirius Group granted employees 408,370 PSUs, 1,428,185 RSUs, and 1,374,944 stock options. During the three months ended September 30, 2019, Sirius Group's employees forfeited 43,230 PSUs and 25,936 RSUs. During the nine months ended September 30, 2019, Sirius Group's employees forfeited 57,565 PSUs and 71,988 RSUs.

Cash-Settled Awards

During the quarter ended September 30, 2020, Sirius Group recognized an expense of $6.1 million related to newly issued RSUs. Additionally, during the quarter ended September 30, 2020, phantom performance shares of the existing long-term incentive compensation award that was issued in February 2020, were converted into cash-based phantom restricted shares. During the three and nine months ended September 30, 2020, Sirius Group recognized an expense of $1.1 million and $4.2 million, respectively, related to this award.

In addition, in November 2019, Sirius Group issued retention awards to certain key employees that vest and are paid in equal proportions on or prior to March 15, 2020 and on or prior to March 15, 2021, subject to continued employment on the applicable vesting date. In total, the awards issued under this retention program were $13.8 million, of which, $6.9 million was paid on March 15, 2020. During the three and nine months ended September 30, 2020, Sirius Group recognized an expense of $1.6 million and $9.2 million, respectively, in General and administrative expenses.