STOCK-BASED COMPENSATION

3 Months Ended

Mar. 31, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION

The Company has no stock-based compensation plans of its own; however, Employers Mutual has several stock plans which utilize the common stock of the Company. The Company receives the current fair value for all shares issued under these plans.  A portion of the compensation expense recognized by Employers Mutual (as the requisite service period for granted options and restricted stock awards is rendered) is allocated to the Company’s property and casualty insurance subsidiaries though their participation in the pooling agreement.

During the first quarter of 2017, Employers Mutual began issuing restricted stock units rather than restricted stock awards. In connection with this change, Employers Mutual will now acquire stock to fulfill its obligations to the recipients of the awards on the date the restricted stock units vest, rather than on the grant date of the awards.

Because of this change, an account Employers Mutual established to hold previously granted restricted stock awards until they vest, held excess shares of the Company's stock stemming from forfeitures and surrenders. During the first quarter of 2017, the Company repurchased 64,358 shares of stock from the account at an average cost of $27.31.

The Company recognized compensation expense from these plans of $(323,000) ($(210,000) net of tax) and $137,000 ($89,000 net of tax) for the three months ended March 31, 2017 and 2016, respectively.  During the first three months of 2017, 116,288 restricted stock units were granted under the 2007 Plan to eligible participants, 84,524 shares of restricted stock vested, and 62,262 options were exercised under the plans at a weighted average exercise price of $15.73.