Share-Based Compensation

6 Months Ended

Jun. 30, 2020

Share-based Payment Arrangement [Abstract]

We currently issue equity awards under the CoreLogic, Inc. 2018 Performance Incentive Plan (the “Plan”), which was approved by our stockholders at our Annual Meeting held in May 2018. The Plan includes the ability to grant share-based instruments such as restricted stock units ("RSUs"), performance-based restricted stock units ("PBRSUs"), and stock options. Prior to the approval of the Plan, we issued share-based awards under the CoreLogic, Inc. 2011 Performance Incentive Plan, as amended, which was preceded by the CoreLogic, Inc. 2006 Incentive Plan. The Plan provides for up to 15,139,084 shares of the Company's common stock to be available for award grants.

We have primarily utilized RSUs and PBRSUs as our share-based compensation instruments for employees and directors. The fair value of any share-based compensation instrument grant is based on the market value of our common stock on the date of grant and is recognized as compensation expense over its vesting period.

Restricted Stock Units

For the six months ended June 30, 2020 and 2019, we awarded 730,319 and 628,730 RSUs, respectively, with an estimated grant-date fair value of $25.8 million and $23.0 million, respectively. The RSU awards will vest ratably over 3 years. RSU activity for the six months ended June 30, 2020 is as follows:


	Number of Shares	Weighted-Average Grant-Date Fair Value
(in thousands, except weighted-average fair value prices)
Unvested RSUs outstanding at 12/31/2019	1,032	$	39.84
RSUs granted	730	$	35.39
RSUs vested	(503)	$	40.40
RSUs forfeited	(34)	$	33.74
Unvested RSUs outstanding at 6/30/2020	1,225	$	37.15

As of June 30, 2020, there was $34.1 million of total unrecognized compensation cost related to unvested RSUs that is expected to be recognized over a weighted-average period of 1.8 years. The fair value of RSU awards are based on the market value of our common stock on the date of grant.

Performance-Based Restricted Stock Units

For the six months ended June 30, 2020 and 2019, we awarded 296,244 and 203,464 PBRSUs, respectively, with an estimated grant-date fair value of $11.1 million and $7.5 million, respectively. These awards are generally subject to service-based, performance-based, and market-based vesting conditions. The service and performance period for the 2020 grants is from January 2020 to December 2022 and the performance metric is adjusted earnings per share.

The performance and service period for the PBRSUs awarded in the first quarter of 2019 is from January 2019 to December 2021. These awards are generally subject to service-based, performance-based, and market-based vesting conditions with the performance metric as adjusted earnings per share. Additionally, within our unvested PBRSUs, there are prior year grants which do not include market-based conditions but have adjusted EBITDA margin or organic revenue growth rate as the performance metric.

The fair values of the awards containing market-based vesting conditions were estimated using Monte-Carlo simulation with the following weighted-average assumptions:


	For the Six Months Ended June 30,
	2020		2019
Expected dividend yield ⁽¹⁾	—	%	—	%
Risk-free interest rate ⁽²⁾	0.60	%	2.44	%
Expected volatility ⁽³⁾	32.53	%	28.24	%
Average total stockholder return ⁽³⁾	(21.47)	%	17.15	%

(1) Since PBRSU participants are credited with dividend equivalent shares when dividends are paid, 0.00% was used in the Monte-Carlo simulation which is mathematically equivalent to paying dividend equivalents upon vesting. Please see Note 1 - Basis for Condensed Consolidated Financial Statements for further information regarding dividends. (2) The risk-free interest rate for the periods within the contractual term of the PBRSUs is based on the US Treasury yield curve in effect at the time of the grant. (3) The expected volatility and average total stockholder return are measures of the amount by which a stock price has fluctuated or is expected to fluctuate based primarily on our and our peers' historical data.

PBRSU activity for the six months ended June 30, 2020 is as follows:


	Number of Shares	Weighted-Average Grant-Date Fair Value
(in thousands, except weighted-average fair value prices)
Unvested PBRSUs outstanding at December 31, 2019	636	$	42.62
PBRSUs granted	296	$	37.53
PBRSUs vested	(184)	$	39.50
PBRSUs forfeited	(12)	$	43.65
Unvested PBRSUs outstanding at June 30, 2020	736	$	41.93

As of June 30, 2020, there was $21.4 million of total unrecognized compensation cost related to unvested PBRSUs that is expected to be recognized over a weighted-average period of 1.9 years. The fair value of PBRSU awards are based on the market value of our common stock on the date of grant.

Stock Options

Prior to 2015, we issued stock options as incentive compensation for certain employees. Option activity for the six months ended June 30, 2020 is as follows:


(in thousands, except weighted-average price)	Number of Shares	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term	Aggregate Intrinsic Value
Options outstanding at December 31, 2019	479	$	19.59
Options exercised	(46)	$	18.19
Options outstanding at June 30, 2020	433	$	19.73	2.1	$	20,604

As of June 30, 2020, there was no unrecognized compensation cost related to unvested stock options.

The intrinsic value of options exercised was $1.2 million and $1.1 million for the six months ended June 30, 2020 and 2019, respectively. This intrinsic value represents the difference between the fair market value of our common stock on the date of exercise and the exercise price of each option.

Employee Stock Purchase Plan

The employee stock purchase plan allows eligible employees to purchase our common stock at 85.0% of the lesser of the closing price on the first day or the last day of each quarter. Our employee stock purchase plan was approved by our stockholders at our 2012 annual meeting of stockholders and the first offering period commenced in October 2012. We recognize an expense for the amount equal to the estimated fair value of the discount during each offering period.

The following table sets forth the share-based compensation expense recognized for the three and six months ended June 30, 2020 and 2019:


	For the Three Months Ended						For the Six Months Ended
	June 30,						June 30,
(in thousands)	2020		2019		2020		2019
RSUs	$	5,601	$	5,612	$	11,412	$	12,924
PBRSUs	7,363		$	1,743	8,938		$	3,658
Stock options	—		$	—	—		$	—
Employee stock purchase plan	789		$	508	1,488		$	1,173
	$	13,753	$	7,863	$	21,838	$	17,755

The table above includes $0.8 million and $0.6 million of share-based compensation expense within cost of services in the accompanying condensed consolidated statements of operations for the three months ended June 30, 2020 and 2019, respectively, and $1.5 million and $1.4 million for the six months ended June 30, 2020 and 2019, respectively.