STOCK-BASED COMPENSATION

9 Months Ended

Sep. 30, 2016

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

STOCK-BASED COMPENSATION

EastGroup applies the provisions of ASC 718, Compensation - Stock Compensation, to account for its stock-based compensation plans. ASC 718 requires that the compensation cost relating to share-based payment transactions be recognized in the financial statements and that the cost be measured on the fair value of the equity or liability instruments issued.

Stock-based compensation cost for employees was $706,000 and $4,371,000 for the three and nine months ended September 30, 2016, respectively, of which $232,000 and $839,000 were capitalized as part of the Company's development costs. For the three and nine months ended September 30, 2015, stock-based compensation cost for employees was $1,855,000 and $6,035,000, respectively, of which $410,000 and $1,231,000 were capitalized as part of the Company's development costs.

Stock-based compensation expense for directors was $161,000 and $427,000 for the three and nine months ended September 30, 2016, respectively, and $133,000 and $381,000 for the same periods of 2015.

In the second quarter of 2016, the Compensation Committee of the Company’s Board of Directors (the Committee) approved an equity compensation plan for its executive officers based upon certain annual performance measures (primarily funds from operations (FFO) per share and total shareholder return). Any shares issued pursuant to this compensation plan will be determined by the Committee in its discretion and issued in the first quarter of 2017. The number of shares to be issued on the grant date could range from zero to 44,848. These shares would generally vest 20% on the date shares are determined and awarded and 20% per year on each January 1 for the subsequent four years.

Also in the second quarter of 2016, the Committee approved a long-term equity compensation plan for the Company’s executive officers. The awards will be based on the results of the Company's total shareholder return, both on an absolute basis for 2016 as well as on a relative basis compared to the NAREIT Equity Index, NAREIT Industrial Index and Russell 2000 Index over the five-year period ending December 31, 2016. Any shares issued pursuant to this equity compensation plan will be determined by the Committee in its discretion and issued in the first quarter of 2017. The number of shares to be issued on the grant date could range from zero to 47,275. These shares would generally vest 25% on the date shares are determined and awarded and 25% per year on each January 1 for the subsequent three years.

Notwithstanding the foregoing, any shares issued to the Company’s Chief Financial Officer, N. Keith McKey, under these plans will become fully vested on the grant date of the awards which is expected to occur in the first quarter of 2017.

During the third quarter of 2016, 15,250 shares were granted to certain non-executive officers subject only to continued service as of the vesting date. These shares, which have a grant date fair value of $70.62 per share, will vest 20% per year on January 1 in years 2017, 2018, 2019, 2020 and 2021.

Following is a summary of the total restricted shares granted, forfeited and delivered (vested) to participants with the related weighted average grant date fair value share prices. Of the shares that vested in the first nine months of 2016, the Company withheld 57,316 shares to satisfy the tax obligations for those participants who elected this option as permitted under the applicable equity plan. As of the vesting dates, the aggregate fair value of shares that vested during the first nine months of 2016 was $10,013,000.



	Three Months Ended			Nine Months Ended
Award Activity:	September 30, 2016			September 30, 2016
	Shares	Weighted Average Grant Date Fair Value		Shares		Weighted Average Grant Date Fair Value
Unvested at beginning of period	147,045	$	50.05	260,906		$	52.69
Granted	15,250	70.62		80,529		58.81
Forfeited	—	—		(910	)	52.89
Vested	—	—		(178,230	)	56.09
Unvested at end of period	162,295	$	51.98	162,295		$	51.98