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Stock-based compensation
 9 Months Ended
Sep. 30, 2024
Disclosure of compensation related costs sharebased payments [Abstract]  
Stock-based Compensation
Note 29 - Stock-based compensation
Incentive Plan
On May 12, 2020,
 
the shareholders of the
 
Corporation approved the Popular,
 
Inc. 2020 Omnibus Incentive
 
Plan, which permits the
Corporation to
 
issue several
 
types of
 
stock-based compensation
 
to employees
 
and directors
 
of the
 
Corporation and/or
 
any of
 
its
subsidiaries (the
 
“2020 Incentive
 
Plan”). The
 
2020 Incentive
 
Plan replaced
 
the Popular,
 
Inc. 2004
 
Omnibus Incentive
 
Plan, which
was in effect
 
prior to the adoption of
 
the 2020 Incentive Plan (the
 
“2004 Incentive Plan” and, together
 
with the 2020 Incentive
 
Plan,
the “Incentive Plan”). Participants under the Incentive Plan are designated by the Talent and Compensation Committee of the Board
of Directors (or its delegate, as determined by the Board). Under the Incentive Plan, the Corporation has issued restricted stock and
performance shares to its employees and restricted
 
stock and restricted stock units (“RSUs”)
 
to its directors.
The restricted
 
stock granted
 
under the
 
Incentive Plan
 
to employees
 
becomes vested
 
based on
 
the employees’
 
continued service
with
 
Popular.
Unless otherwise stated in an agreement, the compensation cost associated with the shares of restricted stock
granted prior to 2021 was determined based on a two-prong vesting schedule. These grants include ratable vesting over five or four
years commencing at the date of grant (“the graduated vesting portion”) with a portion vested at termination of employment after
attainment of 55 years of age and 10 years of service or 60 years of age and 5 years of service (“the retirement vesting portion”).
The graduated vesting portion is accelerated at termination of employment after attaining the earlier of 55 years of age and 10 years
of service or 60 years of age and 5 years of service. Restricted stock granted on or after 2021 have ratable vesting in equal annual
installments over a period of 4 years or 3 years, depending on the classification of the employee. The vesting schedule is
accelerated at termination of employment after attaining the earlier of 55 years of age and 10 years of service or 60 years of age
and 5 years of service.
The
 
performance share
 
awards
 
granted
 
under
 
the
 
Incentive
 
Plan
 
consist
 
of
 
the
 
opportunity
 
to
 
receive
 
shares
 
of
 
Popular,
 
Inc.’s
common stock provided that the Corporation achieves certain goals during a three-year performance cycle.
 
The goals will be based
on
 
two
 
metrics
 
weighted
 
equally:
 
the
 
Relative
 
Total
 
Shareholder
 
Return
 
(“TSR”)
 
and
 
the
 
Absolute
 
Return
 
on
 
Average
 
Tangible
Common Equity
 
(“ROATCE”).
 
The TSR
 
metric is
 
considered to
 
be a
 
market condition
 
under ASC
 
718.
 
For equity
 
settled awards
based
 
on a
 
market condition,
 
the
 
fair value
 
is
 
determined as
 
of the
 
grant date
 
and
 
is not
 
subsequently revised
 
based on
 
actual
performance.
 
The
 
ROATCE
 
metric
 
is
 
considered
 
to
 
be
 
a
 
performance condition
 
under ASC
 
718.
 
The
 
fair value
 
is
 
determined
based on
 
the probability
 
of achieving
 
the ROATCE
 
goal as
 
of each
 
reporting period.
 
The TSR
 
and ROATCE
 
metrics are
 
equally
weighted and
 
work independently.
 
The number of shares that will ultimately vest ranges from 50% to a 150% of target based on
both market (TSR) and performance (ROATCE) conditions. The performance shares vest at the end of the three-year performance
cycle. If a participant terminates employment after attaining the earlier of 55 years of age and 10 years of service or 60 years of age
and 5 years of service, the performance shares shall continue outstanding and vest at the end of the performance cycle.
The
 
following
 
table
 
summarizes
 
the
 
restricted
 
stock
 
and
 
performance
 
shares
 
activity
 
under
 
the
 
Incentive
 
Plan
 
for
 
members
 
of
management.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Not in thousands)
Shares
Weighted-Average
Grant Date Fair
Value
Non-vested at December 31, 2022
281,963
$
56.50
Granted
257,757
66.01
Performance Shares Quantity Adjustment
19,753
75.32
Vested
 
(243,133)
66.31
Forfeited
(16,444)
55.82
Non-vested at December 31, 2023
299,896
$
58.20
Granted
241,744
86.60
Performance Shares Quantity Adjustment
6,739
85.37
Vested
 
(285,048)
75.54
Forfeited
(2,952)
64.83
Non-vested at September 30, 2024
260,379
$
67.13
During
 
the
 
quarter
 
ended
 
September
 
30,
 
2024,
928
 
shares
 
of
 
restricted
 
stock
 
(September
 
30,
 
2023
 
–
0
)
 
were
 
awarded
 
to
management under
 
the Incentive
 
Plan.
 
During the
 
quarters ended
 
September
 
30, 2024
 
and
 
2023,
no
 
performance shares
 
were
awarded to management
 
under the Incentive
 
Plan.
 
For the nine
 
months ended September
 
30, 2024,
176,519
 
shares of
 
restricted
stock
 
(September
 
30,
 
2023
 
–
200,303
)
 
and
65,225
 
performance
 
shares
 
(September
 
30,
 
2023
 
-
51,355
)
 
were
 
awarded
 
to
management under the Incentive Plan.
 
During
 
the
 
quarter
 
ended
 
September
 
30,
 
2024,
 
the
 
Corporation
 
recognized
 
$
1.8
 
million
 
of
 
restricted
 
stock
 
expense
 
related
 
to
management
 
incentive
 
awards,
 
with
 
a
 
tax
 
benefit
 
of
 
$
0.4
 
million
 
(September
 
30,
 
2023
 
-
 
$
2.0
 
million,
 
with
 
a
 
tax
 
benefit
 
of
 
$
0.4
million).
 
For
 
the
 
nine
 
months
 
ended
 
September
 
30,
 
2024,
 
the
 
Corporation recognized
 
$
12.3
 
million
 
of
 
restricted
 
stock
 
expense
related to management
 
incentive awards, with a
 
tax benefit of
 
$
2.0
 
million (September 30, 2023
 
- $
9.7
 
million, with a
 
tax benefit of
$
1.5
 
million). For the nine months ended
 
September 30, 2024, the fair market
 
value of the restricted stock
 
and performance shares
vested was $
16.9
 
million at grant
 
date and $
23.2
 
million at vesting date.
 
This differential triggers
 
a windfall of
 
$
2.3
 
million that was
recorded as a
 
reduction on income tax
 
expense. During the quarter ended
 
September 30, 2024, the
 
Corporation recognized $
(0.5)
million of performance shares benefit, with a tax benefit of $
(32)
 
thousand due to performance shares target adjustment (September
30,
 
2023
 
-
 
$
0.1
 
million,
 
with
 
a
 
tax
 
benefit
 
of
 
$
8
 
thousand).
 
For
 
the
 
nine
 
months
 
ended
 
September
 
30,
 
2024,
 
the
 
Corporation
recognized $
3.5
 
million of performance shares expense, with a tax
 
benefit of $
0.2
 
million (September 30, 2023 - $
3.6
 
million, with a
tax
 
benefit
 
of
 
$
0.1
 
million).
 
The
 
total
 
unrecognized
 
compensation
 
cost
 
related
 
to
 
non-vested
 
restricted
 
stock
 
awards
 
and
performance shares to members of management at September 30, 2024 was $
13.9
 
million and is expected to be recognized over a
weighted-average period of
1.65
 
years.
The following table summarizes the restricted stock
 
activity under the Incentive Plan for members of
 
the Board of Directors:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Not in thousands)
RSUs / Unrestricted stock
Weighted-Average
 
Grant
Date Fair Value per Unit
Non-vested at December 31, 2022
-
$
-
Granted
39,104
55.30
Vested
 
(39,104)
55.30
Forfeited
-
-
Non-vested at December 31, 2023
-
$
-
Granted
24,279
89.22
Vested
 
(24,279)
89.22
Forfeited
-
-
Non-vested at September 30, 2024
-
$
-
The
 
equity
 
awards
 
granted
 
to
 
members
 
of
 
the
 
Board
 
of
 
Directors
 
of
 
Popular,
 
Inc.
 
(the
 
“Directors”)
 
will
 
vest
 
and
 
become
 
non-
forfeitable on the
 
grant date of
 
such award. Effective
 
in May 2019,
 
all equity awards
 
granted to the
 
Directors may be
 
paid in either
unrestricted stock
 
or RSUs
 
at each
 
Directors election.
 
If RSUs
 
are elected,
 
the Directors
 
may defer
 
the delivery
 
of the
 
shares of
common stock
 
underlying the
 
RSUs award
 
until their
 
retirement. To
 
the extent
 
that cash
 
dividends are
 
paid on
 
the Corporation’s
outstanding common stock, the Directors
 
will receive an additional number of RSUs
 
that reflect a reinvested dividend equivalent.
 
For 2024
 
and 2023,
 
Directors elected
 
RSUs and
 
unrestricted stock.
 
During the
 
quarter ended
 
September 30,
 
2024,
1,281
 
RSUs
and
no
 
shares of unrestricted stock were granted to the
 
Directors (September 30, 2023 -
1,384
 
RSUs and
no
 
shares of unrestricted
stock)
 
and
 
the
 
Corporation
 
recognized
 
expense
 
related
 
to
 
these
 
shares
 
of
 
$
0.1
 
million
 
with
 
a
 
tax
 
benefit
 
of
 
$
21
 
thousand
(September
 
30,
 
2023
 
-
 
$
0.1
 
million
 
with
 
a
 
tax
 
benefit
 
of
 
$
16
 
thousand).
 
For
 
the
 
nine
 
months
 
ended
 
September
 
30,
 
2024,
 
the
Corporation
granted
22,887
 
RSUs and
1,392
 
shares of unrestricted stock to the
 
Directors (September 30, 2023 -
35,412
 
RSUs and
2,300
 
shares
 
of
 
unrestricted
 
stock)
 
and
 
the
 
Corporation
 
recognized
 
$
2.2
 
million
 
of
 
expense
 
related
 
to
 
these
 
shares,
 
with
 
a
 
tax
benefit of
 
$
0.4
 
million, (September
 
30, 2023
 
- $
2.1
 
million, with
 
a tax
 
benefit of
 
$
0.4
 
million). The
 
fair value
 
at vesting
 
date of
 
the
shares vested during the nine months ended September
 
30, 2024 for the Directors was $
2.2
 
million.