Share-Based Plans

12 Months Ended

Dec. 31, 2021

Share-based Payment Arrangement [Abstract]

Share-Based Plans

Note 20: Share-Based Plans

Webster maintains stock compensation plans consisting of restricted stock awards, stock options, and stock appreciation rights, with shareholder approval for up to 13.4 million shares of common stock, to better align the interests of its employees and directors with those of its shareholders. At December 31, 2021, there were 4.3 million shares of common stock available for grant, and no stock appreciation rights had been granted. Stock compensation expense is recognized over the required service vesting period for each award based on the grant-date fair value, net of estimated forfeitures, and is included as a component of compensation and benefits on the accompanying Consolidated Statements of Income.

The following table summarizes stock-based compensation plan activity for the year ended December 31, 2021:

	Non-Vested Restricted Stock Awards Outstanding						Stock Options Outstanding
	Time-Based			Performance-Based
	Number of Shares	Weighted-Average Grant Date Fair Value		Number of Shares	Weighted-Average Grant Date Fair Value		Number of Shares	Weighted-Average Exercise Price
Balance at January 1, 2021	547,185	$	46.59	250,666	$	48.77	410,701	$	23.35
Granted	195,749	54.60		83,853	54.68		—	—
Vested	186,211	48.93		65,213	51.99		—	—
Forfeited	27,439	46.65		2,889	50.45		—	—
Exercised	—	—		—	—		303,089	23.45
Balance at December 31, 2021	529,284	48.77		266,417	50.03		107,612	23.05

Restricted Stock Awards

Time-based restricted stock awards vest over the applicable service period ranging from one to three years. Under the plan, the number of time-based restricted stock awards that may be granted to an eligible individual per calendar year is limited to 100,000 shares. The fair value of time-based restricted stock awards used to determine compensation expense is measured using the closing price of Webster's common stock at the grant date.

Performance-based restricted stock awards vest after a three year performance period with a share quantity dependent on the Company's performance during that period, ranging from 0% to 150%. The total grant date fair value of performance-based restricted stock awards that had vested during the years ended December 31, 2021, 2020, and 2019 was $12.5 million, $13.5 million, and $12.5 million, respectively. The fair value of performance-based restricted stock awards used to determine compensation expense is calculated using the Monte-Carlo simulation model, which allows for the incorporation of performance conditions where 50% of the performance-based shares are based on total shareholder return as compared to Webster's compensation peer group, and where the remaining 50% of the performance-based shares are based on Webster's average return on equity during the three year vesting period. Compensation expense is subject to adjustment based on management's assessment of Webster's return on equity performance relative to the target number of shares condition.

For the years ended December 31, 2021, 2020, and 2019, Webster recognized stock compensation expense, all of which pertained to its restricted stock awards, of $13.7 million, $12.2 million, and $12.6 million, respectively. The corresponding income tax benefit recognized was $5.4 million, $2.6 million, and $6.1 million for 2021, 2020, and 2019, respectively. At December 31, 2021 there was $16.0 million of unrecognized restricted stock expense related to non-vested restricted stock awards, which is expected to be recognized over a weighted-average period of 1.8 years.

Stock Options

There have been no stock options granted since 2013. Prior to that date, stock options were granted at an exercise price equal to the market value of Webster's common stock on the grant date. Each stock option grants the holder the right to acquire one share of Webster common stock over a contractual life of up to 10 years. At December 31, 2021, there were no incentive stock options outstanding and 107,612 non-qualified stock options outstanding, all of which are exercisable and have a weighted-average remaining contractual life of 1.1 years.

The total pre-tax intrinsic value of $3.5 million at December 31, 2021, or the difference between Webster's closing stock price on the last trading day of the year and the weighted-average exercise price multiplied by the number of shares, represents the aggregate intrinsic value that would have been received by the option holders had all of their outstanding vested options been exercised on December 31, 2021. For the years ended December 31, 2021, 2020, and 2019, the total intrinsic value of the options exercised was $9.0 million, $0.1 million, and $2.4 million, respectively.