Shareholders' Equity and Share-Based Compensation (Notes)

12 Months Ended

Dec. 31, 2022

Shareholders' Equity and Share-based Compensation

SHAREHOLDERS’ EQUITY AND SHARE-BASED COMPENSATION

Preferred Stock. The Company’s Board of Directors has designated 6,600,000 shares of the Company’s preferred stock for issuance as Series C Preferred Stock, of which the Company has 4,460,000 of such shares outstanding as of December 31, 2022. The Series C Preferred Stock has no stated maturity, is not subject to any sinking fund or mandatory redemption, and will remain outstanding indefinitely unless redeemed, repurchased or converted into common stock pursuant to the terms of the Series C Preferred Stock. Except under certain limited circumstances described in Article IIIC of the Company’s Restated Articles of Incorporation, the Company may not redeem the Series C Preferred Stock prior to April 15, 2025. On or after that date, the Series C Preferred Stock may be redeemed at any time and from time to time at the Company's option at a cash redemption price of $25.00 per share plus any accumulated and unpaid dividends. Because the Series C Preferred Stock is redeemable only at the option of the issuer, it is classified as equity on the Company’s consolidated balance sheet.

The Series C Preferred Stock pays a cumulative cash dividend equivalent to 6.900% of the $25.00 liquidation preference per share each year until April 15, 2025. The terms of the Series C Preferred Stock state that upon April 15, 2025 and thereafter, the Company will pay cumulative cash dividends at a percentage of the $25.00 liquidation value per share equal to an annual floating rate of 3-month LIBOR plus a spread of 5.461%. However, because 3-month LIBOR will cease to be a published rate as of June 30, 2023, the fallback provision provided in the terms of the Series C Preferred Stock will allow for the Company to appoint a third-party independent financial institution of national standing to select an industry accepted alternative base rate. The Company paid its regular quarterly dividend of

$0.43125 per share of Series C Preferred Stock on January 17, 2023 to shareholders of record as of January 1, 2023.

Common Stock. During the year ended December 31, 2022, the Company issued 16,880,615 shares of its common stock through its at-the-market (“ATM”) program at an aggregate value of $246,883, net of $3,127 in broker commissions and fees. The Company declared dividends of $1.56 per common share compared to $1.56 and $1.66 for the years ended December 31, 2021 and December 31, 2020, respectively. The Company currently pays a monthly dividend on its common stock. The Company’s timing, frequency, and amount of dividends declared on its common stock are determined by its Board of Directors. When declaring dividends, the Board of Directors considers the Company’s taxable income, the REIT distribution requirements of the Tax Code, and maintaining compliance with dividend requirements of the Series C Preferred Stock, along with other factors that the Board of Directors may deem relevant from time to time.

Share-Based Compensation. Total share-based compensation expense recognized by the Company was $4,419 for the year ended December 31, 2022 compared to $2,516 and $1,823 for the years ended December 31, 2021 and December 31, 2020, respectively.

The following tables present a rollforward of share-based awards for the periods indicated:


	Year Ended
	December 31,
	2022			2021			2020
Type of Award	Shares	Weighted Average Grant Date Fair Value Per Share		Shares	Weighted Average Grant Date Fair Value Per Share		Shares	Weighted Average Grant Date Fair Value Per Share
Restricted stock:
Awards outstanding, beginning of period	197,804	$	15.27	281,761	$	14.74	119,213	$	18.56
Granted	71,216	15.60		40,027	19.02		240,293	13.88
Vested	(135,069)	15.49		(123,984)	15.28		(77,113)	17.94
Forfeited	—	$	—	—	—		(632)	17.10
Awards outstanding, end of period	133,951	$	15.22	197,804	$	15.27	281,761	$	14.74

RSUs:
Awards outstanding, beginning of period	55,019	$	19.40	—	$	—	—	$	—
Granted	73,767	15.19		55,019	19.40		—	—
Vested	(42,120)	17.85		—	—		—	—
Awards outstanding, end of period	86,666	$	16.57	55,019	$	19.40	—	$	—

PSUs:
Awards outstanding, beginning of period	110,040	$	19.04	—	$	—	—	$	—
Granted	147,542	14.83		110,040	19.04		—	—
Vested	(56,298)	16.73		—	—		—	—
Awards outstanding, end of period	201,284	$	16.60	110,040	$	19.04	—	$	—

The number of RSUs that will potentially settle may range from 0% if the recipient’s service-based vesting condition is not met to 100% if the service-based vesting condition is met. The number of PSUs that will potentially settle may range from 0% to 200% based on the achievement of the performance goals defined in the grant award. As of December 31, 2022, the Company expects 96% of the PSUs outstanding will be settled on their vesting dates. The Company has DERs accrued for RSUs and PSUs of $152 and $354, respectively, as of December 31, 2022 compared to $50 and $100, respectively, as of December 31, 2021, which is included on the Company’s consolidated balance sheet within “accrued dividends payable.”

The following table discloses the grant date fair value of the Company’s remaining unvested awards as of December 31, 2022, which will be amortized into compensation expense over the period disclosed:


	December 31, 2022
	Remaining Compensation Cost		WAVG Period of Recognition
Restricted stock	$	945	1.3 years
RSUs	988		1.8 years
PSUs	2,312		1.6 years
Total	$	4,245	1.6 years