SHARE-BASED COMPENSATION PLANS

3 Months Ended

Mar. 31, 2021

Share-based Payment Arrangement [Abstract]

The following table provides information on share-based compensation expense and income tax benefit recognized:


	Three months ended March 31,
	2021		2020
	(In thousands)
Stock option and stock purchase plans	$	1,001	$	1,357
Unvested stock awards	9,676		1,734
Share-based compensation expense	10,677		3,091
Income tax benefit	(1,532)		(178)
Share-based compensation expense, net of tax	$	9,145	$	2,913

Total unrecognized pre-tax compensation expense related to all share-based compensation arrangements at March 31, 2021 was $75 million and is expected to be recognized over a weighted-average period of 2.3 years.

We generally grant share-based awards in the first quarter of each year during our annual equity award process. The following table is a summary of the awards granted in the annual equity award process in the first quarter of 2021:




	Shares Granted	Weighted-Average Fair Market Value
	(Shares in thousands)


Performance-based restricted stock rights	119		$	67.11






Time-vested restricted stock rights	391		64.89
Total	510		$	65.41

Restricted stock awards are unvested stock rights granted to employees that entitle the holder to shares of common stock as the award vests. Time-vested restricted stock rights typically vest ratably over three years regardless of company performance. The fair value of the time-vested awards is determined and fixed based on Ryder’s stock price on the date of grant.

Performance-based restricted stock rights (PBRSRs) are generally granted to executive management and include a performance-based vesting condition. PBRSRs are awarded based on various revenue, return-based and cash flow performance targets and may include a total shareholder return (TSR) modifier for certain members of management. The fair values of PBRSRs that include a TSR modifier are estimated using a lattice-based option-pricing valuation model that incorporates a Monte-Carlo simulation. The fair value of PBRSRs that do not include a TSR modifier is determined and fixed on the grant date based on our stock price on the date of grant. Share-based compensation expense for PBRSRs is recognized on a straight-line basis over the vesting period, based upon the probability that the performance target will be met. In the first quarter of 2021, PBRSRs awarded contained vesting conditions based on return on equity, strategic revenue growth and free cash flow.