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Stock-Based Compensation
12 Months Ended
Dec. 31, 2024
Share-Based Payment Arrangement [Abstract]  
Stock-Based Compensation STOCK-BASED COMPENSATION
The Company has equity awards outstanding under two stock-based compensation plans; the 2023 Equity and Incentive Plan (the “2023 Plan”) and the 2015 Equity Incentive Plan, as amended and restated (the “2015 Plan”). These plans were primarily established to enhance the Company’s ability to attract, retain, and motivate employees. The Company’s Board or, upon delegation, the Compensation and Human Capital Committee of the Board (“Compensation Human Capital Committee”) has exclusive authority to select employees, advisors and others, including directors, to receive awards and to establish the terms and conditions of each award made pursuant to the Company’s stock-based compensation plan.
The 2023 Plan, approved by the Company’s shareholders in May 2023, was established to provide the Company with flexibility to select from various equity-based performance compensation methods, and to be able to address changing accounting and tax rules and corporate governance practices by optimally utilizing performance-based compensation. At December 31, 2024, there were 2,553,800 common shares available for future grant under the 2023 Plan.
The 2015 Plan, approved by the Company’s shareholders in May 2015, was established to provide the Company with flexibility to select from various equity-based performance compensation methods, and to be able to address changing accounting and tax rules and corporate governance practices by optimally utilizing performance-based compensation. Upon approval of the 2023 Plan, the remaining common shares available for future grant under the 2015 were forfeited. The 2015 Plan continues with respect to the awards made prior to June 2023.
Restricted Stock. Common stock issued under the Company’s restricted stock plans may not be sold or otherwise transferred until restrictions have lapsed or performance objectives have been obtained. During the vesting periods, participants have voting rights and receive dividends on all time restricted shares and vesting performance restricted shares under the 2015 Plan. During the vesting periods, under the 2023 Plan, participants do not have voting rights and dividends are accumulated until the time upon which the award vests. Upon termination of employment, common shares upon which restrictions have not lapsed must be returned to the Company. The vesting requirements under both plans are time-vested, performance-vested, or a combination of both. Currently, time-vested grants vest ratably over three years from the date of grant. Performance-vested grants cliff-vest at the end of a three-year period based on the Company’s performance to peers.
All restricted share awards are classified as equity awards. The fair value of equity-classified restricted stock is based on the market price of the stock on the measurement date and is amortized as compensation expense on a straight-line basis over the period restrictions lapse or the end of the performance period. Stock compensation is recognized based on the number of awards to vest using actual forfeiture amounts. For performance-based stock, an estimate is made of the number of shares expected to vest as a result of actual performance against the performance targets to determine the amount of compensation expense to be recognized. The estimate is reevaluated quarterly and total compensation expense is adjusted for any change in the current period.
Stock-based compensation expense related to restricted stock of $11.8 million, $4.7 million and $9.6 million was included in employee benefits on the Company’s consolidated statements of income for the years ended December 31, 2024, 2023, and 2022, respectively.
The following table presents information regarding the Company’s restricted stock:
Number of
Shares
Weighted-Average
Measurement Date
Fair Value
Balance at December 31, 2021
521,012 $39.73 
Granted458,176 38.67 
Vested(131,199)39.92 
Forfeited(106,891)38.61 
Balance at December 31, 2022
741,098 $38.94 
Granted683,574 19.84 
Vested(180,587)36.73 
Forfeited(127,779)29.75 
Balance at December 31, 2023
1,116,306 $27.74 
Granted807,913 25.49 
Vested(201,755)30.03 
Forfeited(114,007)27.04 
Balance at December 31, 2024
1,608,457 $23.98 
During 2024, the Company issued 807,913 restricted common shares. The 2024 restricted share awards included 312,366 performance restricted shares, of which 156,183 vest in varying percentages upon achievement of defined return on average equity performance goals, and 156,183 vest in varying percentages upon achievement of defined total return to shareholder goals. The defined return to shareholder goals related to the 2021 performance restricted stock grants were not met resulting in the cancellation of 90,935 performance shares. Vesting of the 2024 performance restricted shares is also contingent on employment as of March 15, 2027. Additionally, 586,482 time-restricted shares were issued during 2024, of which 43,514 vest one year from the grant date and the remaining 542,968 vest one-third on each annual anniversary of the grant date, contingent on continued employment through the vesting dates.
As of December 31, 2024, there was $27.9 million of unrecognized compensation cost related to non-vested, restricted stock awards expected to be recognized over a period of 1.28 years.