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STOCK-BASED COMPENSATION
 12 Months Ended
Dec. 31, 2023
Share-Based Payment Arrangement [Abstract]  
STOCK-BASED COMPENSATION STOCK-BASED COMPENSATION
The 2021 Plan provides for the grant of ISOs, RSUs and PSUs intended to qualify under Section 422 of the Internal Revenue Code. The 2021 Plan authorizes awards to the Company’s officers, employees and consultants and to the Company’s directors. At December 31, 2023, the Company had reserved a total of 5,320,789 shares for issuance under its 2021 Plan.
The exercise price per share of an option granted under the 2021 Plan may not be less than the closing price of a share of the Company’s common stock on the date of grant. The maximum term of an option granted under the 2021 Plan may not exceed 8 or 10 years. New shares are issued upon exercise of stock options.
Employee Stock Purchase Plan
The ESPP was made effective as of July 1, 2001, and authorizes 1,799,999 shares of our common stock, which substantially all U.S. employees may purchase through payroll deductions at a price equal to 85% of the fair market values of the stock as of the end of the 6 months offering period. An employee's payroll deductions and stock purchase, may not exceed $5,000 during any offering period. During 2023, 2022, and 2021, 87,617 shares, 98,521 shares and 73,471 shares, respectively, were issued through the ESPP. At December 31, 2023, we had 328,096 shares available for issuance under the ESPP.
Stock-Based Compensation Expense
During 2023, there were no changes to our stock compensation plan or modifications to outstanding stock-based awards which would change the value of any awards outstanding.
The following table presents the total stock-based compensation expense classified in SG&A resulting from stock option awards, RSUs, PSUs and ESPP included in the Consolidated Statements of (Loss) Income:
In millions
Year Ended December 31,
202320222021
Stock options$0.3 $0.8 $2.0 
RSUs19.7 17.1 14.8 
PSUs12.7 6.5 9.6 
ESPP0.7 0.7 0.7 
Total$33.4 $25.1 $27.1 
During the years ended December 31, 2023, 2022, and 2021, the impact of forfeitures was a reduction to expense of $1.6 million, $2.4 million, and $3.3 million, respectively.
Stock Options
Options granted to non-employee directors vest in one year and options granted to officers and employees generally vest over five years. Expense related to options with graded vesting is recognized using the straight-line method over the vesting period. Stock option activity was summarized as follows:
Number of OptionsWeighted Average Exercise Price per ShareWeighted Average Remaining Contractual LifeTotal Aggregate Intrinsic Value
(in years)(in millions)
Outstanding as of January 1, 20231,168,670 $94.61 
Granted— $— 
Exercised(1,242)$48.59 
Forfeited(434)$62.04 
Cancelled or expired(441,449)$113.58 
Outstanding as of December 31, 2023725,545 $84.20 1.74$0.3 
Exercisable as of December 31, 2023717,262 $84.61 1.72$0.3 
The following table sets forth the intrinsic value of options exercised:
In millions
Year Ended December 31,
202320222021
Total exercise intrinsic value of options exercised$— $— $1.1 
The exercise intrinsic value represents the total pre-tax intrinsic value (the difference between the fair value on the trading day the option was exercised and the exercise price associated with the respective option).
There were no stock options granted in the years ended December 31, 2023 or 2022.
Restricted Stock Units
The fair value of RSUs is based on the closing price of the Company's common stock on the date of grant and is amortized to expense over the service period. RSUs vest at the end of three or five years. RSUs activity was as follows:
Number of UnitsWeighted Average Grant Date Fair ValueWeighted Average Remaining Contractual LifeTotal Aggregate Intrinsic Value
(in years)(in millions)
Non-vested as of January 1, 2021547,235 $54.96 
Granted253,860 $68.71 
Vested and Released(186,342)$55.26 
Forfeited(58,431)$28.23 
Non-vested as of December 31, 2021556,322 $60.79 
Granted330,920 $56.15 
Vested and Released(250,064)$59.49 
Forfeited(53,417)$59.26 
Non-vested as of December 31, 2022583,761 $58.85 
Granted427,278 $42.83 
Vested and Released(270,166)$58.03 
Forfeited(72,199)$50.10 
Non-vested as of December 31, 2023668,674 $49.68 0.92$33.1 
At December 31, 2023, there was $11.8 million of total unrecognized compensation expense related to RSUs, which is expected to be recognized over a weighted average period of 1.39 years.
Performance-Based Restricted Stock Units
Our executive officers PSU program was introduced in 2017. PSUs issued to executive officers through 2019 vest, or not, in three equal annual installments based on the achievement of pre-determined annual earnings per share performance goals as approved by the Compensation Committee. Each of the PSU’s granted represents the right to receive one share of the Company’s common stock at a specified future date.
Our PSU program was expanded in 2020 to include employees in additional levels below executive officer. PSUs issued in 2020 and 2021 vest, or not, at the end of the three-year period following the grant date based on the achievement of pre-determined annual earnings per share and annual return on invested capital performance goals as approved by the Compensation Committee. At the end of the three-year period, the results from each of the three years are averaged to calculate one achievement percentage number, and then a relative total shareholder return (rTSR) modifier is applied to that number in order to determine the final share amount, based on Stericycle’s stock’s market performance relative to performance of the S&P MidCap 400 Index. The modifier can adjust the final shares issued by applying a multiplier of 75% - 125%. We use the Monte Carlo simulation model to determine the fair value of PSU's, including the effect of the rTSR modifier, once the related performance criteria have been established.
Compensation cost for the PSUs during the performance period is recognized based on the estimated achievement of the performance criteria, which is evaluated on a quarterly basis. Each of the PSU’s granted represent the right to receive one share of the Company’s common stock at a specified future date. PSU activity was as follows:
Number of UnitsWeighted Average Grant Date Fair Value
Non-vested as of January 1, 2021316,059 $57.79 
Granted116,720 $57.66 
Vested and Released(88,269)$57.61 
Forfeited(22,168)$60.60 
Non-vested as of December 31, 2021322,342 $57.79 
Granted151,123 $56.30 
Vested and Released(74,651)$57.08 
Forfeited(15,574)$57.08 
Non-vested as of December 31, 2022383,240 $56.76 
Granted205,009 $43.35 
Vested and Released(100,250)$56.32 
Forfeited (1)
(37,224)$54.98 
Non-vested as of December 31, 2023450,775 $50.91 
(1)Includes 26,319 shares cancelled in connection with the vesting of awards in 2023 due to above-target and below target performance, respectively, in accordance with the terms of the award.
The table above reflects the number of shares at target which could be earned upon vesting of the PSU’s for which performance goals have been established.
The fair value of units (RSUs and PSUs) that vested during the years ended December 31, 2023, 2022, and 2021 was $16.2 million, $18.0 million, and $18.9 million, respectively.