Stock-Based Compensation Plans

12 Months Ended

Dec. 31, 2022

Stock-Based Compensation Plans

Stock-Based Compensation Plans

Note 12. Stock-Based Compensation Plans

We make annual grants of long-term equity incentive awards to officers and key employees under our Second Amended and Restated 2015 Incentive Award Plan in the forms of service-based restricted stock units (“RSUs”) and performance-based restricted stock units (“PSUs”) that each have approximately 3-year vesting periods. We also grant the non-employee members of our Board of Directors fully vested stock awards under our Directors Equity Plan. At December 31, 2022, an aggregate of 1,690,229 shares were authorized for future grant under our various stock-based compensation plans. Awards that expire or are canceled without delivery of shares of our common stock and shares withheld related to net share settlements generally become available for issuance under the plans. As RSUs and PSUs vest, we issue new shares of Reliance common stock.

Stock Awards

In 2022, 2021 and 2020, we granted 6,136; 6,248; and 12,807 fully vested stock awards, respectively, to the non-employee members of the Board of Directors. The fair values of the stock awards granted in 2022, 2021 and 2020, were $182.41 per share, $166.39 per share and $91.30 per share, respectively, determined based on the closing price of our common stock on the respective grant dates.

Restricted Stock Units

In 2022, 2021 and 2020, we granted to key employees equity awards consisting of RSUs and PSUs in aggregate amounts of 305,249 units, 318,495 units and 540,547 units, respectively. Each RSU and PSU includes a service-based condition and consists of a right to receive shares of our common stock and dividend equivalent rights, subject to forfeiture, equal to the accrued cash or stock dividends where the record date for such dividends is after the grant date but before the award is settled. In 2022, 2021 and 2020, we granted 192,798, 191,139, and 330,144 RSUs, respectively, that provide the right to receive one share of our common stock and cliff vest at December 1, 2024, December 1, 2023 and December 1, 2022, respectively, if the recipient is an employee of the Company on those dates. Additionally, in 2022, 2021 and 2020, we granted 112,451, 127,356 and 210,403 PSUs, respectively, that included performance goals and the right to receive a maximum of two shares of our common stock and vest only upon the satisfaction of the service-based condition and certain performance targets for the three-year periods ending December 31, 2024, December 31, 2023 and December 31, 2022, respectively. The fair values of the 2022, 2021 and 2020 RSUs and PSUs granted were $187.31 per share, $141.41 per share and $82.81 per share, respectively, determined based on the closing price of our common stock on the respective grant dates.

In 2022, 2021 and 2020, we made payments of $39.7 million, $21.2 million and $23.1 million, respectively, to tax authorities on our employees’ behalf for shares withheld related to net share settlements.

A summary of the status of our unvested RSUs and PSUs as of December 31, 2022 and changes during the year then ended is as follows:

		Weighted
		Average
	RSU and PSU	Grant Date
	Aggregate Units	Fair Value
Unvested at January 1, 2022	831,597	$	105.12
Granted	305,249		187.31
Vested	(518,743)		84.82
Cancelled or forfeited	(36,091)		132.95
Unvested at December 31, 2022	582,012	$	164.60

The fair values as of the respective vesting dates of RSUs and PSUs vested during 2022, 2021 and 2020 were $147.2 million, $126.0 million and $54.0 million, respectively. PSUs totaling 196,944 units that vested on December 31, 2022 were settled in February 2023 through the issuance of 393,888 equivalent shares of our common stock.

Unrecognized Compensation Cost and Tax Benefits

As of December 31, 2022, there was $73.9 million of total unrecognized compensation cost related to unvested RSUs and PSUs in an aggregate amount of 582,012 units that are expected to be settled through the issuance of 802,184 shares of our common stock. The unrecognized compensation cost is expected to be recognized over a weighted average period of 1.7 years.

The tax benefit realized from our stock-based compensation plans in 2022, 2021 and 2020 was $8.0 million, $6.8 million and $6.1 million, respectively.