Equity Incentive Awards

12 Months Ended

Dec. 31, 2022

Share-Based Payment Arrangement [Abstract]

Our 2014 Equity Incentive Plan (the “2014 Plan”) was adopted by the Board of Directors on March 11, 2014 and approved by our stockholders on May 13, 2014. Pursuant to the 2014 Plan, our officers, directors, employees and consultants may be awarded restricted stock, options, including non-qualified stock options and incentive stock options and other forms of equity awards subject to conditions and restrictions determined by the Compensation, Nominating and Corporate Governance Committee of our Board of Directors (the “Compensation Committee”).

Equity awards under the 2014 Plan are made by the Compensation Committee, who determines the individuals eligible to receive awards, the types of awards and the terms, conditions and restrictions applicable to any award. Grants to directors are determined by the Board of Directors. As of December 31, 2022, 5,231,784 shares remained available for future grants.

Restricted stock and options under the 2014 Plan have a maximum contractual term of ten years from the date of grant and have an exercise price not less than the fair value of the stock on the grant date. Individual grants could have different vesting periods but generally no longer than three and a half years. All restricted stock awards have non-forfeitable rights to dividend payments even if the underlying stock does not entirely vest.

Grants Issued

During the quarter ended March 31, 2022, 79,078 shares of restricted stock were awarded to certain members of our management team. Of these shares, 50% are time-based awards, vesting in equal installments over a three-year period on January 27, 2023, January 26, 2024 and January 31, 2025, respectively, and have a grant date fair value of $3.0 million. The remaining 50% are performance-based awards vesting in equal installments on January 31, 2023, January 26, 2024 and January 31, 2025, respectively, upon meeting performance conditions as established by the Compensation Committee in the year of the vesting period. They are valued using the closing price at the grant date when all the key terms and conditions are known to all parties. The 13,178 shares of restricted stock subject to 2022 performance goals have a grant date fair value of $1.0 million.

During the quarter ended June 30, 2022, we awarded to certain members of our Board of Directors 51,522 shares of restricted stock at a fair value of approximately $4.1 million and options to purchase 7,210 shares of common stock with an exercise price of $79.72. These are time-based awards subject to various vesting dates between October 26, 2022 and April 26, 2025.

Stock-based compensation expense, reported in General and administrative expense on the Consolidated Statements of Income and Comprehensive Income, for the years ended December 31, 2022, 2021 and 2020 was $10.5 million, $10.9 million and $11.5 million, respectively.

Restricted Stock

A summary of our restricted stock activities and related information, is as follows:


	Number of Shares	Weighted Average Grant Date Fair Value Per Share
Balance at December 31, 2019	418,742	$48.32
Shares granted	151,104	$56.07
Shares forfeited/cancelled	—	$—
Shares vested	(221,055)	$47.74
Balance at December 31, 2020	348,791	$53.06
Shares granted	162,955	$50.42
Shares forfeited/cancelled	—	$—
Shares vested	(196,839)	$60.91
Balance at December 31, 2021	314,907	$53.98
Shares granted	130,600	$77.47
Shares forfeited/cancelled	(11,881)	$33.35
Shares vested	(167,244)	$48.99
Balance at December 31, 2022	266,382	$69.24

Compensation expense to be recognized subsequent to December 31, 2022, for restricted stock granted during or prior to 2022 that have not yet vested was $10.0 million, which is expected to be recognized over a weighted average term of 1.75 years.

Stock Options

The fair value of stock options granted was estimated on the grant date using the Black-Scholes-Merton model. The following table includes the assumptions made in the valuation:


	2022	2021
Dividend Yield	2.1%	2.1%
Risk-free interest rate	2.8%	1.0%
Expected Life	5.6 years	5.6 years
Expected Volatility	26.5%	26.1%
Weighted Average Grant Date Fair Value Per Share	$18.40	$18.04

There were 7,210 stock options granted during December 31, 2022. No options were forfeited or expired for the years ended December 31, 2022, 2021 and 2020. A summary of our stock option activity and related information, is as follows:


	Shares Subject To Options	Weighted Average Exercise Price Per Share	Weighted Average Outstanding Contractual Life (in years)	Average Intrinsic Value (in millions)
Balance at December 31, 2019	41,500	$40.65	7.3	$1.2
Options issued	16,090	$66.81
Balance at December 31, 2020	57,590	$47.96	7.2	$0.9
Options issued	16,185	$68.74
Balance at December 31, 2021	73,775	$52.52	6.9	$2.6
Options issued	7,210	$79.72
Balance at December 31, 2022	80,985	$54.94	6.19	$1.0
Exercisable at December 31, 2022	71,015	$52.21	5.8	$1.0