XML 34 R19.htm IDEA: XBRL DOCUMENT v3.22.0.1
Share-Based Compensation
 12 Months Ended
Dec. 31, 2021
Share-based Payment Arrangement, Noncash Expense [Abstract]  
Share-Based Compensation
As of December 31, 2021, we had two share-based compensation plans: the Sun Communities, Inc. 2015 Equity Incentive Plan ("2015 Equity Incentive Plan") and the First Amended and Restated 2004 Non-Employee Director Option Plan ("2004 Non-Employee Director Option Plan"). We believe granting equity awards will provide certain executives, key employees and directors additional incentives to promote our financial success and promote employee and director retention by providing an opportunity to acquire or increase the direct proprietary interest of those individuals in our operations and future.

Restricted Stock

The majority of our share-based compensation is awarded as service vesting restricted stock grants to executives and key employees. We have also awarded restricted stock to our non-employee directors. We measure the fair value associated with these awards using the closing price of our common stock as of the grant date to calculate compensation cost. Employee awards typically vest over several years and are subject to continued employment by the employee. Award recipients receive distribution payments on unvested shares of restricted stock.

2015 Equity Incentive Plan

At the Annual Meeting of Stockholders held on July 20, 2015, the stockholders approved the 2015 Equity Plan. The 2015 Equity Plan had been adopted by the Board and was effective upon approval by our stockholders. The maximum number of shares of common stock that may be issued under the 2015 Equity Plan is 1,750,000 shares of our common stock, with 457,767 as of December 31, 2021 shares remaining for future issuance.
Non-Employee Director Plans

2021 Non-Employee Directors Deferred Compensation Plan - In November 2021, we adopted the 2021 Non-Employee Directors Deferred Compensation Plan ("2021 Deferred Compensation Plan"), which was approved by the Compensation Committee of the Board of Directors. The 2021 Deferred Compensation Plan entitles a non-employee director to annually submit an election to defer all or a portion of his or her eligible share-based and cash compensation, effective starting January 2022.

2004 Non-Employee Director Option Plan - The director plan was approved by our stockholders at the Annual Meeting of Stockholders held on July 19, 2012. The director plan amended and restated in its entirety our 2004 Non-Employee Director Stock Option Plan. At the Annual Meeting of the Stockholders held on May 17, 2018, the stockholders approved the First Amendment to the Sun Communities, Inc. First Amended and Restated 2004 Non-Employee Director Option Plan to increase the number of authorized shares under the plan by 200,000 shares.

The types of awards that may be granted under the director plan are options, restricted stock and OP units. Only non-employee directors are eligible to participate in the director plan. The maximum number of options, restricted stock and OP units that may be issued under the Director Plan is 375,000 shares, with 169,865 as of December 31, 2021 shares remaining for future issuance.

During the years ended December 31, 2021 and 2020, shares were granted as follows:

Grant PeriodTypePlanShares GrantedGrant Date Fair Value Per ShareVesting TypeVesting AnniversaryPercentage
2021Key Employees2015 Equity Incentive Plan2,500 $196.75 
(1)
Time Based
20.0% annually over 5 years
2021Key Employees2015 Equity Incentive Plan1,004 $202.31 
(1)
Time Based
25.0% annually over 4 years
2021Executive Officers2015 Equity Incentive Plan11,488 $196.39 
(1)
Time Based
20.0% annually over 5 years
2021Executive Officers2015 Equity Incentive Plan54,000 $151.89 
(1)
Time Based
20.0% annually over 5 years
2021Executive Officers2015 Equity Incentive Plan81,000 
(2)
$94.32 
(2)
Market Condition3rd100.0 %
2021Executive Officers2015 Equity Incentive Plan15,000 $151.89 
(1)
Time Based
33.3% annually over 3 years
2021Executive Officers2015 Equity Incentive Plan15,000 
(3)
$87.49 
(3)
Market Condition3rd100.0 %
2021Key Employees2015 Equity Incentive Plan28,856 $151.89 
(1)
Time Based
33.3% annually over 3 years
2021Key Employees2015 Equity Incentive Plan61,550 $143.28 
(1)
Time Based
20.0% annually over 5 years
2021Executive Officers2015 Equity Incentive Plan3,400 $147.19 
(1)
Time Based
20.0% annually over 5 years
2021Executive Officers2015 Equity Incentive Plan5,100 
(4)
$96.41 
(4)
Market Condition3rd100.0 %
2021Directors2004 Non-Employee Director Option Plan1,509 $147.19 
(1)
Time Based3rd100.0 %
2021Directors2004 Non-Employee Director Option Plan10,200 $148.44 
(1)
Time Based3rd100.0 %
2020Key Employees2015 Equity Incentive Plan13,873 $140.39 
(1)
Time Based
20.0% annually over 5 years
2020Executive Officers2015 Equity Incentive Plan69,368 $137.63 
(1)
Time Based
20.0% annually over 5 years
2020Key Employees2015 Equity Incentive Plan1,500 $143.20 
(1)
Time Based
20.0% annually over 5 years
2020Key Employees2015 Equity Incentive Plan51,790 $162.42 
(1)
Time Based
20.0% annually over 5 years
2020Executive Officers2015 Equity Incentive Plan46,000 $165.97 
(1)
Time Based
20.0% annually over 5 years
2020Executive Officers2015 Equity Incentive Plan69,000 
(5)
$125.47 
(5)
Market Condition3rd100.0 %
2020Directors2004 Non-Employee Director Option Plan10,200 $147.97 
(1)
Time Based3rd100.0 %
(1)The fair values of the grants were determined by using the average closing price of our common stock on the dates the shares were issued.
(2)Share-based compensation for restricted stock awards with market conditions is measured based on an estimate of shares expected to vest. We estimate the fair value of share-based compensation for restricted stock with market conditions using a Monte Carlo simulation. At the grant date our common stock price was $151.89. Based on the Monte Carlo simulation we expect 62.1 percent of the 81,000 shares to vest.
(3)Share-based compensation for restricted stock awards with market conditions is measured based on an estimate of shares expected to vest. We estimate the fair value of share-based compensation for restricted stock with market conditions using a Monte Carlo simulation. At the grant date our common stock price was $151.89. Based on the Monte Carlo simulation we expect 57.6 percent of the 15,000 shares to vest.
(4)Share-based compensation for restricted stock awards with market conditions is measured based on an estimate of shares expected to vest. We estimate the fair value of share-based compensation for restricted stock with market conditions using a Monte Carlo simulation. At the grant date our common stock price was $147.19. Based on the Monte Carlo simulation we expect 65.5 percent of the 5,100 shares to vest.
(5)Share-based compensation for restricted stock awards with market conditions is measured based on an estimate of shares expected to vest. We estimate the fair value of share-based compensation for restricted stock with market conditions using a Monte Carlo simulation. At the grant date our common stock price was $165.97. Based on the Monte Carlo simulation we expect 75.6 percent of the 69,000 shares to vest.
The following table summarizes our restricted stock activity for the years ended December 31, 2021, 2020 and 2019:

 Number of SharesWeighted Average Grant Date Fair Value
Unvested restricted shares at January 1, 2019871,117 $72.65 
Granted190,020 $107.50 
Vested(237,406)$64.46 
Forfeited(10,690)$79.58 
Unvested restricted shares at December 31, 2019813,041 $83.10 
Granted261,731 $144.89 
Vested(258,280)$73.47 
Forfeited(5,678)$111.04 
Unvested restricted shares at December 31, 2020810,814 $105.92 
Granted290,607 $131.84 
Vested(305,747)$91.06 
Forfeited(7,654)$113.02 
Unvested restricted shares at December 31, 2021788,020 $121.18 

The total fair value of shares vested was $27.8 million, $19.0 million and $15.3 million for the years ended December 31, 2021, 2020 and 2019, respectively.

Total compensation cost recognized for restricted stock was $28.0 million, $22.7 million and $17.5 million for the years ended December 31, 2021, 2020 and 2019, respectively, and is included in General and Administrative Expenses in the accompanying Consolidated Statements of Operations.

The remaining share-based compensation cost, net related to our unvested restricted shares outstanding as of December 31, 2021 is approximately $60.8 million. The following table summarizes our expected share-based compensation cost, net related to our unvested restricted shares, in thousands:

 202220232024Thereafter
Expected share-based compensation costs, net$25.1 $18.3 $10.2 $7.2