Stock-Based Compensation (Notes)

6 Months Ended

Jun. 30, 2020

Stock-Based Compensation [Abstract]

Stock-Based Compensation

Common Stock and Stock-Based Compensation

In March 2020, our Board of Directors authorized a stock repurchase program with respect to the purchase of up to an aggregate of $75 million of Rent-A-Center common stock, superseding our prior authorization. While the program was temporarily suspended due to the COVID-19 pandemic, $58.5 million remains available for repurchases from time to time, in the open market and privately negotiated transactions. During the six months ended June 30, 2020, we repurchased 1,461,177 shares of its common stock for an aggregate purchase price of $26.5 million, which includes shares with an aggregate purchase price of $16.5 million under the March 2020 authorization. No shares were repurchased during the six months ended June 30, 2019.

We recognized $2.9 million and $2.0 million in compensation expense related to stock options and restricted stock units during the three months ended June 30, 2020 and 2019, respectively, and $5.9 million and $2.7 million during the six months ended June 30, 2020 and 2019, respectively. During the six months ended June 30, 2020, we granted approximately 349,000 stock options, 269,000 market-based performance restricted stock units and 187,000 time-vesting restricted stock units. The stock options granted were valued using a Black-Scholes pricing model with the following assumptions: an expected volatility of 45.62% to 52.25%, a risk-free interest rate of 0.30% to 1.72%, an expected dividend yield of 4.02% to 8.20%, and an expected term of 3.50 to 5.75 years. The weighted-average exercise price of the options granted during the six months ended June 30, 2020 was $24.21 and the weighted-average grant-date fair value was $6.75. Performance-based restricted stock units are valued using a Monte Carlo simulation. Time-vesting restricted stock units are valued using the closing price on the trading day immediately preceding the day of the grant. The weighted-average grant date fair value of the market-based performance and time-vesting restricted stock units granted during the six months ended June 30, 2020 was $30.24 and $25.02, respectively.