Stock-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2021

Schedule of Estimated Fair Value of TSR Performance-Based Restricted Stock Unit Awards Assumptions

The fair value was estimated using the Monte Carlo simulation model with the following assumptions:

	2021			2020			2019
Risk-free interest rate		0.2	%		1.5	%		2.6	%
Teradyne volatility-historical		43.9	%		34.9	%		31.9	%
NYSE Composite Index volatility-historical		22.9	%		11.4	%		11.9	%
Dividend yield		0.4	%		0.6	%		1.0	%

Fair Value of Stock Options Using Assumptions

The fair value of stock options was estimated using the Black-Scholes option-pricing model with the following assumptions:

	2021			2020			2019
Expected life (years)		5.0			5.0			5.0
Risk-free interest rate		0.4	%		1.5	%		2.5	%
Volatility-historical		37.8	%		32.0	%		30.1	%
Dividend yield		0.4	%		0.5	%		1.0	%

Stock Compensation Plan Activity

Stock compensation plan activity for the years 2021, 2020, and 2019, is as follows:

	2021			2020			2019
	(in thousands)
Restricted Stock Units:
Non-vested at January 1		1,789			2,269			2,454
Awarded		447			616			1,139
Vested		(749	)		(1,028	)		(1,237	)
Forfeited		(70	)		(68	)		(87	)
Non-vested at December 31		1,417			1,789			2,269
Stock Options:
Outstanding at January 1		216			319			506
Granted		34			56			102
Exercised		(78	)		(159	)		(280	)
Forfeited		(1	)		—			(7	)
Expired		—			—			(2	)
Outstanding at December 31		171			216			319
Vested and expected to vest at December 31		171			216			319
Exercisable at December 31		30			27			85

Share Based Compensation Total Shares Available

Total shares available for the years 2021, 2020, and 2019:

	2021			2020			2019
	(in thousands)
Shares available:
Available for grant at January 1		6,123			6,727			7,874
Options granted		(34	)		(56	)		(102	)
Options forfeited		1			—			7
Restricted stock units awarded		(447	)		(616	)		(1,139	)
Restricted stock units forfeited		70			68			87
Available for grant at December 31		5,713			6,123			6,727

Weighted-Average Restricted Stock Unit Award Date Fair Value

Weighted average restricted stock unit award date fair value information for the years 2021, 2020, and 2019, is as follows:

	2021		2020		2019
Non-vested at January 1	$	47.84	$	35.58	$	29.22
Awarded		115.51		72.76		39.08
Vested		43.99		31.53		23.59
Forfeited		65.52		45.36		35.60
Non-vested at December 31	$	67.97	$	47.84	$	35.58

Restricted Stock Unit Awards Aggregate Intrinsic Value

Restricted stock unit awards aggregate intrinsic value information at December 31 for the years 2021, 2020, and 2019 is as follows:

	2021		2020		2019
	(in thousands)
Vested	$	101,679	$	71,582	$	46,110
Outstanding		231,763		214,509		154,752
Expected to vest		231,246		210,301		152,374

Restricted Stock Units Weighted Average Remaining Contractual Terms

Restricted stock units weighted average remaining contractual terms (in years) information at December 31 for the years 2021, 2020, and 2019 is as follows:

	2021		2020		2019
Outstanding		0.89		0.96		1.02
Expected to vest		0.89		0.96		1.02

Weighted Average Stock Options Exercise Price

Weighted average stock options exercise price information for the year ended December 31, 2021 is as follows:

	2021
Outstanding at January 1	$	45.59
Options granted		113.48
Options exercised		39.68
Options forfeited		—
Options cancelled		2.67
Outstanding at December 31		62.13
Exercisable at December 31		34.65

Stock Option Aggregate Intrinsic Value Information

Stock option aggregate intrinsic value information for the years ended December 31, 2021, 2020, and 2019 is as follows:

	2021		2020		2019
	(in thousands)
Exercised	$	6,345	$	9,682	$	9,232
Outstanding		17,356		16,083		12,218
Vested and expected to vest		13,500		13,499		7,701
Exercisable		3,856		2,584		4,517

Stock Options Weighted Average Remaining Contractual Terms

Stock options weighted average remaining contractual terms (in years) information at December 31, for the years 2021, 2020, and 2019 is as follows:

	2021		2020		2019
Outstanding		4.4		4.6		4.2
Vested and expected to vest		4.8		4.9		5.0
Exercisable		2.5		2.5		2.1

Effect to Income (Loss) from Operations for Recording Stock-Based Compensation

The following table provides the effect to income from operations for recording stock-based compensation for the years ended December 31, 2021, 2020, and 2019:

	2021			2020			2019
	(in thousands)
Cost of revenues	$	4,196		$	4,227		$	3,480
Engineering and development		9,783			12,039			9,913
Selling and administrative		31,664			28,640			24,504
Stock-based compensation		45,643			44,906			37,897
Income tax benefit		(14,389	)		(13,060	)		(8,360	)
Total stock-based compensation expense after income taxes	$	31,254		$	31,846		$	29,537