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ASSURANT, INC. – 2014 Form 10-KF-46
17 Stock Based Compensation
than $1,000,000 or that are not in the insurance or managed
healthcare Global Industry Classifi cation Standard codes. In
addition, companies within the Company’s compensation
peer group, but not otherwise in the S&P Total Market Index,
will be included. The adjusted S&P Total Market Index is
substantially similar in composition to the previous A.M.
Best U.S. Insurance Index.
Under the ALTEIP, the Company’s Chief Executive Offi cer
(“CEO”) is authorized by the Board of Directors to grant
common stock, restricted stock and RSUs to employees other
than the executive offi cers of the Company (as defi ned in
Section 16 of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”)). The Board of Directors reviews and
ratifi es these grants quarterly. Restricted stock and RSUs
granted under this program may have different vesting periods.
Restricted Stock Units
A summary of the Company’s outstanding restricted stock units is presented below:
Shares
Weighted-Average Grant-Date Fair Value
Shares outstanding at December 31, 2013 1,160,090 $ 41.77
Grants 389,271 65.14
Vests (537,509) 40.50
Forfeitures and adjustments (33,824) 54.62
SHARES OUTSTANDING AT DECEMBER 31, 2014 978,028 $ 51.39
The compensation expense recorded related to RSUs was
$23,856, $26,734 and $22,158 for the years ended December 31,
2014, 2013 and 2012, respectively. The related total income
tax benefi t recognized was $8,337, $9,343 and $7,746 for the
years ended December 31, 2014, 2013 and 2012, respectively.
The weighted average grant date fair value for RSUs granted
in 2013 and 2012 was $45.27 and $40.72, respectively.
As of December 31, 2014, there was $14,075 of unrecognized
compensation cost related to outstanding RSUs. That cost is
expected to be recognized over a weighted-average period
of 1.01 years. The total fair value of shares vested during the
years ended December 31, 2014, 2013 and 2012 was $35,206,
$24,812 and $23,177, respectively.
Performance Share Units
A summary of the Company’s outstanding performance share units is presented below:
Performance Share Units
Weighted-Average Grant-Date Fair Value
Performance share units outstanding, December 31, 2013 1,186,829 $ 41.28
Grants 380,459 64.93
Vests (470,579) 37.83
Performance adjustment(1) 86,335 37.83
Forfeitures and adjustments (55,956) 51.29
PERFORMANCE SHARE UNITS OUTSTANDING, DECEMBER 31, 2014 1,127,088 $ 49.63
(1) Represents the change in shares issued based upon the attainment of performance goals established by the Company.
PSU grants above represent initial target awards and do not
refl ect potential increases or decreases resulting from the
fi nancial performance objectives to be determined at the end
of the prospective performance period. The actual number
of shares to be issued at the end of each performance period
will range from 0% to 150% of the initial target awards.
The compensation expense recorded related to PSUs
was $24,380, $22,257 and $14,045 for the years ended
December 31, 2014, 2013 and 2012, respectively. Portions of
the compensation expense recorded during 2011 were reversed
in 2012 since the Company’s level of actual performance as
measured against pre-established performance goals had
declined. The related total income tax benefi t recognized
was $8,516, $7,774, and $4,911 for the years ended December
31, 2014, 2013 and 2012, respectively. The weighted average
grant date fair value for PSUs granted in 2013 and 2012 was
$44.22 and $41.68, respectively.
As of December 31, 2014, there was $17,824 of unrecognized
compensation cost related to outstanding PSUs. That cost is
expected to be recognized over a weighted-average period of
0.72 years. The total fair value of shares vested and issued
during the years ended December 31, 2014 and 2013 was
$31,609 and $19,392, respectively.
The fair value of PSUs with market conditions was estimated
on the date of grant using a Monte Carlo simulation model,
which utilizes multiple variables that determine the probability
of satisfying the market condition stipulated in the award.
Expected volatilities for awards granted during the years
ended December 31, 2014, 2013 and 2012 were based on
the historical stock prices of the Company’s stock and peer
insurance group. The expected term for grants issued during
the years ended December 31, 2014, 2013 and 2012 was
assumed to equal the average of the vesting period of the
PSUs. The risk-free rate was based on the U.S. Treasury yield
curve in effect at the time of grant.