Assurant 2012 Annual Report Download - page 118

ASSURANT, INC.2012 Form10-KF-42
16 Stock Based Compensation
equivalents in cash during the restricted period and do not have voting
rights during the restricted period. PSUs accrue dividend equivalents
during the performance period based on a target payout, and will be
paid in cash at the end of the performance period based on the actual
number of shares issued.  e fair value of RSUs is estimated using the
fair market value of a share of the Company’s common stock at the date
of grant.  e fair value of PSUs is estimated using the Monte Carlo
simulation model and is described in further detail below.
For the PSU portion of an award, the number of shares a participant will
receive upon vesting is contingent upon the Company’s performance
with respect to selected metrics, identi ed below, compared against a
broad index of insurance companies and assigned a percentile ranking.
 ese rankings are then averaged to determine the composite percentile
ranking for the performance period.  e payout levels can vary between
0% and 150% (maximum) of the target (100%)ALTEIP award amount
based on the Company’s level of performance against the selected metrics.
PSU Performance Goals.For 2012, 2011 and 2010, the Compensation
Committee established book value per share (“BVPS”) growth excluding
AOCI, revenue growth and total stockholder return as the three
performance measures for PSU awards. BVPS growth is de ned as
the year-over-year growth of the Company’s stockholders’ equity
excluding AOCI divided by the number of fully diluted total shares
outstanding at the end of the period. Revenue growth is de ned as the
year-over-year change in total revenues as disclosed in the Company’s
annual statement of operations. Total stockholder return is de ned as
appreciation in Company stock plus dividend yield to stockholders.
For the 2012-2014, 2011-2013 and 2010-2012 performance cycles,
payouts will be determined by measuring performance against the average
performance of companies included in the A.M. Best Insurance Index,
excluding those with revenues of less than $1,000,000 or that are not in
the health or insurance Global Industry Classi cation Standard codes.
Under the ALTEIP, the Company’s Chief Executive O cer (“CEO”) is
authorized by the Board of Directors to grant common stock, restricted
stock and RSUs to employees other than the executive o cers of the
Company (as de ned in Section16 of the Securities Exchange Act
of 1934, as amended (the “Exchange Act”)).  e Board of Directors
reviews and rati es these grants quarterly. Restricted stock and RSUs
granted under this program may have di erent 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, 2011 1,211,199 $ 33.38
Grants 584,826 40.72
Vests (571,008) 30.51
Forfeitures and adjustments (19,002) 38.64
SHARES OUTSTANDING AT DECEMBER31, 2012 1,206,015 $ 38.22
 e compensation expense recorded related to RSUs was $22,158,
$20,100 and $13,928 for the years ended December31, 2012, 2011
and 2010, respectively.  e related total income tax bene t recognized
was $7,746, $7,012 and $4,875 for the years ended December31, 2012,
2011 and 2010, respectively.  e weighted average grant date fair value
for RSUs granted in 2011 and 2010 was $38.05 and $34.46, respectively.
As of December31, 2012, there was $18,378 of unrecognized
compensation cost related to outstanding RSUs.  at cost is expected
to be recognized over a weighted-average period of 1.14 years.  e
total fair value of shares vested during the years ended December31,
2012, 2011 and 2010 was $23,177, $18,060 and $8,844, 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, 2011 1,399,866 $ 29.08
Grants 407,506 41.68
Performance adjustment(1) 59,205 20.39
Vests (649,537) 20.39
Forfeitures and adjustments (12,657) 38.24
PERFORMANCE SHARE UNITS OUTSTANDING, DECEMBER31, 2012 1,204,383 $ 37.51
(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 re ect potential
increases or decreases resulting from the  nancial performance objectives
to be determined at the end of the prospective performance period.  e
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.
 e compensation expense recorded related to PSUs was $14,045,
$14,355 and $10,772 for the years ended December31, 2012, 2011 and
2010, respectively. Portions of the compensation expense recorded during
2012, 2011 and 2010 were reversed in 2012 and 2011, respectively,
since the Company’s level of actual performance as measured against
pre-established performance goals had declined.  e related total
income tax bene t recognized was $4,911, $5,005, and $3,770 for
the years ended December31, 2012, 2011 and 2010, respectively.  e
weighted average grant date fair value for PSUs granted in 2011 and
2010 was $37.83 and $33.12, respectively.