Share-Based Compensation |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||
| Share-Based Payment Arrangement, Recognized Amount [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
| Share-Based Compensation | Share-Based Compensation In February 2024, the Board adopted the 2024 Long-Term Incentive Plan (the “LTIP”) to provide certain key employees with the right to receive cash awards providing an opportunity to participate in the appreciation of the Company’s value and in order to retain these key employees and reward them for contributing to the success of the Company. Participants in the LTIP may be granted a number of notional interests, or phantom stock units ("PSUs"). Each PSU represents the right to receive payment of the value of a share of the Company’s common stock upon vesting. PSUs may be granted subject to vesting conditions, which may include service-based and/or performance-based vesting conditions tied to corporate and/or individual achievement objectives. An employee must remain employed through the date of payment of an award to be eligible for any payout under the LTIP. These PSUs are settled in cash upon vesting and accounted for as liability-based awards. Performance-based PSUs During the first half of 2025, the Company granted a total "target" award of 168,088 performance-based PSUs to certain executive officers and other key employees of the Company. The payout value of the performance-based PSUs granted under the LTIP will be determined based on the achievement of specific, pre-established corporate performance objectives, and in part on individual performance, during the applicable three-year performance period (the "Performance Cycle"). The maximum payout level for the performance-based PSUs is 150% of the “target” award. The following table presents the summary of the performance-based PSU grants as of June 30, 2025:
These performance-based PSUs vest at the end of the Performance Cycle beginning with the year of the grant, and then only if, and to the extent that, the Company’s performance during the Performance Cycle achieves the threshold established by the Compensation Committee of the Board. Each annual performance result is based on the Company’s annual market share growth and its annual combined ratio. The vested number of performance-based PSUs for each grantee is based on the average of the Company's three annual performance results combined with the individual's performance during the Performance Cycle. The cash payout amount for each unit of the vested performance-based PSUs is equal to the average closing price per share of the Company’s common stock for the 30 calendar days preceding the determination of the final number of vested PSUs for each grantee at the end of the Performance Cycle for the 2024 grants, and the average closing price per share of the Company’s common stock for the five trading days following the Company’s public release of its financial results for the final calendar year in the Performance Cycle for the 2025 grants. Liabilities for the expected cash payout and associated compensation expenses are recognized based on management’s best estimate of the number of the performance-based PSUs expected to be vested resulting from the probable outcome of the performance-based vesting conditions, combined with the market price of the Company's common stock at the end of each reporting period. If the performance-based vesting conditions are not expected to be met for the Performance Cycle, no compensation cost will be recognized and any recognized compensation cost will be reversed. As of June 30, 2025, 11,465 of the total performance-based PSUs granted under the LTIP were forfeited because the recipients were no longer employed by the Company. Restricted PSUs The Company, from time to time, grants restricted PSUs to certain key employees, typically to retain such key employees. The restricted PSUs vest in three equal annual installments on each of the first three anniversaries of the grant date. The payout value of the restricted PSUs granted under the LTIP will be determined based on the closing price per share of the Company's common stock at each vesting date. The vested amount of the restricted PSUs is paid at the end of each annual vesting period. The Company granted 63,909 restricted PSUs during the first half of 2025, and a total of 103,887 restricted PSUs since the start of the LTIP as of June 30, 2025, 726 of which were forfeited because the recipients were no longer employed by the Company. The Company recorded share-based compensation expense of approximately $3.3 million and $0.9 million for the three months ended June 30, 2025 and 2024, respectively, and $2.6 million and $1.7 million for the six months ended June 30, 2025 and 2024, respectively, associated with the performance-based and restricted PSUs, which are included in other operating expenses in its consolidated statements of operations. The Company recorded approximately $7.2 million and $4.6 million of accrued share-based compensation liability associated with the performance-based and restricted PSUs at June 30, 2025 and December 31, 2024, respectively, which are included in other liabilities in its consolidated balance sheets. A total of 1,716 restricted PSUs were vested during the three and six months ended June 30, 2025.
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