Stock-based Compensation | 9 Months Ended |
Sep. 30, 2014 |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' |
Stock-based Compensation | ' |
13 | Stock-based Compensation | | | | | | | | | | | | | | | |
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The Company’s 2012 Heidrick & Struggles GlobalShare Program (the “2012 Program”) provides for grants of stock options, stock appreciation rights, and other stock-based awards that are valued based upon the grant date fair value of shares. The 2012 Program originally authorized 1,300,000 shares of Common Stock for issuance pursuant to awards under the plan. These awards may be granted to directors, selected employees and independent contractors. On May 22, 2014, the stockholders of the Company approved an amendment to the 2012 Program to increase the number of shares of Common Stock reserved for issuance under the 2012 Program by 700,000 shares. As of September 30, 2014, 772,665 awards have been issued under the 2012 Program and 1,573,375 shares remain available for future awards, which includes 346,040 forfeited awards. The 2012 Program provides that no awards can be granted after May 24, 2022. |
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The Company measures its stock-based compensation costs based on the grant date fair value of the awards and recognizes these costs in the financial statements over the requisite service period. |
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A summary of information with respect to stock-based compensation is as follows: |
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| | Three Months Ended | | | Nine Months Ended | |
September 30, | September 30, |
| | 2014 | | | 2013 | | | 2014 | | | 2013 | |
Salaries and employee benefits | | $ | 1,044 | | | $ | 302 | | | $ | 2,434 | | | $ | 2,475 | |
General and administrative expenses | | | — | | | | — | | | $ | 451 | | | $ | 300 | |
Income tax benefit related to stock-based compensation included in net income | | $ | 465 | | | $ | 118 | | | $ | 1,286 | | | $ | 1,087 | |
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Restricted Stock Units |
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Restricted stock unit activity for the nine months ended September 30, 2014: |
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| | Number of | | | Weighted- | | | | | | | | | |
Restricted | Average | | | | | | | | |
Stock Units | Grant-date | | | | | | | | |
| Fair Value | | | | | | | | |
Outstanding on December 31, 2013 | | | 270,455 | | | $ | 18.64 | | | | | | | | | |
Granted | | | 295,733 | | | | 18.02 | | | | | | | | | |
Vested and converted to common stock | | | (93,159 | ) | | | 19.65 | | | | | | | | | |
Forfeited | | | (10,312 | ) | | | 17.45 | | | | | | | | | |
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Outstanding on September 30, 2014 | | | 462,717 | | | | 18.07 | | | | | | | | | |
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As of September 30, 2014, there was $4.2 million of pre-tax unrecognized compensation expense related to unvested restricted stock units, which is expected to be recognized over a weighted average of 2.8 years. |
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Performance Stock Units |
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The Company grants performance stock units to certain of its senior executives. The performance stock units are generally subject to a cliff vesting at the end of a three year period. The vesting will vary between 0%—200% based on the attainment of operating income goals over the 3 year vesting period. The performance stock units are expensed on a straight-line basis over the 3 year vesting period. |
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In the first quarter of 2014, the Company granted market-based performance stock units to the Chief Executive Officer as part of his initial compensation package. The market-based awards vest after a two-year service period and if the price of the Company’s common stock exceeds specified targets. The fair value of the market-based awards was determined using the Monte-Carlo simulation model. A Monte Carlo simulation model uses stock price volatility and other variables to estimate the probability of satisfying the market conditions and the resulting fair value of the award. Compensation costs related to the market-based awards are recognized regardless of whether the market condition is satisfied, as long as the requisite service has been provided. |
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Performance stock unit activity for the nine months ended September 30, 2014: |
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| | Number of | | | Weighted- | | | | | | | | | |
Performance | Average | | | | | | | | |
Stock Units | Grant-date | | | | | | | | |
| Fair Value | | | | | | | | |
Outstanding on December 31, 2013 | | | 61,321 | | | $ | 19.77 | | | | | | | | | |
Granted | | | 186,705 | | | | 17.19 | | | | | | | | | |
Vested and converted to common stock | | | (9,429 | ) | | | 27.18 | | | | | | | | | |
Forfeited | | | (9,427 | ) | | | 27.18 | | | | | | | | | |
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Outstanding on September 30, 2014 | | | 229,170 | | | | 17.06 | | | | | | | | | |
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As of September 30, 2014, there was $2.2 million of pre-tax unrecognized compensation expense related to unvested performance stock units, which is expected to be recognized over a weighted average of 2.0 years. |