Benefit Plans |
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| Benefit Plans |
Benefit Plans
We recognized share-based payment expense of $34,891 and $30,020 for the three months ended September 30, 2017 and 2016, respectively, and $94,588 and $77,890 for the nine months ended September 30, 2017 and 2016, respectively.
2015 Long-Term Stock Incentive Plan
In May 2015, our stockholders approved the Sirius XM Holdings Inc. 2015 Long-Term Stock Incentive Plan (the “2015 Plan”). Employees, consultants and members of our board of directors are eligible to receive awards under the 2015 Plan. The 2015 Plan provides for the grant of stock options, restricted stock awards, restricted stock units and other stock-based awards that the compensation committee of our board of directors deem appropriate. Stock-based awards granted under the 2015 Plan are generally subject to a graded vesting requirement, which is generally three to four years from the grant date. Stock options generally expire ten years from the date of grant. Restricted stock units include performance-based restricted stock units (“PRSUs”), the vesting of which are subject to the achievement of performance goals and the employee's continued employment and generally cliff vest on the three-year anniversary of the grant date. Each restricted stock unit entitles the holder to receive one share of common stock upon vesting. As of September 30, 2017, 167,055 shares of common stock were available for future grants under the 2015 Plan.
Other Plans
We maintain three other share-based benefit plans — the Sirius XM Radio Inc. 2009 Long-Term Stock Incentive Plan, the XM 2007 Stock Incentive Plan and the Amended and Restated Sirius Satellite Radio 2003 Long-Term Stock Incentive Plan. Excluding dividend equivalent units granted as a result of a declared dividend, no further awards may be made under these plans.
The following table summarizes the weighted-average assumptions used to compute the fair value of options granted to employees and members of our board of directors:
There were no options granted to third parties during the three and nine months ended September 30, 2017 and 2016. Since we did not historically pay dividends on our common stock prior to the fourth quarter of 2016, the expected dividend yield used in the Black-Scholes option pricing model was zero for the three and nine months ended September 30, 2016.
The following table summarizes stock option activity under our share-based plans for the nine months ended September 30, 2017:
The weighted average grant date fair value per share of options granted during the nine months ended September 30, 2017 was $1.17. The total intrinsic value of stock options exercised during the nine months ended September 30, 2017 and 2016 was $148,133 and $59,531, respectively. During the nine months ended September 30, 2017, the number of net settled shares which were issued as a result of stock option exercises was 15,092.
We recognized share-based payment expense associated with stock options of $21,454 and $21,484 for the three months ended September 30, 2017 and 2016, respectively, and $61,091 and $59,510 for the nine months ended September 30, 2017 and 2016, respectively.
The following table summarizes the restricted stock unit, including PRSUs, activity under our share-based plans for the nine months ended September 30, 2017:
The total intrinsic value of restricted stock units vesting during the nine months ended September 30, 2017 and 2016 was $46,920 and $16,890, respectively. During the nine months ended September 30, 2017 the number of net settled shares which were issued as a result of restricted stock units vesting totaled 5,226. During the nine months ended September 30, 2017, we granted 929 PRSUs to certain employees. We believe it is probable that the performance target applicable to these and previously granted PRSUs will be achieved.
In connection with the cash dividends paid during the nine months ended September 30, 2017, we granted 162 restricted stock units, including PRSUs, in accordance with the terms of existing award agreements. This grant did not result in any additional incremental share-based payment expense being recognized during the nine months ended September 30, 2017.
We recognized share-based payment expense associated with restricted stock units, including PRSUs, of $13,437 and $8,536 for the three months ended September 30, 2017 and 2016, respectively, and $33,497 and $18,380 for the nine months ended September 30, 2017 and 2016, respectively.
Total unrecognized compensation costs related to unvested share-based payment awards for stock options and restricted stock units granted to employees, members of our board of directors and third parties at September 30, 2017 and December 31, 2016 were $281,311 and $266,045, respectively. The total unrecognized compensation costs at September 30, 2017 are expected to be recognized over a weighted-average period of 2.5 years.
401(k) Savings Plan
Sirius XM sponsors the Sirius XM Radio Inc. 401(k) Savings Plan (the “Sirius XM Plan”) for eligible employees. The Sirius XM Plan allows eligible employees to voluntarily contribute from 1% to 50% of their pre-tax eligible earnings, subject to certain defined limits. We match 50% of an employee’s voluntary contributions per pay period on the first 6% of an employee’s pre-tax salary up to a maximum of 3% of eligible compensation. We may also make additional discretionary matching, true-up matching and non-elective contributions to the Sirius XM Plan. Employer matching contributions under the Sirius XM Plan vest at a rate of 33.33% for each year of employment and are fully vested after three years of employment for all current and future contributions. Our cash employer matching contributions are not used to purchase shares of our common stock on the open market, unless the employee elects our common stock as their investment option for this contribution. We recognized $1,775 and $1,640 in expense during three months ended September 30, 2017 and 2016, respectively, and $5,292 and $4,857 in expense during nine months ended September 30, 2017 and 2016, respectively, in connection with the Sirius XM Plan.
Sirius XM Holdings Inc. Deferred Compensation Plan
In 2015, we adopted the Sirius XM Holdings Inc. Deferred Compensation Plan (the “DCP”). The DCP allows members of our board of directors and certain eligible employees to defer all or a portion of their base salary, cash incentive compensation and/or board of directors’ cash compensation, as applicable. Pursuant to the terms of the DCP, we may elect to make additional contributions beyond amounts deferred by participants, but we are under no obligation to do so. We have established a grantor (or “rabbi”) trust to facilitate the payment of our obligations under the DCP.
Contributions to the DCP, net of withdrawals, for the three months ended September 30, 2017 and 2016, were $240 and $215, respectively, and for the nine months ended September 30, 2017 and 2016, were $7,595 and $4,169, respectively. As of September 30, 2017, the fair value of the investments held in the trust was $13,890, which is included in Other long-term assets in our unaudited consolidated balance sheets and is classified as trading securities. Trading gains and losses associated with these investments are recorded in Other income within our unaudited consolidated statements of comprehensive income. The associated liability is recorded within Other long-term liabilities in our unaudited consolidated balance sheets, and any increase or decrease in the liability is recorded in General and administration expense within our unaudited consolidated statements of comprehensive income. For the three and nine months ended September 30, 2017 and 2016, we recorded an immaterial amount of unrealized gains on investments held in the trust.
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