Quarterly report pursuant to Section 13 or 15(d)

Employee Benefits and Compensation Plans

v3.20.2
Employee Benefits and Compensation Plans
9 Months Ended
Sep. 30, 2020
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Employee Benefits and Compensation Plans

10.   Employee Benefits and Compensation Plans

Share Option Awards

The following is a summary of option activity under NCLH’s Amended and Restated 2013 Performance Incentive Plan for the nine months ended September 30, 2020:

Weighted-

Number of Share Option Awards

Weighted-Average Exercise Price

Average

Aggregate

Time-

Performance-

Market-

Time-

Performance-

Market-

Contractual

Intrinsic

Based

Based

Based

Based

Based

Based

Term

Value

    

Awards

    

Awards

    

Awards

    

Awards

    

Awards

    

Awards

    

(years)

    

(in thousands)

Outstanding as of January 1, 2020

 

4,918,554

115,489

 

208,333

$

51.84

$

59.11

$

59.43

 

5.42

$

33,413

Exercised

 

(48,221)

(906)

 

44.38

19.00

 

  

 

  

Forfeited and cancelled

 

(272,709)

 

51.22

 

  

 

  

Outstanding as of September 30, 2020

 

4,597,624

114,583

 

208,333

51.95

59.43

59.43

 

4.68

Restricted Share Unit Awards

On July 27, 2020, NCLH granted 2.5 million time-based restricted share unit awards to our employees, which vest on July 27, 2022. Additionally, on July 27, 2020, NCLH granted 0.3 million performance-based restricted share units to certain members of our management team, which vest upon the achievement of certain non-financial performance hurdles and generally require continued employment through July 27, 2022.

On March 2, 2020, NCLH granted 2.4 million time-based restricted share unit awards to our employees, which vest in substantially equal annual installments over three years. Additionally, on March 2, 2020, NCLH granted 0.6 million performance-based restricted share units to certain members of our management team, which vest upon the achievement of certain pre-established performance targets established for the 2020 and 2021 calendar years and the satisfaction of an additional time-based vesting requirement that generally requires continued employment through March 1, 2023.

The following is a summary of restricted share unit activity for the nine months ended September 30, 2020:

Number of

Weighted-

Number of

Weighted-

Number of

Weighted-

Time-Based

Average Grant

Performance-

Average Grant

Market-

Average Grant 

    

Awards

    

Date Fair Value

    

Based Awards

    

Date Fair Value

    

Based Awards

    

Date Fair Value

Non-vested as of January 1, 2020

 

3,245,625

$

54.94

 

1,129,396

$

56.09

 

50,000

$

59.43

Granted

 

5,034,103

24.13

 

945,598

(1)

27.75

 

Vested

 

(1,600,357)

54.20

 

(181,682)

56.33

 

Forfeited or expired

 

(304,685)

44.07

 

(63,026)

47.45

 

Non-vested as of September 30, 2020

 

6,374,686

31.31

 

1,830,286

41.72

 

50,000

59.43

(1) Number of performance-based restricted share units included assumes maximum achievement of performance targets.

The compensation expense recognized for share-based compensation for the periods presented include the following (in thousands):

Three Months Ended

Nine Months Ended

September 30, 

September 30, 

    

2020

    

2019

    

2020

    

2019

Payroll and related expense

$

5,483

$

4,489

$

15,214

$

12,974

Marketing, general and administrative expense

 

20,379

 

20,931

 

65,795

 

69,096

Total share-based compensation expense

$

25,862

$

25,420

$

81,009

$

82,070