Herbalife Ltd. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Share-Based Compensation

Share-Based Compensation

9 Months Ended

Sep. 30, 2018

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

7. Share-Based Compensation

The Company has share-based compensation plans, which are more fully described in Note 9, Share-Based Compensation, to the Consolidated Financial Statements included in the 2017 10-K. During the nine months ended September 30, 2018, the Company granted restricted stock units subject to service conditions and service and performance conditions.

Share-based compensation expense amounted to $11.6 million and $9.9 million for the three months ended September 30, 2018 and 2017, respectively, and $31.8 million and $32.6 million for the nine months ended September 30, 2018 and 2017, respectively. As of September 30, 2018, the total unrecognized compensation cost related to all non-vested stock awards was $67.6 million and the related weighted-average period over which it is expected to be recognized is approximately 1.2 years.

The following tables summarize the activity under all share-based compensation plans for the nine months ended September 30, 2018:

	Number of Awards			Weighted-Average Exercise Price Per Award		Weighted-Average Remaining Contractual Term	Aggregate Intrinsic Value(1)
	(in thousands)						(in millions)
Outstanding as of December 31, 2017(2)(3)		19,193		$	23.36	6.2 years	$	212.0
Granted		—		$	—
Exercised(4)		(9,919	)	$	20.76
Forfeited(5)		(303	)	$	28.77
Outstanding as of September 30, 2018(2)(3)		8,971		$	26.05	6.1 years	$	255.7
Exercisable as of September 30, 2018(6)		5,654		$	23.90	5.0 years	$	173.3

(1)	The intrinsic value is the amount by which the current market value of the underlying stock exceeds the exercise price of the stock awards.

(2)	Includes less than 0.1 million and 0.2 million market condition SARs as of September 30, 2018 and December 31, 2017, respectively.

(3)	Includes 3.1 million and 6.2 million performance condition SARs as of September 30, 2018 and December 31, 2017, respectively, which represent the maximum amount that can vest.

(4)	Includes 0.2 million market condition and 3.1 million performance condition SARs.

(5)	Includes 0.1 million performance condition SARs.

(6)	Includes less than 0.1 million market condition and 1.8 million performance condition SARs.

There were no SARs granted during the three and nine months ended September 30, 2018. The weighted-average grant date fair value of SARs granted during the three and nine months ended September 30, 2017 was $15.66 and $14.18, respectively. The total intrinsic value of SARs exercised during the three months ended September 30, 2018 and 2017 was $107.3 million and $3.0 million, respectively. The total intrinsic value of SARs exercised during the nine months ended September 30, 2018 and 2017 was $294.3 million and $100.0 million, respectively.

The following table summarizes the activities for stock units for the nine months ended September 30, 2018:

	Number of Shares			Weighted-Average Grant Date Fair Value Per Share
	(in thousands)
Outstanding and nonvested as of December 31, 2017(1)		326		$	34.34
Granted(2)		1,375		$	43.67
Vested		(42	)	$	35.75
Forfeited		(41	)	$	43.15
Outstanding and nonvested as of September 30, 2018(1)		1,618		$	42.01

(1)	Includes 708,836 and 268,776 performance-based stock unit awards as of September 30, 2018 and December 31, 2017, respectively, which represents the maximum amount that can vest.

(2)	Includes 440,060 performance-based stock unit awards, which represents the maximum amount that can vest.

There were no stock units that vested during the three months ended September 30, 2018. The total vesting date fair value of stock units which vested during the three months ended September 30, 2017 was $0.1 million. The total vesting date fair value of stock units which vested during the nine months ended September 30, 2018 and 2017 was $2.1 million and $1.9 million, respectively.