|3 Months Ended|
Mar. 31, 2016
|Disclosure of Compensation Related Costs, Share-based Payments [Abstract]|
The following is a summary of stock-based compensation expense recorded by the Company:
As of March 31, 2016, there was $53.3 million of total unrecognized compensation cost related to stock-based compensation arrangements for stock options, restricted stock awards and other equity awards. This cost is expected to be recognized over a weighted-average period of 2.0 years. Of the stock awards granted during the three months ended March 31, 2016, 65% were stock options and 35% were restricted stock awards. For the three months ended March 31, 2016, the weighted-average fair value per option granted was $6.95 and the weighted-average fair value per restricted stock award granted was $19.36.
The Company follows the fair value recognition provisions in the FASB guidance for stock compensation. Stock-based compensation expense recognized includes compensation expense for all share-based payments using the estimated grant date fair value with forfeitures recognized as they occur. This fair value is amortized to expense on a straight-line basis over the vesting period of the grant.
The fair value of restricted stock awards is generally the stock price on the date of issuance. The fair value for options in Live Nation stock is estimated on the date of grant using the Black-Scholes option-pricing model that uses an expected volatility based on an even weighting of its own traded options and historical volatility and the simplified method for estimating the expected life, which is the period of time that options granted are expected to be outstanding. The risk-free rate for periods within the expected life of the option is based on the United States Treasury note rate. The Company uses the simplified method as it does not believe its historical experience provides a reasonable basis with which to estimate the expected term due to the impact of a number of divestitures after its separation from Clear Channel Communications, Inc., the varying vesting terms of awards issued since the separation and the impact from the type and amount of awards converted pursuant to the Company’s merger with Ticketmaster.
The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.
Reference 1: http://www.xbrl.org/2003/role/presentationRef