Stock-Based Compensation

6 Months Ended

Jun. 30, 2023

7. Stock-Based Compensation

For the six months ended June 30, 2023, we granted stock only stock appreciation rights (“SOSARs”) on 71 shares of our common stock to eligible employees. The weighted-average grant date fair value of the SOSARs was $520.23 per share with a weighted-average exercise price of $1,611.18 per share. The SOSARs vest in two equal installments on the second and third anniversary of the grant date. For the six months ended June 30, 2023, 85 SOSARs were exercised, and 15 SOSARs were forfeited.

For the six months ended June 30, 2023, we granted restricted stock units (“RSUs”) on 34 shares of our common stock to eligible employees. The weighted-average grant date fair value of the RSUs was $1,639.50 per share. The RSUs generally vest in two equal installments on the second and third anniversary of the grant date. For the six months ended June 30, 2023, 21 RSUs vested and 6 RSUs were forfeited.

For the six months ended June 30, 2023, we awarded performance share units (“PSUs”) on 24 shares of our common stock at target performance to eligible employees. These PSUs are subject to service, market and performance vesting conditions. The weighted-average grant date fair value of the PSUs was $1,606.91 per share, and the quantity of shares that will vest range from 0% to 300% of the targeted number of shares. If the defined minimum targets are not met, then no shares will vest. Further, in no event may more than 100% of the target number of PSUs vest if our 3-year total shareholder return is below the 25^th percentile of the constituent companies comprising the S&P 500 on the day of grant. For the six months ended June 30, 2023, 49 PSUs vested, and 3 PSUs were forfeited.

The following table sets forth total stock-based compensation expense:



	Three months ended				Six months ended
	June 30,				June 30,
	2023		2022		2023		2022
Stock-based compensation	$	31,467	$	29,142	$	52,137	$	53,219
Stock-based compensation, net of income taxes	$	27,205	$	24,924	$	43,901	$	45,474
Total capitalized stock-based compensation included in leasehold improvements, property and equipment, net on the condensed consolidated balance sheets	$	795	$	511	$	1,381	$	998
Excess tax benefit on stock-based compensation recognized in provision for income taxes on the condensed consolidated statements of income and comprehensive income	$	11,848	$	2,711	$	22,010	$	20,672