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Note 17 - Compensation Plans | 12 Months Ended
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Dec. 31, 2020
Notes to Financial Statements |
Share-based Payment Arrangement [Text Block] | 17. Compensation Plans: KSOP We have established the KSOP for the benefit of eligible employees in the U.S. and Puerto Rico. The KSOP includes both an employee savings component and an employee stock ownership component. The purpose of the combined plan is to enable our employees to participate in a tax-deferred savings arrangement under Internal Revenue Service Code Sections 401(a) and 401(k) (the “Code”), and to provide our employees equity participation through the employee stock ownership plan (“ESOP”) accounts. Under the KSOP, eligible employees may make pre-tax and after-tax cash contributions as a percentage of their compensation, subject to certain limitations under the applicable provisions of the Code. The maximum pre-tax contribution that can be made to the 401(k) account as determined under the provisions of Code Section 401(g) is $19.5 thousand for 2020, $19.0 thousand for 2019 and $18.5 thousand for 2018. Certain eligible participants (age 50 and older) may contribute an additional $6.5 thousand on a pre-tax basis for 2020 and $6.0 thousand for 2019 and 2018. After-tax contributions are limited to 10.0% of a participant’s compensation. The matching contributions prior to April 1, 2018 were primarily equal to 75.0% of the first 6.0% of the participant’s contribution. Effective April 1, 2018, we amended the KSOP to increase the matching contributions to 87.5% of the first 6.0% of the participant’s contribution. Effective January 1, 2019, we increased the matching contributions to 100.0% of the first 6.0% of the participant’s contribution. The 401(k) matching contributions under the KSOP for the years ended December 31, 2020, 2019 and 2018, were $31.6 million, $31.0 million, $22.0 million, respectively; which, at our option, were funded in cash or in common stock issued from treasury shares. In 2005, we established the ISO Profit Sharing Plan (the “Profit Sharing Plan”), a defined contribution plan, to replace the qualified pension plan for all eligible employees hired on or after March 1, 2005. The Profit Sharing Plan is a component of the KSOP. Eligible employees participated in the Profit Sharing Plan if they completed 1,000 hours of service each plan year and were employed on December 31 of that year. We can make a discretionary contribution to the Profit Sharing Plan based on our annual performance. Participants vest once they have completed four years and 1,000 hours of service. For the years ended December 31, 2020, 2019 and 2018, there were no profit sharing contributions. Equity Compensation Plans All of our outstanding stock options, restricted stock and PSUs are covered under our 2013 Incentive Plan or 2009 Incentive Plan. Awards under our 2013 Incentive Plan may include one or more of the following types: (i) stock options (both nonqualified and incentive stock options), (ii) stock appreciation rights, (iii) restricted stock, (iv) restricted stock units, (v) performance awards, (vi) other share-based awards, and (vii) cash. Employees, directors and consultants are eligible for awards under our 2013 Incentive Plan. We issued common stock under these plans from our treasury shares. The number of shares of common stock available for issuance under our 2013 Incentive Plan is 15,700,000 and such amount shall be reduced on a 1-for-1 basis for every share issued that is subject to an option or stock appreciation right and on a 2.5-for-1 basis for every share issued that is subject to an award other than an option or stock appreciation right. Shares that were subject to an award under our 2013 Incentive Plan that become forfeited, expired or otherwise terminated shall again be available for issuance under our 2013 Incentive Plan on a 1-for-1 basis if the shares were subject to options or stock appreciation rights, and on an 2.5-for-1 basis if the shares were subject to awards other than options or stock appreciation rights. We have granted equity awards to key employees and directors. The ultimate realization of the PSUs may range from 0% to 200% of the recipient’s target levels established on the grant date. As of December 31, 2020, there were 3,104,938 shares of common stock reserved and available for future issuance. A summary of the status of the stock options, restricted stock and PSUs awarded under our 2013 Incentive Plan as of December 31, 2020, 2019 and 2018 and changes during the years is presented below.
|  | Stock Option |  |  | Restricted Stock |  |  | PSU |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Weighted |  |  |  |  |  |  |  | Weighted |
|  |  |  |  |  | Weighted |  |  |  |  |  |  |  |  |  |  | Average |  |  |  |  |  |  |  | Average |
|  |  |  |  |  | Average |  |  | Aggregate |  |  |  |  |  |  | Grant Date |  |  |  |  |  |  |  | Grant Date |
|  | Number |  |  | Exercise |  |  | Intrinsic |  |  | Number |  |  | Fair Value |  |  | Number |  |  |  | Fair Value |
|  | of Options |  |  | Price |  |  | Value |  |  | of Shares |  |  | Per Share |  |  | of Shares |  |  |  | Per Share |
|  |  |  |  |  |  |  |  |  | (in millions) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Outstanding at January 1, 2018 |  |  | 8,907,109 |  |  | $ | 53.31 |  |  | $ | 380.2 |  |  |  | 604,464 |  |  | $ | 78.28 |  |  |  | — |  |  |  | $ | — |
Granted |  |  | 958,332 |  |  | $ | 104.23 |  |  |  |  |  |  |  | 207,041 |  |  | $ | 104.34 |  |  |  | 46,705 |  |  |  | $ | 140.70 |
Exercised or lapsed |  |  | (2,752,735 | ) |  | $ | 33.00 |  |  | $ | 213.0 |  |  |  | (225,205 | ) |  | $ | 76.88 |  |  |  | — |  |  |  | $ | — |
Canceled, expired or forfeited |  |  | (292,660 | ) |  | $ | 79.16 |  |  |  |  |  |  |  | (52,965 | ) |  | $ | 82.64 |  |  |  | (4,655 | ) |  |  | $ | 140.70 |
Outstanding at December 31, 2018 |  |  | 6,820,046 |  |  | $ | 67.27 |  |  | $ | 284.9 |  |  |  | 533,335 |  |  | $ | 88.55 |  |  |  | 42,050 |  |  |  | $ | 140.70 |
Granted |  |  | 920,398 |  |  | $ | 135.64 |  |  |  |  |  |  |  | 167,231 |  |  | $ | 135.82 |  |  |  | 51,792 |  |  |  | $ | 173.59 |
Dividend reinvestment |  |  | — |  |  | $ | — |  |  |  |  |  |  |  | — |  |  | $ | — |  |  |  | 550 |  |  |  | Not applicable |
Exercised or lapsed |  |  | (1,131,970 | ) |  | $ | 51.20 |  |  | $ | 101.0 |  |  |  | (242,815 | ) |  | $ | 84.60 |  |  |  | — |  |  |  | $ | — |
Canceled, expired or forfeited |  |  | (175,660 | ) |  | $ | 92.27 |  |  |  |  |  |  |  | (29,022 | ) |  | $ | 109.72 |  |  |  | (432 | ) |  |  | $ | 134.24 |
Outstanding at December 31, 2019 |  |  | 6,432,814 |  |  | $ | 79.51 |  |  | $ | 449.2 |  |  |  | 428,729 |  |  | $ | 107.96 |  |  |  | 93,960 |  |  |  | $ | 158.50 |
Granted |  |  | 936,843 |  |  | $ | 159.28 |  |  |  |  |  |  |  | 163,441 |  |  | $ | 159.96 |  |  |  | 50,736 |  |  |  | $ | 192.93 |
Dividend reinvestment |  |  | — |  |  | $ | — |  |  |  |  |  |  |  | — |  |  | $ | — |  |  |  | 913 |  |  |  | Not applicable |
Exercised or lapsed |  |  | (1,623,740 | ) |  | $ | 56.83 |  |  | $ | 189.8 |  |  |  | (178,317 | ) |  | $ | 102.00 |  |  |  | — |  |  |  |  |  |
Canceled, expired or forfeited |  |  | (134,140 | ) |  | $ | 125.95 |  |  |  |  |  |  |  | (23,799 | ) |  | $ | 124.40 |  |  |  | — |  |  |  |  |  |
Outstanding at December 31, 2020 |  |  | 5,611,777 |  |  | $ | 98.28 |  |  | $ | 613.4 |  |  |  | 390,054 |  |  | $ | 131.63 |  |  |  | 145,609 |  |  |  | $ | 170.75 |
Exercisable at December 31, 2020 |  |  | 3,494,164 |  |  | $ | 76.84 |  |  | $ | 456.9 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Exercisable at December 31, 2019 |  |  | 4,175,855 |  |  | $ | 65.05 |  |  | $ | 352.0 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Nonvested at December 31, 2020 |  |  | 2,117,613 |  |  |  |  |  |  |  |  |  |  |  | 390,054 |  |  |  |  |  |  |  | 102,999 |  |  |  |  |  |
Expected to vest at December 31, 2020 |  |  | 1,900,586 |  |  |  |  |  |  |  |  |  |  |  | 354,959 |  |  |  |  |  |  |  | 268,294 |  | (1) |  |  |  |
_______________
(1) | Includes estimated performance achievement
The fair value of our stock options granted was estimated on the date of grant using a Black-Scholes option valuation model that uses the weighted-average assumptions noted in the following table during the years ended December 31:
|  | 2020 |  |  | 2019 |  |  | 2018 |
Expected volatility |  |  | 18.48 | % |  |  | 18.76 | % |  |  | 18.51 | %
Risk-free interest rate |  |  | 1.51 | % |  |  | 2.25 | % |  |  | 2.53 | %
Expected term in years |  |  | 4.3 |  |  |  | 4.4 |  |  |  | 4.4 |
Dividend yield |  |  | 0.71 | % |  |  | 0.80 | % |  |  | — | %
Weighted average grant date fair value per stock option |  | $ | 25.87 |  |  | $ | 24.13 |  |  | $ | 21.48 |
A summary of the status of our nonvested options and changes are presented below:
|  | Number of Options |  |  | Weighted Average Grant-Date Fair Value Per Share |
Nonvested balance at January 1, 2018 |  |  | 2,911,770 |  |  | $ | 14.86 |
Granted |  |  | 958,332 |  |  | $ | 21.48 |
Vested |  |  | (1,117,513 | ) |  | $ | 14.79 |
Cancelled or expired |  |  | (292,660 | ) |  | $ | 15.33 |
Nonvested balance at December 31, 2018 |  |  | 2,459,929 |  |  | $ | 17.41 |
Granted |  |  | 920,398 |  |  | $ | 24.13 |
Vested |  |  | (947,708 | ) |  | $ | 17.29 |
Cancelled or expired |  |  | (175,660 | ) |  | $ | 17.77 |
Nonvested balance at December 31, 2019 |  |  | 2,256,959 |  |  | $ | 20.17 |
Granted |  |  | 936,843 |  |  | $ | 25.87 |
Vested |  |  | (942,049 | ) |  | $ | 18.30 |
Cancelled or expired |  |  | (134,140 | ) |  | $ | 22.40 |
Nonvested balance at December 31, 2020 |  |  | 2,117,613 |  |  | $ | 23.39 |
Intrinsic value for stock options is calculated based on the exercise price of the underlying awards and the quoted price of our common stock as of the reporting date. Excess tax benefits of $42.9 million, $23.2 million and $48.9 million from exercised stock options were recorded as income tax benefit in our accompanying consolidated statements of operations for the years ended December 31, 2020, 2019 and 2018, respectively. Stock-based compensation expense for the years ended December 31, 2020, 2019 and 2018 was $47.6 million, $42.7 million and $38.5 million, respectively. Cash received from stock option exercises for the years ended December 31, 2020, 2019 and 2018 was $88.0 million, $52.4 million and $87.3 million, respectively. As of December 31, 2020, the weighted average remaining contractual terms were 6.0 years and 4.7 years for outstanding and exercisable stock options, respectively. As of December 31, 2019, the weighted average remaining contractual terms were 5.8 years and 4.6 years for outstanding and exercisable stock options, respectively. For the year ended December 31, 2020 and 2019, certain employees had restricted stock vesting and covered the aggregate statutory minimum tax withholding of $4.1 million and $5.5 million through a net settlement of 27,890 shares and 40,578 shares, respectively. As of December 31, 2020, there was $82.4 million of total unrecognized compensation cost, exclusive of the impact of vesting upon retirement eligibility, related to nonvested share-based compensation arrangements granted under our 2013 Incentive Plan. That cost is expected to be recognized over a weighted-average period of 2.3 years. The total grant date fair value of options vested during the years ended December 31, 2020, 2019 and 2018 was $20.1 million, $17.4 million and $16.8 million, respectively. The total grant date fair value of restricted stock vested during the years ended December 31, 2020, 2019 and 2018 was $22.3 million, $20.2 million and $18.6 million, respectively. The total grant date fair value of PSUs vested during the years ended December 31, 2020, 2019 and 2018 was $8.2 million, $4.2 million and $1.5 million, respectively. Our UK Sharesave Plan offers qualifying employees in the United Kingdom the opportunity to own shares of our common stock. Employees who elect to participate are granted stock options, of which the exercise price is equal to the adjusted closing price of our common stock on the grant date discounted by 5%, and enter into a savings contract, the proceeds of which are then used to exercise the options upon the three-year maturity of the savings contract. During the years ended December 31, 2020, 2019 and 2018, we granted 8,174, 18,713 and 19,247 stock options under the UK Sharesave Plan at a discounted exercise price of $159.98, $136.35 and $101.27, respectively. As of December 31, 2020, there were 454,178 shares of common stock reserved and available for future issuance under our UK Sharesave Plan. We also offer eligible employees the opportunity to participate in an ESPP. Under our ESPP, participating employees may authorize payroll deductions of up to 20.0% of their regular base salary and up to 50.0% of their short-term incentive compensation, both of which in total may not exceed $25.0 thousand in any calendar year, to purchase shares of our common stock at a 5.0% discount of its fair market value at the time of purchase. In accordance with ASC 718, our ESPP is noncompensatory as the purchase discount is 5.0% or less from the fair market value, substantially all employees that meet limited employment qualifications may participate, and it incorporates no option features. During the years ended December 31, 2020, 2019 and 2018, we issued 32,502, 30,705 and 30,550 shares of common stock at a weighted average discounted price of $164.44, $141.17 and $104.71, respectively. As of December 31, 2020, there were 1,260,266 shares of common stock reserved and available for future issuance under our ESPP.

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