v3.19.2

Stock-Based Compensation | 12 Months Ended
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Jun. 30, 2019
Share-based Payment Arrangement [Abstract] |
Stock-Based Compensation | STOCK-BASED COMPENSATION Incentive Equity Awards. The Broadridge Financial Solutions, Inc. 2007 Omnibus Award Plan (the “2007 Plan”) and 2018 Omnibus Award Plan (the “2018 Plan”) provide for the granting of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, phantom stock awards, stock bonuses and performance compensation awards to employees, non-employee directors, and other key individuals who perform services for the Company. The 2018 Plan was approved by shareholders in November 2018 and replaced the 2007 Plan. The accounting for stock-based compensation requires the measurement of stock-based compensation expense to be recognized in the Consolidated Statements of Earnings based on the fair value of the award on the date of grant. In accordance with the 2007 Plan and 2018 Plan, the Company’s stock-based compensation consists of the following: Stock Options: Stock options are granted to employees at exercise prices equal to the fair market value of the Company’s common stock on the dates of grant. Stock options are generally issued under a graded vesting schedule, meaning that they vest ratably over four years, and have a term of 10 years. A portion of the stock options granted in fiscal year 2018 have a cliff vesting schedule meaning that they fully vest in four years from the grant date and have a term of 10 years. Compensation expense for stock options under a graded vesting schedule is recognized over the requisite service period for each separately vesting portion of the stock option award. Compensation expense for stock options under a cliff vesting schedule is recognized equally over the vesting period of four years with 25 percent of the cost recognized over each 12 months period net of estimated forfeitures. Time-based Restricted Stock Units: The Company has a time-based restricted stock unit (“RSU”) program under which RSUs representing the right to receive one share of the Company’s common stock for each vested RSU are granted. Time-based RSUs typically vest two and one-half years from the date of grant. The Company records stock compensation expense for time-based RSUs net of estimated forfeitures on a straight-line basis over the vesting period. Performance-based Restricted Stock Units: The Company has a performance-based RSU program under which RSUs representing the right to receive one share of the Company’s common stock for each vested RSU are granted. RSUs vest upon the achievement by the Company of specific performance metrics. The Company records stock compensation expense for performance-based RSUs net of estimated forfeitures on a straight-line basis over the performance period, plus a subsequent vesting period, which typically totals approximately two and one-half years from the date of grant. The activity related to the Company’s incentive equity awards for the fiscal years ended June 30, 2019, 2018 and 2017 consisted of the following:
|  | Stock Options |  | Time-based RSUs |  | Performance-based RSUs
|  | Number of Options |  | Weighted Average Exercise Price |  | Number of Shares |  | Weighted Average Grant-Date Fair Value |  | Number of Shares |  | Weighted Average Grant-Date Fair Value
Balances at July 1, 2016 |  | 7,059,067 |  |  | $ | 32.57 |  |  | 1,202,896 |  |  | $ | 44.34 |  |  | 468,516 |  |  | $ | 47.15 |
Granted |  | 568,465 |  |  | 67.15 |  |  | 531,301 |  |  | 64.38 |  |  | 225,731 |  |  | 64.52 |
Exercised (a) |  | (2,384,449 | ) |  | 25.44 |  |  | — |  |  | — |  |  | — |  |  | — |
Vesting of RSUs (b) |  | — |  |  | — |  |  | (586,617 | ) |  | 40.00 |  |  | (171,082 | ) |  | 38.50 |
Expired/forfeited |  | (105,442 | ) |  | 36.13 |  |  | (72,987 | ) |  | 53.74 |  |  | (52,303 | ) |  | 50.38 |
Balances at June 30, 2017 |  | 5,137,641 |  |  | $ | 39.63 |  |  | 1,074,593 |  |  | $ | 55.98 |  |  | 470,862 |  |  | $ | 58.26 |
Granted |  | 1,079,442 |  |  | 93.42 |  |  | 456,217 |  |  | 78.86 |  |  | 198,485 |  |  | 76.71 |
Exercised (a) |  | (1,654,877 | ) |  | 31.09 |  |  | — |  |  | — |  |  | — |  |  | — |
Vesting of RSUs (b) |  | — |  |  | — |  |  | (463,561 | ) |  | 52.86 |  |  | (150,068 | ) |  | 52.96 |
Expired/forfeited |  | (83,918 | ) |  | 42.89 |  |  | (84,850 | ) |  | 60.18 |  |  | (123,590 | ) |  | 43.00 |
Balances at June 30, 2018 |  | 4,478,288 |  |  | $ | 55.69 |  |  | 982,399 |  |  | $ | 67.72 |  |  | 395,689 |  |  | $ | 74.29 |
Granted |  | 528,978 |  |  | 98.72 |  |  | 360,147 |  |  | 121.11 |  |  | 133,213 |  |  | 116.53 |
Exercised (a) |  | (784,372 | ) |  | 39.94 |  |  | — |  |  | — |  |  | — |  |  | — |
Vesting of RSUs (b) |  | — |  |  | — |  |  | (430,270 | ) |  | 63.97 |  |  | (198,420 | ) |  | 64.50 |
Expired/forfeited |  | (21,280 | ) |  | 94.14 |  |  | (92,977 | ) |  | 76.57 |  |  | (4,705 | ) |  | 80.57 |
Balances at June 30, 2019 (c) |  | 4,201,614 |  |  | $ | 63.85 |  |  | 819,299 |  |  | $ | 92.15 |  |  | 325,777 |  |  | $ | 97.43 |
(a) | Stock options exercised during the fiscal years ended June 30, 2019, 2018 and 2017 had intrinsic values of $65.8 million, $116.3 million and $104.7 million, respectively.
(b) | Time-based RSUs that vested during the fiscal years ended June 30, 2019, 2018 and 2017 had a total fair value of $45.4 million, $50.6 million and $39.8 million, respectively. Performance-based RSUs that vested during the fiscal years ended June 30, 2019, 2018 and 2017 had a total fair value of $21.7 million, $19.1 million and $11.6 million, respectively.
(c) | As of June 30, 2019, the Company’s outstanding stock options using the fiscal year-end share price of $127.68 had an aggregate intrinsic value of $268.2 million. As of June 30, 2019, the Company’s outstanding “in the money” vested stock options using the fiscal year-end share price of $127.68 had an aggregate intrinsic value of $195.8 million. As of June 30, 2019, time-based RSUs and performance-based RSUs expected to vest using the fiscal year-end share price of $127.68 (approximately 0.8 million and 0.3 million shares, respectively) had an aggregate intrinsic value of $100.1 million and $39.8 million, respectively. Performance-based RSUs granted in the table above represent initial target awards, and performance adjustments for (i) change in shares issued based upon attainment of performance goals determined in the period, and (ii) estimated change in shares issued resulting from attainment of performance goals to be determined at the end of the prospective performance period.
The tables below summarize information regarding the Company’s outstanding and exercisable stock options as of June 30, 2019:
|  | Outstanding Options
|  | Options Outstanding |  | Weighted Average Remaining Contractual Term (in years) |  | Weighted Average Exercise Price Per Share |  | Aggregate Intrinsic Value (in millions) (a)
Range of Exercise Prices |
$0.01 to $35.00 |  | 607,688 |  |  | 2.90 |  | $ | 23.08 |  |  |
$35.01 to $50.00 |  | 580,519 |  |  | 4.51 |  | $ | 37.56 |  |  |
$50.01 to $65.00 |  | 952,544 |  |  | 6.09 |  | $ | 52.40 |  |  |
$65.01 to $80.00 |  | 488,967 |  |  | 7.54 |  | $ | 67.32 |  |  |
$80.01 to $95.00 |  | 1,044,179 |  |  | 8.52 |  | $ | 93.40 |  |  |
$95.01 to $110.00 |  | 527,717 |  |  | 9.59 |  | $ | 98.72 |  |  |
|  | 4,201,614 |  |  | 6.62 |  | $ | 63.85 |  |  | $ | 268.2 |
|  | Exercisable Options
Range of Exercise Prices |  | Options Exercisable |  | Weighted Average Remaining Contractual Term (in years) |  | Weighted Average Exercise Price Per Share |  | Aggregate Intrinsic Value (in millions) (a)
$0.01 to $35.00 |  | 607,688 |  |  | 2.90 |  | $ | 23.08 |  |  |
$35.01 to $50.00 |  | 580,519 |  |  | 4.51 |  | $ | 37.56 |  |  |
$50.01 to $65.00 |  | 808,864 |  |  | 6.01 |  | $ | 52.48 |  |  |
$65.01 to $80.00 |  | 225,463 |  |  | 7.53 |  | $ | 67.32 |  |  |
$80.01 to $95.00 |  | 141,699 |  |  | 8.33 |  | $ | 92.46 |  |  |
$95.01 to $110.00 |  | 23,447 |  |  | 9.37 |  | $ | 107.52 |  |  |
|  | 2,387,680 |  |  | 5.17 |  | $ | 45.68 |  |  | $ | 195.8 |
(a) Calculated using the closing stock price on the last trading day of fiscal year 2019 of $127.68, less the option exercise price, multiplied by the number of instruments. Stock-based compensation expense of $58.4 million, $55.1 million, and $46.1 million was recognized in the Consolidated Statements of Earnings for the fiscal years ended June 30, 2019, 2018 and 2017, respectively, as well as related tax benefits of $13.5 million, $15.7 million, and $15.9 million, respectively. As of June 30, 2019, the total remaining unrecognized compensation cost related to non-vested stock options and RSU awards amounted to $17.1 million and $48.9 million, respectively, which will be amortized over the weighted-average remaining requisite service periods of 2.8 years and 1.6 years, respectively. In April 2013, the Company began reissuing treasury stock to satisfy stock option exercises and issuances under the Company’s RSU awards. From time to time, the Company may repurchase shares of its common stock under its authorized share repurchase programs. The Company repurchased 3.2 million shares in fiscal year 2019 under our share repurchase program as compared to 2.2 million shares repurchased in fiscal year 2018, which excludes shares withheld by the Company to cover payroll taxes on the vesting of RSU awards, which are also accounted for as treasury stock. The Company considers several factors in determining when to execute share repurchases, including, among other things, actual and potential acquisition activity, cash balances and cash flows, issuances due to employee benefit plan activity, and market conditions. The following table presents the assumptions used to determine the fair values of the stock option grants using the Binomial options pricing model during the fiscal years ended June 30, 2019, 2018 and 2017:
|  | Fiscal Year Ended June 30, 2019 |  | Fiscal Year Ended June 30, 2018 |  | Fiscal Year Ended June 30, 2017
Graded Vesting |  |  |  |  |  |
Risk-free interest rate |  | 2.5 | % |  | 2.7 | % |  | 2.1 | %
Dividend yield |  | 2.0 | % |  | 1.6 | % |  | 2.0 | %
Weighted-average volatility factor |  | 26.0 | % |  | 23.8 | % |  | 23.1 | %
Weighted-average expected life (in years) |  | 5.9 |  |  | 6.5 |  |  | 6.5 |
Weighted-average fair value (in dollars) |  | $ | 22.12 |  |  | $ | 22.16 |  |  | $ | 13.74 |
|  | Fiscal Year Ended June 30, 2018
Cliff Vesting |  |
Risk-free interest rate |  | 2.7 | %
Dividend yield |  | 1.6 | %
Weighted-average volatility factor |  | 23.8 | %
Weighted-average expected life (in years) |  | 6.0 |
Weighted-average fair value (in dollars) |  | $ | 21.65 |

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