STOCK-BASED COMPENSATION

9 Months Ended

Sep. 30, 2025

Share-Based Payment Arrangement [Abstract]

Stock-based compensation is based on the fair value of the award on the date of grant, which is recognized over the related service period, net of actual forfeitures. The service period is the period over which the related service is performed, which is generally the same as the vesting period. Vesting of certain awards may be accelerated for certain officers and employees as a result of attaining certain age and service-based requirements in the Company’s long-term incentive plan and award agreements.

Stock-based compensation expense relating to employee awards is included in compensation and benefits and acquisition-related costs in the condensed consolidated statements of income. The Company recognized stock-based compensation expense related to employee awards of $11.4 million and $9.6 million for the three months ended September 30, 2025 and 2024, respectively, and $35.4 million and $30.9 million for the nine months ended September 30, 2025, and 2024, respectively. Stock-based compensation expense relating to non-employee director awards is included in professional fees and outside services in the condensed consolidated statements of income. The Company recognized stock-based compensation expense related to non-employee director awards of $0.5 million and $0.5 million for the three months ended September 30, 2025 and 2024, respectively, and $1.5 million and $1.2 million for the nine months ended September 30, 2025, and 2024, respectively.

On May 28, 2025 the Company announced that Dave Howson, Executive Vice President and Global President, resigned from the Company, with his employment terminating at the end of the day on August 1, 2025. In connection with his resignation, Mr. Howson was allowed to (i) retain a pro rata portion of certain of his outstanding time-based restricted stock units that would vest in February 2026 based on the number of days worked through and including August 1, 2025 and forfeited the remainder and other outstanding time-based restricted stock units and (ii) retain a pro rata portion of the outstanding performance-based restricted stock units that would vest in February 2026 based on the number of days worked through and including August 1, 2025, which was paid out based on target performance through the end of the applicable performance period for each award, and forfeited the remainder and other outstanding performance-based restricted stock units.

The activity in the Company’s restricted stock, consisting of restricted stock units (“RSUs”), and performance-based restricted stock units (“PSUs”) for the nine months ended September 30, 2025 were as follows:

RSUs

The following table summarizes RSU activity during the nine months ended September 30, 2025:


	Number of Shares	Weighted average grant date fair value
Nonvested stock at December 31, 2024	522,735	$	153.20
Granted	279,207	212.03
Vested	(249,133)	140.62
Forfeited	(57,877)	186.36
Nonvested stock at September 30, 2025	494,932	$	188.84

RSUs entitle the holder to one share of common stock upon vesting, with the exception of certain jurisdictions where the RSUs are settled in cash, typically vest over a three-year period, and vesting accelerates upon death, disability, or the occurrence of a qualified termination following a change in control. Vesting will also accelerate upon a qualified retirement where applicable and permitted. Where applicable and permitted, qualified retirement eligibility generally occurs once achieving 55 years of age and 10 years of service, although service requirements vary. Starting in 2024, the award agreements provide that in the event of a participant’s retirement, all unvested outstanding RSUs and a pro rata portion of unvested outstanding PSUs will continue to vest and be distributed in accordance with the award’s original vesting and settlement schedule, even after the applicable retirement date. Retirement eligibility will require, in addition to attaining the age and service requirements, as applicable, submission of 6 months of advance written notice of a retirement, as applicable, and submission, approval, and satisfactory completion of a transition plan. Unvested RSUs will be forfeited if the officer, or employee leaves the Company prior to the applicable vesting date, except in limited circumstances.

RSUs granted to non-employee members of the Board of Directors have a one-year vesting period and vesting accelerates upon the occurrence of a change in control of the Company. Unvested portions of the RSUs will be forfeited if the director leaves the Board of Directors prior to the applicable vesting date.

The RSUs have no voting rights but entitle the holder to receive dividend equivalents.

During the nine months ended September 30, 2025, to satisfy employees’ tax obligations upon the vesting of restricted stock units, the Company purchased 95,036 shares of common stock totaling $20.5 million as the result of the vesting of 242,003 shares of restricted stock.

PSUs

The following table summarizes restricted stock units contingent upon achievement of performance conditions, also known as PSUs, activity during the nine months ended September 30, 2025:


	Number of Shares	Weighted average grant date fair value
Nonvested stock at December 31, 2024	111,104	$	168.45
Granted	92,533	231.94
Vested	(85,901)	143.95
Forfeited	(22,770)	231.22
Nonvested stock at September 30, 2025	94,966	$	237.43

PSUs include awards related to earnings per share during the performance period as well as awards related to total shareholder return during the performance period. The Company used the Monte Carlo valuation model method to estimate the fair value of the total shareholder return PSUs which incorporated the following assumptions for awards granted in 2025: risk-free interest rate (3.71% to 4.25%), volatility (20.53% to 21.11%) and correlation with S&P 500 Index (-0.08 to 0.19). Each of these performance shares has a performance condition under which the number of units ultimately awarded will vary from 0% to 200% of the original grant, with each unit representing the contingent right to receive one share of the Company’s common stock. The vesting period for the PSUs contingent on the achievement of performance conditions is three years. For each of the performance awards, the PSUs will be settled in shares of the Company’s common stock following vesting of the PSU assuming that the participant has been continuously employed during the vesting period, subject to acceleration upon death, disability, or the occurrence of a qualified termination following a change in control.

Participants have no voting rights with respect to the PSUs until the issuance of the shares of common stock. Dividend equivalents are accrued by the Company and will be paid once the PSUs, contingent on the achievement of performance conditions, vest.

During the nine months ended September 30, 2025, to satisfy employees’ tax obligations upon the vesting of performance stock, the Company purchased 35,067 shares of common stock totaling $7.6 million as a result of the vesting of 85,901 shares of performance stock.

As of September 30, 2025, there were $77.5 million in total unrecognized compensation costs related to restricted stock, restricted stock units, and performance stock units. These costs are expected to be recognized over a weighted average period of 2.0 years.

Employee Stock Purchase Plan

In May 2018, the Company’s stockholders approved an Employee Stock Purchase Plan (“ESPP”), under which a total of 750,000 shares of the Company’s common stock will be made available for purchase to employees. The ESPP is a broad-based plan that permits employees to contribute up to 10% of wages and base salary to purchase shares of the Company’s common stock at a discount, subject to applicable annual Internal Revenue Service (“IRS”) limitations. Under the ESPP, a participant may not purchase more than a maximum of 312 shares of the Company’s common stock during any single offering period. No participant may accrue options to purchase shares of the Company’s common stock at a rate that exceeds $25,000 in fair market value of the Company’s common stock (determined at the time such options are granted) for each calendar year in which such rights are outstanding at any time. The exercise price per share of common stock shall be 85% (for eligible U.S. and international employees) of the lesser of the fair value of the stock on the first day of the applicable offering period or the applicable exercise date.

The Company records stock-based compensation expense over the offering period related to the discount that is given to employees, which totaled $0.6 million and $1.1 million for the three months ended September 30, 2025 and 2024, respectively, and $1.7 million and $2.4 million for the nine months ended September 30, 2025 and 2024, respectively. This expense is included in compensation and benefits in the condensed consolidated statements of income. As of September 30, 2025, 441,140 shares were reserved for future issuance under the ESPP.