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Equity Incentive Plan | 12 Months Ended
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Dec. 31, 2024
Share-Based Payment Arrangement [Abstract] |
Equity Incentive Disclosure | EQUITY INCENTIVE PLAN The Company’s equity incentive plan provides employees and directors of the Company additional incentives to join and/or remain in the service of the Company as well as to maintain and enhance the long-term performance and profitability of the Company. The Company’s 2013 Equity Incentive Plan was approved by shareholders on May 2, 2013 and provides that 2 million shares of common stock, plus any shares that remained available for grant under the Company’s prior equity incentive plan as well as options outstanding that terminate without being exercised, may be the subject of awards. The plan provides for the grant of options, restricted stock units, and other equity-based awards. The exercise price of options granted shall not be less than the fair market value of the common stock on the date of the award. Options primarily vest equally over a five-year period from the date of grant and have a maximum term of up to 10 years. Restricted units primarily vest equally over a five-year period from the date of grant. Performance share units generally vest after a three-year period from the date of the grant based upon satisfaction of the performance condition. The compensation committee of the Board of Directors has generally granted restricted share units to participating managers and non-qualified stock options and performance share units to executive officers. On May 6, 2021, the Company's shareholders approved the adoption of the Company's 2013 Equity Incentive Plan (Amended and Restated), with the effect that approximately 0.9 million additional shares of common stock were added to the 2.1 million shares that remained available under the plan prior to its amendment. In addition, shares subject to options granted under the Company's prior equity incentive plan that terminate or are forfeited without being exercised are also available for awards under the amended plan. The amended plan expires in 2031. All share-based compensation arrangements granted to employees, including stock option grants, are recognized in the consolidated statement of operations based on the grant-date fair value of the award over the period during which an employee is required to provide service in exchange for the award. Share-based compensation expense is recorded within selling, general, and administrative in the consolidated statement of operations with a corresponding offset to additional paid-in capital in the consolidated balance sheet. The fair values of stock options granted were calculated using the Black-Scholes pricing model. The aggregate intrinsic value of an option is the amount by which the fair value of the underlying stock exceeds its exercise price. The following table summarizes all stock option activity from December 31, 2023 through December 31, 2024:
| Number of Options |  | Weighted Average Exercise Price |  | Aggregate Intrinsic Value (in millions)
Outstanding at December 31, 2023 | 259,958 |  |  | $ | 743.30 |  |  | $ | 127.2 |
Granted | 17,170 |  |  | 1,260.97 |  |  |
Exercised | (59,443) |  |  | 382.69 |  |  |
Forfeited | (372) |  |  | 1,225.87 |  |  |
Expired | (36) |  |  | 1,484.40 |  |  |
Outstanding at December 31, 2024 | 217,277 |  |  | $ | 881.92 |  |  | $ | 79.6 |
Options exercisable at December 31, 2024 | 156,503 |  |  | $ | 765.33 |  |  | $ | 74.7 |
The following table details the weighted average remaining contractual life of options outstanding at December 31, 2024 by range of exercise prices:
Number of Options Outstanding |  | Weighted Average Exercise Price |  | Remaining Contractual Life of Options Outstanding |  | Options Exercisable
85,762 |  |  | $ | 556.79 |  |  | 2.85 |  | 85,762 |
53,015 |  |  | $ | 903.76 |  |  | 5.34 |  | 47,021 |
78,500 |  |  | $ | 1,222.38 |  |  | 8.41 |  | 23,720 |
217,277 |  |  |  |  | 5.46 |  | 156,503 |
As of the date granted, the weighted average grant-date fair value of the options granted during the years ended December 31, 2024, 2023, and 2022 was $494.81, $400.30, and $447.52, respectively. Such weighted average grant-date fair value was determined using the following assumptions:
| 2024 |  | 2023 |  | 2022
Risk-free interest rate | 4.31 | % |  | 4.64 | % |  | 4.35 | %
Expected life in years | 6.8 |  | 6.7 |  | 6.4
Expected volatility | 28 | % |  | 27 | % |  | 26 | %
Expected dividend yield | — |  |  | — |  |  | — |
The total intrinsic value of options exercised during the years ended December 31, 2024, 2023, and 2022 was approximately $62.9 million, $68.7 million, and $121.3 million, respectively. In November 2023, the Company also granted 7,137 performance options with a grant-date fair value of $2.9 million upon achievement of the performance target. The performance target is based on the Company’s cumulative average local currency sales growth rate over the four-year period ending December 31, 2027. If the performance target is met, the performance options cliff vest at the conclusion of the four-year period and will settle based upon actual performance ranging from zero to 150% of the target. Compensation expense is recognized over the four-year period based on the estimated actual performance relative to the target. The compensation expense for options recognized during the years ended December 31, 2024, 2023, and 2022 was $8.4 million, $6.0 million, and $7.8 million, respectively. The following table summarizes all restricted stock unit and performance share unit activity from December 31, 2023 through December 31, 2024:
| Number of Restricted Stock Units |  | Aggregate Intrinsic Value (in millions) |  | Number of Performance Share Units |  | Aggregate Intrinsic Value (in millions)
Outstanding at December 31, 2023 | 26,739 |  |  | $32.4 |  | 10,411 |  |  | $12.6
Granted | 9,649 |  |  |  |  | 3,149 |  |  |
Adjustment for performance results achieved(1) | — |  |  |  |  | (3,047) |  |  |
Vested | (8,889) |  |  |  |  | (98) |  |  |
Forfeited | (2,071) |  |  |  |  | — |  |  |
Outstanding at December 31, 2024 | 25,428 |  |  | $31.1 |  | 10,415 |  |  | $12.7
(1) 2020 performance share units vested in the first quarter 2024. The weighted average grant-date fair value of the restricted stock units granted during the years ended 2024, 2023, and 2022 was $1,260.96, $1,029.48, and $1,230.18 per unit, respectively, which primarily vest ratably over a five-year period. The total fair value of the restricted stock units on the date of grant was $12.2 million for 2024, $12.8 million for 2023, and $10.8 million for 2022 and will be recorded as compensation expense on a straight-line basis over the vesting period. The total fair value of restricted stock units vested during the years ended December 31, 2024, 2023, and 2022 was approximately $8.7 million, $8.6 million, and $8.2 million, respectively. Approximately $8.3 million, $8.8 million, and $7.9 million of compensation expense was recognized during the years ended December 31, 2024, 2023, and 2022, respectively. The Company granted performance share units with a market condition during 2024, 2023, and 2022. Grantees of performance share units will be eligible to receive shares of the Company’s common stock depending upon the Company’s total shareholder return relative to the performance of companies in the S&P 500 Health Care and S&P 500 Industrials over a three-year period. The awards actually earned will range from zero to 200% of the targeted number of performance share units for the three-year performance period and will be paid, to the extent earned, in the fiscal quarter following the end of the applicable three-year performance period. During 2024, the market conditions for the 2021 performance share units were not met. Accordingly, in January 2025, nothing vested and there was no payout. Performance share unit awards were valued using a Monte Carlo simulation based on the following assumptions:
| 2024 |  | 2023 |  | 2022
Risk-free interest rate | 4.24 | % |  | 4.71 | % |  | 4.58 | %
Expected life in years | 3 |  | 3 |  | 3
Expected volatility | 28 | % |  | 27 | % |  | 26 | %
Expected dividend yield | — |  |  | — |  |  | — |
As of the date granted, the fair value of the performance share units granted was $1,153.99 for 2024, $1,103.23 for 2023, and $1,357.26 for 2022. The total fair value of the performance share units on the date of the grant was $3.6 million, $3.3 million, and $3.2 million for 2024, 2023, and 2022, respectively, and will be recorded as compensation expense on a straight-line basis over the three-year performance period. The compensation expense for performance share units recognized during the years ended December 31, 2024, 2023, and 2022 was $3.3 million, $3.1 million, and $4.0 million, respectively. At December 31, 2024, a total of 2,841,580 shares of common stock were available for grant in the form of stock options, restricted stock units, or performance share units. As of December 31, 2024, the unrecorded deferred share-based compensation balance related to stock options, restricted stock units, and performance share units was $35.7 million and will be recognized using a straight-line method over an estimated weighted average amortization period of 2.0 years.

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