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STOCK COMPENSATION PLANS | 12 Months Ended
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Dec. 31, 2024
Share-Based Payment Arrangement [Abstract] |
STOCK COMPENSATION PLANS | STOCK COMPENSATION PLANS Stock Incentive Plans In 2016, the shareholders approved the Labcorp Holdings Inc. 2016 Omnibus Incentive Plan (the Plan). Under the Plan, at December 31, 2024, there are 9.0 shares authorized for issuance and 2.8 shares available for grant. Stock Options The following table summarizes grants of non-qualified options made by the Company to officers, key employees, and non-employee directors under all plans. Stock options are typically granted at an exercise price equal to or greater than the fair market price per share on the date of grant, vest ratably over a period of three years on the anniversaries of the grant date, and have a contractual exercise period of 10 years subject to their earlier expiration or termination. Changes in options outstanding were as follows:
| Number of Options |  | Weighted-Average Exercise Price per Option |  | Weighted-Average Remaining Contractual Term (in Years) |  | Aggregate Intrinsic Value
Outstanding at December 31, 2023 | 0.6 |  |  | $ | 174.45 |  |  |  |  |
Granted | 0.1 |  |  | $ | 223.94 |  |  |  |  |
Exercised | (0.1) |  |  | $ | 182.68 |  |  |  |  |
Canceled | — |  |  | $ | 230.58 |  |  |  |  |
Outstanding at December 31, 2024 | 0.6 |  |  | $ | 180.29 |  |  | 5.6 |  | $ | 32.1 |
Exercisable at December 31, 2024 | 0.5 |  |  | $ | 165.99 |  |  | 4.7 |  | $ | 31.2 |
Cash received by the Company from option exercises, the actual tax benefit realized for the tax deductions and the aggregate intrinsic value of options exercised from option exercises under all share-based payment arrangements were as follows:
| Year Ended December 31,
| 2024 |  | 2023 |  | 2022
Cash received by the Company | $ | 6.5 |  |  | $ | 2.9 |  |  | $ | 7.1 |
Tax benefits realized | $ | 1.6 |  |  | $ | 0.7 |  |  | $ | 1.8 |
Aggregate intrinsic value | $ | 1.6 |  |  | $ | 0.7 |  |  | $ | 8.2 |
The following table shows the weighted-average grant-date fair values of options issued during the respective year and the weighted-average assumptions that the Company used to develop the fair value estimates:
| Year Ended December 31,
| 2024 |  | 2023 |  | 2022
Fair value per option | $ | 73.08 |  |  | $ | 72.27 |  |  | $ | 68.35 |
Weighted-average expected life (in years) | 6.0 |  | 6.0 |  | 6.0
Risk free interest rate | 4.1 | % |  | 3.4 | % |  | 2.0 | %
Expected volatility | 30.0 | % |  | 29.8 | % |  | 28.6 | %
Expected dividend yield | 1.3 | % |  | 1.4 | % |  | 0.9 | %
The Black-Scholes model incorporates assumptions to value stock-based awards. The risk-free interest rate for periods within the contractual life of the option is based on a zero-coupon U.S. government instrument over the contractual term of the equity instrument. Expected volatility of the Company’s stock is based on historical volatility of the Company’s stock. The Company estimates expected option terms through an analysis of actual, historical post-vesting exercise, cancellation and expiration behavior by employees and projected post-vesting activity of outstanding options. Groups of employees and non-employee directors that have similar exercise behavior with regard to option exercise timing and forfeiture rates are considered separately for valuation purposes. For 2024, 2023 and 2022, expense related to the Company’s stock option plan totaled $5.2, $3.8, and $4.3, respectively, and is included in Selling, general and administrative expenses in the Consolidated Statements of Operations. Restricted Stock, Restricted Stock Units and Performance Shares The Company grants restricted stock, restricted stock units, and performance shares (non-vested shares) to officers and key employees and grants restricted stock and restricted stock units to non-employee directors. Restricted stock and units typically vest annually in equal one-third increments beginning on the first anniversary of the grant. A performance share grant in 2022 represents a three-year award opportunity for the period 2022-2024, and if earned, vests fully (to the extent earned) in the first quarter of 2025. A performance share grant in 2023 represents a three-year award opportunity for the period of 2023-2025 and, if earned, vests fully (to the extent earned) in the first quarter of 2026. A performance share grant in 2024 represents a three-year award opportunity for the period of 2024-2026 and, if earned, vests fully (to the extent earned) in the first quarter of 2027. Performance share awards are subject to certain earnings per share, revenue, and total shareholder return targets, the achievement of which may increase or decrease the number of shares which the grantee earns and therefore receives upon vesting. Unearned restricted stock and performance share compensation is amortized to expense, when probable, over the applicable vesting periods. For 2024, 2023, and 2022, total restricted stock, restricted stock unit, and performance share compensation expense was $96.6, $111.1, and $97.7, respectively. The following table shows a summary of non-vested shares for the year ended December 31, 2024:
| Number of Shares |  | Weighted-Average Grant Date Fair Value
Beginning balance | 1.0 |  |  | $ | 248.41 |
Granted | 0.5 |  |  | $ | 224.23 |
Vested | (0.5) |  |  | $ | 264.80 |
Canceled | (0.1) |  |  | $ | 222.52 |
Ending balance | 0.9 |  |  | $ | 226.44 |
Unrecognized Compensation Cost At December 31, 2024, there was $100.6 of total unrecognized compensation cost related to non-vested stock options, restricted stock, restricted stock unit and performance share-based compensation arrangements granted under the Company’s stock incentive plans. That cost is expected to be recognized over a weighted-average period of 1.7 years and will be included in Cost of revenues and Selling, general and administrative expenses in the Consolidated Statements of Operations. Employee Stock Purchase Plan Under the 2016 Employee Stock Purchase Plan, the Company is authorized to issue 1.8 shares of Common Stock. The plan permits substantially all U.S., Canada, and United Kingdom employees to purchase a limited number of shares of Company stock at 85% of market value. The Company issues Common Stock to participating employees semi-annually in January and July of each year, although due to the spin-off of Fortrea shares for the first offering period were issued in May of 2023. Approximately 0.3, 0.3, and 0.2 shares were purchased by eligible employees in 2024, 2023, and 2022, respectively. For 2024, 2023, and 2022, expense related to the Company’s employee stock purchase plan was $14.9, $13.8, and $14.8, respectively. The Company uses the Black-Scholes model to calculate the fair value of the employee’s purchase right. The fair value of the employee’s purchase right and the assumptions used in its calculation are as follows:
| Year Ended December 31,
| 2024 |  | 2023 |  | 2022
Fair value of the employee’s purchase right | $ | 47.56 |  |  | $ | 49.19 |  |  | $ | 62.50 |
Valuation assumptions |  |  |  |  |
Risk free interest rate | 5.0 | % |  | 5.0 | % |  | 1.3 | %
Expected volatility | 27.9 | % |  | 30.0 | % |  | 30.0 | %
Expected dividend yield | 1.3 | % |  | 1.4 | % |  | 0.9 | %

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