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Stock Based Compensation Plans | 3 Months Ended
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Mar. 31, 2024
Share-Based Payment Arrangement [Abstract] |
Stock Based Compensation Plans | 6. Stock Based Compensation Plans In the first quarter of 2023, the Company updated its Long-Term Incentive Program (“LTIP”) to provide employees with an award of stock options and initial grants of restricted stock units (“RSUs”), and made an initial grant of performance share units ("PSUs") to members of the Company's Executive Leadership Team ("ELT"). In connection with this update, the awards are now granted in the first quarter of each year. Prior to 2023, the awards were granted in the second quarter. The Company recognizes the grant-date fair value for each of these awards, less estimated forfeitures, as compensation expense ratably over the vesting period. For employees and directors that meet retirement eligibility requirements, the expense related to share-based compensation is recognized on the date of grant as there is no future service period required for the awards to vest. Stock Options The following table provides a summary of option activity:
|  |  |  |  |  |  | Weighted |  |  |  |
|  |  |  |  |  |  | Average |  |  |  |
|  |  |  | Weighted |  |  | Remaining |  |  |  |
|  |  |  | Average |  |  | Contractual |  |  | Aggregate |
|  |  |  | Exercise |  |  | Term |  |  | Intrinsic |
| Options |  |  | Price |  |  | (in Years) |  |  | Value |
Outstanding at December 31, 2023 |  | 10.2 |  |  | $ | 68.77 |  |  |  |  |  |  |
Granted |  | 1.0 |  |  |  | 100.28 |  |  |  |  |  |  |
Exercised |  | (1.4 | ) |  |  | 47.37 |  |  |  |  |  |  |
Outstanding at March 31, 2024 |  | 9.8 |  |  | $ | 74.61 |  |  |  | 6.4 |  |  | $ | 296.3 |
Exercisable at March 31, 2024 |  | 5.2 |  |  | $ | 62.32 |  |  |  | 4.5 |  |  | $ | 217.3 |
The following table provides information regarding the intrinsic value of stock options exercised and stock compensation expense related to stock option awards:
| Three Months Ended |
| March 31, |  |  | March 31, |
| 2024 |  |  | 2023 |
Intrinsic Value of Stock Options Exercised | $ | 68.8 |  |  | $ | 10.7 |
Stock Compensation Expense Related to Stock Option Awards | $ | 16.5 |  |  | $ | 14.5 |
Issued Stock Options |  | 1.0 |  |  |  | 1.0 |
Weighted Average Fair Value of Stock Options issued (per share) | $ | 29.81 |  |  | $ | 23.93 |
Fair Value of Stock Options Issued | $ | 30.1 |  |  | $ | 23.7 |
| Three Months Ended |
| March 31, |  |  | March 31, |
| 2024 |  |  | 2023 |
Risk-free interest rate |  | 4.2 | % |  |  | 4.0 | %
Expected life in years |  | 7.2 |  |  |  | 7.3 |
Expected volatility |  | 22.3 | % |  |  | 12.3 | %
Dividend yield |  | 1.1 | % |  |  | 1.3 | %
Restricted Stock Units The Company granted employees 76,090 RSUs with a total fair value of $7.6 at a weighted average grant date fair value of $100.28 per RSU during the first quarter of 2024 and granted employees 88,480 RSUs with a total fair value of $7.4 at a weighted average grant date fair value of $83.13 per RSU during the first quarter of 2023. The annual RSU grants vest one-third on each of the first, second and third anniversaries of the grant date, subject to the recipient’s continued employment with the Company from the grant date through the applicable vesting date, and are settled with shares of the Company’s Common Stock within 60 days following the applicable vesting date. Additionally, in connection with the Hero Acquisition (see Note 10), 854,882 shares of restricted stock were issued in October 2022 with a total fair value of $61.5. The restricted stock will be recognized as compensation expense as the stock is subject to vesting requirements for individuals who received the restricted stock and will continue to be employed by the Company. The vesting requirements are satisfied at various dates over a three-year period from the date of the acquisition, with 213,719 vesting in April of 2024. The restricted stock expense associated with the Hero Acquisition for the three months ended March 31, 2024 and 2023 was $7.3 in both periods, and is included in the non-cash compensation expense caption in the consolidated statement of cash flows. Performance Stock Units In the first quarter of 2024 and 2023, respectively, the Company granted PSUs to members of the Executive Leadership Team including the CEO, with an aggregate award equal to 19,960 and 19,650 PSUs. The PSUs were valued at a weighted average grant date fair value equal to $122.24 in 2024 and $110.95 in 2023 per PSU using a Monte Carlo model. The performance target is based on the Company's total shareholder return ("TSR") relative to a Company selected peer group. The PSUs vest on the later of (i) the third anniversary of the grant date, and (ii) the date that the Board's Compensation & Human Capital Committee certifies the achievement of the applicable performance goals, in each case, subject to the recipient’s continued employment with the Company from the grant date through the vesting date. The number of shares that may be issued ranges from 0% to 200% based on relative TSR during the three-year performance period.

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