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Stock-based Compensation | 6 Months Ended
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May 31, 2024
Share-Based Payment Arrangement [Abstract] |
Stock-Based Compensation | STOCK-BASED COMPENSATION We have four types of stock-based compensation awards: restricted stock units (RSUs), stock options, company stock awarded as part of our long-term performance plan (LTPP) and price-vested stock options. The following table sets forth the stock-based compensation expense recorded in selling, general and administrative (SG&A) expense (in millions):
| Three months ended May 31, |  | Six months ended May 31,
| 2024 |  | 2023 |  | 2024 |  | 2023
Stock-based compensation expense | $ | 19.4 |  |  | $ | 26.7 |  |  | $ | 31.1 |  |  | $ | 38.5 |
Our 2024 annual grant of stock options and RSUs occurred in the second quarter, similar to the 2023 annual grant. Additionally, during the first quarter, approximately 380,000 stock option shares were granted. The weighted-average grant-date fair value of each stock option granted in 2024 was $17.63 and in 2023 was $19.35, each as calculated under a lattice pricing model. Substantially all of the stock options and RSUs granted in 2024 and 2023 vest ratably over a three-year period or, if earlier, upon the retirement eligibility date of the holder. The fair values of stock option grants in the stated periods were computed using the following assumptions for our various stock compensation plans:
| 2024 |  | 2023
Risk-free interest rates | 4.1% - 5.5% |  | 3.5% - 4.9%
Dividend yield | 2.3% |  | 1.9%
Expected volatility | 22.8% |  | 21.8%
Expected lives (in years) | 7.1 |  | 7.3
The following is a summary of our stock option activity for the six months ended May 31, 2024 and 2023:
| 2024 |  | 2023
(shares in millions) | Number of Shares |  | Weighted- Average Exercise Price |  | Number of Shares |  | Weighted- Average Exercise Price
Outstanding at beginning of period | 5.3 |  |  | $ | 70.43 |  |  | 4.8 |  |  | $ | 67.08 |
Granted | 1.2 |  |  | 72.88 |  |  | 0.9 |  |  | 81.79 |
Exercised | (0.2) |  |  | 39.60 |  |  | (0.2) |  |  | 46.90 |
Forfeited | (0.1) |  |  | 84.84 |  |  | — |  |  | — |
Outstanding at end of the period | 6.2 |  |  | $ | 71.94 |  |  | 5.5 |  |  | $ | 70.12 |
Exercisable at end of the period | 4.5 |  |  | $ | 69.43 |  |  | 4.0 |  |  | $ | 63.77 |
As of May 31, 2024, the intrinsic value (the difference between the exercise price and the market price) for all options outstanding was $43.0 million and for options currently exercisable was $41.4 million. The total intrinsic value of all options exercised during the six months ended May 31, 2024 and 2023 was $7.4 million and $7.4 million, respectively. The following is a summary of our RSU activity for the six months ended May 31, 2024 and 2023:
| 2024 |  | 2023
(shares in thousands) | Number of Shares |  | Weighted- Average Grant-Date Fair Value |  | Number of Shares |  | Weighted- Average Grant-Date Fair Value
Outstanding at beginning of period | 494 |  |  | $ | 76.94 |  |  | 480 |  |  | $ | 77.62 |
Granted | 262 |  |  | 72.90 |  |  | 243 |  |  | 78.29 |
Vested | (192) |  |  | 84.69 |  |  | (222) |  |  | 78.12 |
Forfeited | (15) |  |  | 82.26 |  |  | (13) |  |  | 86.69 |
Outstanding at end of period | 549 |  |  | $ | 72.15 |  |  | 488 |  |  | $ | 77.51 |
The following is a summary of our price-vested stock options activity for the six months ended May 31, 2024 and 2023:
| 2024 |  | 2023
(shares in thousands) | Number of Shares |  | Weighted- Average Grant-Date Fair Value |  | Number of Shares |  | Weighted- Average Grant-Date Fair Value
Outstanding at beginning of period | 2,055 |  |  | $ | 9.40 |  |  | 2,107 |  |  | $ | 9.40 |
Forfeited | — |  |  | — |  |  | (50) |  |  | 9.40 |
Outstanding at end of period | 2,055 |  |  | $ | 9.40 |  |  | 2,057 |  |  | $ | 9.40 |
The following is a summary of our LTPP activity for the six months ended May 31, 2024 and 2023:
| 2024 |  | 2023
(shares in thousands) | Number of Shares |  | Weighted- Average Grant-Date Fair Value |  | Number of Shares |  | Weighted- Average Grant-Date Fair Value
Outstanding at beginning of period | 474 |  |  | $ | 94.34 |  |  | 451 |  |  | $ | 106.32 |
Granted | 192 |  |  | 66.49 |  |  | 167 |  |  | 89.00 |
Vested | (181) |  |  | 98.30 |  |  | (176) |  |  | 86.14 |
Forfeited | (12) |  |  | 83.08 |  |  | (16) |  |  | 93.53 |
Outstanding at end of period | 473 |  |  | $ | 81.55 |  |  | 426 |  |  | $ | 93.67 |

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