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Stock-Based Compensation | 12 Months Ended
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Dec. 31, 2017
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] |
Stock-Based Compensation | —Stock‑Based Compensation Incentive Compensation Program The Company maintains an Incentive Compensation Program (the “Program”) for executives, certain other employees of the Company and its operating segments and subsidiaries and the Company’s non-employee directors. Members of the Board of Directors that receive stock-based compensation are treated as employees for accounting purposes. The Program was approved by shareholders on May 6, 2015. The Program allows for up to 4.2 million awards to eligible employees of stock options, restricted stock, stock appreciation rights, performance shares and units or other awards based on Company common stock. As of December 31, 2017, 3.3 million were available for grant under this plan. During the year ended December 31, 2017, the Company awarded 364,675 stock options, 91,098 restricted stock awards, 47,285 performance share awards and 13,399 restricted stock units with an aggregate grant-date fair value of approximately $26.8 million to be expensed over the requisite service period for each award. Stock-based compensation expense, which is included in selling and administrative expenses in the Consolidated Statement of Earnings, for the years ended December 31 follows:
(in millions) |  | 2017 |  | 2016 |  | 2015
Stock option awards |  | $ | 7.7 |  |  | $ | 6.1 |  |  | $ | 5.1 |
Restricted stock awards |  | 6.0 |  |  | 4.5 |  |  | 5.9 |
Performance share awards |  | 5.6 |  |  | 4.7 |  |  | 6.3 |
Restricted stock units |  | 1.4 |  |  | 1.2 |  |  | 1.1 |
Total stock-based compensation expense |  | $ | 20.7 |  |  | $ | 16.5 |  |  | $ | 18.4 |
The Company recognized an income tax benefit of $12.5 million related to total stock-based compensation expense for the year ended December 31, 2017. Stock Option Awards Options issued under the Program generally vest on a straight-line basis over a three year period on the anniversary date of the grant. All options have a maximum term life of 10 years. Shares issued to cover options under the Program may be issued from shares held in treasury, from new issuances of shares or a combination of the two. Unrecognized compensation cost related to stock options of $5.1 million as of December 31, 2017, is to be recognized over a weighted-average period of 1.87 years. The Company utilizes the Black‑Scholes-Merton (“BSM”) option pricing model to determine the fair value of its stock option awards. The BSM relies on certain assumptions to estimate an option’s fair value. The weighted average assumptions used in the determination of fair value for stock option awards for the years ended December 31 follows:
(in millions, except per share amounts) |  | 2017 |  | 2016 |  | 2015
Expected dividend yield |  | 1.3 | % |  | 1.4 | % |  | 1.1 | %
Expected life (in years) |  | 5.58 |  |  | 5.61 |  |  | 5.71 |
Expected volatility |  | 25.6 | % |  | 27.5 | % |  | 27.3 | %
Risk-free interest rate |  | 1.9 | % |  | 1.4 | % |  | 1.4 | %
Weighted-average grant date fair value (per share) |  | $ | 24.57 |  |  | $ | 19.30 |  |  | $ | 21.19 |
Fair value of options granted |  | $ | 8.8 |  |  | $ | 7.2 |  |  | $ | 6.7 |
Intrinsic value of options exercised |  | $ | 8.5 |  |  | $ | 56.4 |  |  | $ | 42.7 |
Fair value of options vested |  | $ | 5.4 |  |  | $ | 4.7 |  |  | $ | 4.6 |
The expected life of options is based on the assumption that all outstanding options will be exercised at the midpoint of the valuation date (if vested) or the vesting dates (if unvested) and the options’ expiration date. The expected volatility is based on historical volatility as well as implied volatility of the Company’s options. The risk-free interest rate is based on rates of U.S. Treasury issues with a remaining life equal to the expected life of the option. The expected dividend yield is based on the projected annual dividend payment per share, divided by the stock price at the date of grant. A summary of stock options outstanding and activity during the year ended December 31, 2017, follows:
|  | Number of Shares |  | Weighted-Average Exercise Price |  | Weighted-Average Contractual Term |  | Aggregate Intrinsic Value (in millions)
Outstanding as of December 31, 2016 |  | 1,263,665 |  |  | $ | 70.95 |  |  |  |  |
Options granted |  | 364,675 |  |  | 107.63 |  |  |  |  |
Options exercised |  | (165,959 | ) |  | 56.61 |  |  |  |  |
Options forfeited / expired |  | (31,069 | ) |  | 92.49 |  |  |  |  |
Outstanding as of December 31, 2017 |  | 1,431,312 |  |  | 81.49 |  |  | 6.8 |  | $ | 46.2 |
Vested and exercisable as of December 31, 2017 |  | 732,408 |  |  | 66.24 |  |  | 5.2 |  | $ | 34.7 |
Restricted Stock Awards Restricted stock awarded under the Program is generally released to the recipient after a period of approximately three years. Unrecognized compensation cost related to restricted stock awards of $9.0 million as of December 31, 2017, is to be recognized over a weighted-average period of 2.1 years. The fair value of shares vested during the year ended December 31, 2017, was $11.4 million. Information related to restricted stock awards during the years ended December 31 follows:
(in millions, except per share amounts) |  | 2017 |  | 2016 |  | 2015
Weighted-average grant date fair value (per share) |  | $ | 106.78 |  |  | $ | 84.73 |  |  | $ | 90.54 |
A summary of restricted stock awards outstanding and activity during the year ended December 31, 2017, follows:
|  | Number of Shares |  | Weighted-Average Grant Date Fair Value
Outstanding as of December 31, 2016 |  | 225,265 |  |  | $ | 82.59 |
Shares granted |  | 91,098 |  |  | 106.78 |
Shares vested |  | (105,282 | ) |  | 77.41 |
Shares forfeited |  | (2,760 | ) |  | 94.21 |
Outstanding as of December 31, 2017 |  | 208,321 |  |  | 95.63 |
Performance Share Awards Performance shares vest based on the employee rendering three years of service to the Company and the attainment of a market condition over the performance period, which is based on the Company’s relative total shareholder return versus the S&P Midcap 400 Index® over a pre-determined time period as determined by the Compensation Committee of the Board of Directors. Unrecognized compensation cost related to performance share awards of $6.7 million as of December 31, 2017, is to be recognized over a weighted-average period of 1.66 years. The fair value of shares vested during the year ended December 31, 2017, was $11.6 million. For purposes of determining diluted earnings per share, the performance share awards are considered contingently issuable shares and are included in diluted earnings per share based upon the number of shares that would have been awarded had the conditions at the end of the reporting period continued until the end of the performance period. See Note 7 for further information regarding earnings per share computations. The Company utilizes the Monte-Carlo simulation approach based on a three year measurement period to determine the fair value of performance shares. Such approach entails the use of assumptions regarding the future performance of the Company’s stock and those of the S&P Midcap 400 Index®. Those assumptions include expected volatility, risk‑free interest rates, correlation coefficients and dividend reinvestment. Dividends accrue on the performance shares during the performance period and are to be paid in cash based upon the number of awards ultimately earned. Information related to performance shares during the years ended December 31 follows:
(in millions, except per share amounts) |  | 2017 |  | 2016 |  | 2015
Weighted-average grant date fair value (per share) |  | $ | 141.83 |  |  | $ | 119.08 |  |  | $ | 112.39 |
A summary of performance shares outstanding and activity during the year ended December 31, 2017, follows:
|  | Number of Shares |  | Weighted-Average Grant Date Fair Value
Outstanding as of December 31, 2016 |  | 219,559 |  |  |
Units granted |  | 47,285 |  |  | $ | 141.83 |
Units converted (withheld) |  | (8,786 | ) |  | 112.39 |
Units vested and issued |  | (86,619 | ) |  | 95.72 |
Units vested and deferred |  | (17,413 | ) |  | 95.72 |
Units forfeited |  | (2,760 | ) |  | 126.66 |
Outstanding as of December 31, 2017 |  | 151,266 |  |  | 123.99 |
Restricted Stock Units Restricted stock units are awarded to eligible directors and fully vested and are expensed upon grant date. The restricted stock units are paid in shares of Company common stock after the director ceases to serve as a member of the Board, or if earlier, upon a change in control of the Company. The Company granted 13,399, 14,359 and 12,157 units in 2017, 2016 and 2015, respectively. Units had a weighted-average grant date fair value per share of $107.87, $83.31 and $90.54 in 2017, 2016 and 2015, respectively. Restricted stock units fair value is based on the closing market price of the stock on the respective dates of the grants. Deferred Compensation - Equity Certain employees are eligible to participate in the Company’s Non-qualified Deferred Compensation Plan (the “Deferred Compensation Plan”). Participants may elect to defer all or part of their restricted and performance shares. Participants have elected to defer 280,982 and 294,574 shares of Company common stock as of December 31, 2017 and 2016, respectively. Company stock held for future issuance of vested awards is classified as deferred compensation equity in the Consolidated Balance Sheets and is recorded at grant date fair value. Such deferred shares are included in basic earnings per share.

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- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -URI http://asc.fasb.org/subtopic&trid=2208855 + Details
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