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Share-based Payments | 3 Months Ended
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Nov. 30, 2020
Share-based Payment Arrangement [Abstract] |
Share-based Payments | Share-based PaymentsWe account for share-based payments through the measurement and recognition of compensation expense for share-based payment awards made to employees and directors over the related requisite service period, including stock options, performance share units, and restricted shares (all part of our equity incentive plan), as well as share units representing certain deferrals into our director deferred compensation plan or our supplemental deferred savings plan. The following table presents share-based payment expense for the periods presented (in millions):
| Three Months Ended |  |
| November 30, 2020 |  | November 30, 2019 |  |  |  |
Share-based payment expense | $ | 7.7 |  |  | $ | 16.7 |  |  |  |  |
Further details regarding our stock options, restricted shares, and director compensation award programs as well as our share-based payments are included within the Share-based Payments footnote of the Notes to Consolidated Financial Statements within our Form 10-K. Equity Plan Updates Effective for restricted stock and performance share grants awarded in October 2020 and thereafter, the Board of Directors (the “Board”) discontinued a policy that provided for the continued vesting of stock awards following retirement for all eligible participants who have attained age 60 and have at least ten years of service with the Company. This policy required acceleration of share-based payment expense in certain circumstances. Stock Options As of November 30, 2020, we had approximately 1,192,000 options outstanding to officers and other key employees. The increase from the prior fiscal year end was due to a grant on September 1, 2020 of approximately 277,000 options that have an exercise price equal to or greater than the fair market value of our stock as of the grant date. These options vest and become exercisable over a four-year period and are also subject to a market condition (the "Market Options"). All of these options expire after ten years from the date of grant. The following weighted average assumptions were used to estimate the fair value of the Market Options granted in the first quarter of fiscal 2021:
| Market Options |  |
Valuation Methodology | Monte Carlo Simulation |  |
Dividend yield | 0.5% |  |
Expected volatility | 36.5% |  |
Risk-free interest rate | 0.7% |  |
Expected life of options | 8 years |  |
Weighted-average fair value of options | $40.45 |  |
The dividend yield was calculated based on annual dividends paid and the trailing 12-month average closing stock price at the time of grant. Expected volatility was based on historical volatility of our stock, calculated using the most recent time period equal to the expected life of the options. The risk-free interest rate was based on the U.S. Treasury yield for a term equal to the contractual term for the Market Options. The expected life of the options is based on projected exercise dates resulting from the Monte Carlo simulation for each award tranche. All inputs noted above are estimates made at the time of grant. Actual realized value of each option grant could materially differ from these estimates, without impact to future reported share-based payment expense. Stock option activity during the periods presented was as follows:
| Outstanding |  | Exercisable
| Number of Shares (in millions) |  | Weighted Average Exercise Price |  | Number of Shares (in millions) |  | Weighted Average Exercise Price
Outstanding at August 31, 2020 | 0.9 |  | $133.19 |  | 0.4 |  | $151.07
Granted | 0.3 |  | $108.96 |  |  |  |
Canceled | — | * | — |  |  |  |
Outstanding at November 30, 2020 | 1.2 |  | $127.56 |  | 0.4 |  | $148.90
Range of option exercise prices: |  |  |  |  |  |  |
$40.01 - $100.00 (average life - 1.9 years) | 0.1 |  | $62.25 |  | 0.1 |  | $62.25
$100.01 - $160.00 (average life - 8.6 years) | 1.0 |  | $119.11 |  | 0.2 |  | $126.85
$160.01 - $210.00 (average life - 4.9 years) | 0.1 |  | $207.80 |  | 0.1 |  | $207.80
$210.01 - $239.76 (average life - 5.9 years) | — | * | $239.76 |  | — | * | $239.76
___________________________ * Represents shares of less than 0.1 million. No options were exercised during the three months ended November 30, 2020 or 2019. As of November 30, 2020, the total intrinsic value of options outstanding was $7.5 million, the total intrinsic value of options expected to vest was $2.9 million, and the total intrinsic value of options exercisable was $4.5 million. As of November 30, 2020, there was $23.6 million of total unrecognized compensation cost related to unvested options. That cost is expected to be recognized over a weighted-average period of approximately 2.5 years.

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