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STOCK-BASED COMPENSATION | 9 Months Ended
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Sep. 30, 2023
Share-Based Payment Arrangement [Abstract] |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION Stock-Based Compensation Plans The Company maintains the following plans for which awards were granted from or had awards outstanding in 2023: the 2010 Omnibus Long-Term Incentive Plan (As Amended and Restated Effective July 27, 2017), the 2019 Omnibus Long-Term Incentive Plan, and the 2010 Employee Stock Purchase Plan (collectively referred to as the “Stock Plans”). In February 2023, the Company adopted the Equity Award Death, Disability and Retirement Policy (the “Policy”) as further described in Item 9B of the Company’s 2022 Form 10-K. The terms of the Policy will result in the recognition of expense on an accelerated basis for retirement-eligible participants for restricted stock units only. The Policy was considered a modification to outstanding awards with no impact to fair value. The accelerated stock-based compensation expense recorded as a result of the modification was not material and is being recognized over the period from the date of modification to the date in which each participant becomes retirement-eligible. Stock-Based Compensation Expense The Company records stock-based compensation expense in connection with its restricted stock and restricted stock unit awards, performance share units, stock purchase rights granted under the Company’s employee stock purchase plan and stock options granted to employees, non-employee consultants and non-employee directors. The Company recorded $61.9 million and $49.5 million in stock-based compensation expense during the three months ended September 30, 2023 and 2022, respectively. The Company recorded $172.7 million and $160.9 million in stock-based compensation expense during the nine months ended September 30, 2023 and 2022, respectively. As of September 30, 2023, there was approximately $404.5 million of expected total unrecognized compensation cost related to non-vested stock-based compensation arrangements granted under all equity compensation plans. The Company expects to recognize that cost over a weighted average period of 2.6 years. Stock Options A summary of stock option activity under the Stock Plans is as follows:
|  | Option Shares |  | Weighted Average Exercise Price |  | Weighted Average Remaining Contractual Term (Years) |  | Aggregate Intrinsic Value (1)
(Aggregate intrinsic value in thousands) |  |  |  |  |  |  |  |
Outstanding, January 1, 2023 |  | 1,517,876 |  |  | $ | 44.82 |  |  | 4.7 |  |
Exercised |  | (176,250) |  |  | 16.41 |  |  |  |  |
Forfeited |  | (37,074) |  |  | 95.02 |  |  |  |  |
Outstanding, September 30, 2023 |  | 1,304,552 |  |  | $ | 47.23 |  |  | 4.1 |  | $ | 38,808 |
Vested and expected to vest, September 30, 2023 |  | 1,304,552 |  |  | $ | 47.23 |  |  | 4.1 |  | $ | 38,808 |
Exercisable, September 30, 2023 |  | 1,246,973 |  |  | $ | 44.90 |  |  | 4.0 |  | $ | 38,808 |
______________ (1)The total intrinsic value of options exercised during the nine months ended September 30, 2023 and 2022 was $10.6 million and $34.7 million, respectively, determined as of the date of exercise. The Company received approximately $2.9 million and $6.0 million from stock option exercises during the nine months ended September 30, 2023 and 2022, respectively. Restricted Stock and Restricted Stock Units The fair value of restricted stock and restricted stock units is determined on the date of grant using the closing stock price on that day. A summary of restricted stock and restricted stock unit activity during the nine months ended September 30, 2023 is as follows:
|  | Restricted Shares |  | Weighted Average Grant Date Fair Value (1)
Outstanding, January 1, 2023 |  | 5,254,709 |  |  | $ | 89.29 |
Granted |  | 3,383,127 |  |  | 62.28 |
Released (2) |  | (1,646,982) |  |  | 89.32 |
Forfeited |  | (568,317) |  |  | 74.64 |
Outstanding, September 30, 2023 |  | 6,422,537 |  |  | $ | 73.63 |
______________ (1)The weighted average grant date fair value of the restricted stock units granted during the nine months ended September 30, 2022 was $70.28. (2)The fair value of restricted stock units vested and converted to shares of the Company’s common stock was $146.7 million and $155.5 million during the nine months ended September 30, 2023 and 2022, respectively. Performance Share Units The Company has issued performance-based equity awards to certain employees which vest upon the achievement of certain performance goals, including financial performance targets and operational milestones. In addition, certain of the performance-based equity awards include a market condition. A summary of performance share unit activity is as follows:
|  | Performance Share Units (1) |  | Weighted Average Grant Date Fair Value (2)
Outstanding, January 1, 2023 |  | 967,846 |  |  | $ | 102.58 |
Granted |  | 769,359 |  |  | 79.11 |
Released (3) |  | (12,284) |  |  | 78.32 |
Forfeited |  | (140,727) |  |  | 90.90 |
Outstanding, September 30, 2023 |  | 1,584,194 |  |  | $ | 92.16 |
______________ (1)The performance share units listed above assumes attainment of maximum payout rates as set forth in the performance criteria. Applying actual or expected payout rates, the number of outstanding performance share units as of September 30, 2023 was 790,238. (2)The weighted average grant date fair value of the performance share units granted during the nine months ended September 30, 2022 was $89.43. (3)The fair value of performance share units vested and converted to shares of the Company’s common stock was $1.0 million and $27.2 million for the nine months ended September 30, 2023 and 2022, respectively. Employee Stock Purchase Plan (“ESPP”) The fair value of ESPP shares is based on the assumptions in the following table:
|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
|  | 2023 |  | 2022 |  | 2023 |  | 2022
ESPP Shares |  |  |  |  |  |  |  |
Risk-free interest rates |  | (1) |  | (1) |  | 4.68% |  | 1.49% - 2.73%
Expected term (in years) |  | (1) |  | (1) |  | 1.25 |  | 0.5 - 2
Expected volatility |  | (1) |  | (1) |  | 67.30% |  | 50.94% - 60.34%
Dividend yield |  | (1) |  | (1) |  | —% |  | —%

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