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Stock-Based Compensation | 12 Months Ended
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Dec. 31, 2024
Share-Based Payment Arrangement [Abstract] |
Stock-Based Compensation | STOCK-BASED COMPENSATION The AutoNation, Inc. 2017 Employee Equity and Incentive Plan (the “2017 Plan”) provides for the grant of RSUs, restricted stock, stock options, stock appreciation rights, and other stock-based and cash-based awards to employees. A maximum of 5.5 million shares may be issued under the 2017 Plan. The AutoNation, Inc. 2014 Non-Employee Director Equity Plan (the “2014 Director Plan”) provided for the grant of stock options, restricted stock, RSUs, stock appreciation rights, and other stock-based awards to our non-employee directors. On February 21, 2024, our Board of Directors, upon the recommendation of its Compensation Committee, approved the AutoNation, Inc. 2024 Non-Employee Director Equity Plan (the “2024 Director Plan”), which was approved by our stockholders at our Annual meeting of Stockholders held on April 24, 2024. The 2024 Director Plan replaced the 2014 Director Plan, which terminated on May 6, 2024. As of December 31, 2024, the maximum number of shares authorized for issuance under the 2024 Director Plan was 400,000. Restricted Stock Units On January 2, 2024, each of our non-employee directors received a grant of 1,659 RSUs un der the 2014 Director Plan. RSUs granted to our non-employee directors are fully vested on the grant date and are settled in shares of the Company’s common stock on the first trading day of February in the third year following the grant date, unless the non-employee director elects to defer delivery in accordance with the terms of the award and the 2014 Director Plan. Settlement of the RSUs will be accelerated in certain circumstances as provided in the terms of the award and the 2014 Director Plan, including in the event the non-employee director ceases to serve as a non-employee director of the Company. Compensation cost is recognized on the grant date and is based on the closing price of our common stock on the grant date. In 2024, our Board’s Compensation Committee approved the grant to employees of 0.3 million RSUs including time-based RSUs, performance-based RSUs, and market-based RSUs. We account for forfeitures of stock-based awards as they occur. Time-based RSUs vest in equal installments generally over three or four years. The fair value of each time-based RSU is based on the closing price of our common stock on the date of grant. Compensation cost for time-based RSUs is recognized on a straight-line basis over the shorter of the stated vesting period or the period until employees become retirement-eligible. Performance-based RSUs cliff vest after three years subject to the achievement of certain performance goals over a three-year period. Performance-based RSUs granted prior to 2023 include a measure of earnings, a measure of return on invested capital, and a measure of our performance relative to certain customer satisfaction indices. Performance-based RSUs granted in 2023 and 2024 include a measure of return on invested capital. The fair value of each performance-based RSU is based on the closing price of our common stock on the date of grant. Compensation cost for performance-based RSUs is based on the expected achievement level of the performance goals, which is evaluated over the performance period, and recognized on a straight-line basis over the shorter of the stated vesting period or the period until employees become retirement-eligible. Beginning in 2023, we granted market-based RSUs that cliff vest after three years subject to a measure of total shareholder return over a three-year period relative to the shareholder return for a predefined group of companies. The fair value of each market-based RSU is based on a Monte Carlo simulation model on the date of grant using the following assumptions:
| 2024 |  | 2023
Risk-free interest rate | 4.31 | % |  | 4.60 | %
Expected volatility | 40.28 | % |  | 42.89 | %
Dividend yield | — |  |  | — |
Compensation cost for market-based RSUs is recognized on a straight-line basis over the shorter of the stated vesting period or the period until employees become retirement-eligible, regardless of whether the market condition is satisfied. The following table summarizes information about vested and nonvested RSUs for 2024:
| RSUs
| Shares |  | Weighted-Average Grant Date Fair Value
Nonvested at January 1 | 1.0 |  |  | $ | 108.26 |
Granted | 0.3 |  |  | $ | 171.84 |
Vested | (0.3) |  |  | $ | 85.56 |
Forfeited | (0.1) |  |  | $ | 138.69 |
Nonvested at December 31 | 0.9 |  |  | $ | 140.18 |
The weighted average grant-date fair value of RSUs and total fair value of RSUs vested are summarized in the following table:
| 2024 |  | 2023 |  | 2022
Weighted average grant-date fair value of RSUs granted | $ | 171.84 |  |  | $ | 139.11 |  |  | $ | 112.66 |
Total fair value of RSUs vested (in millions) | $ | 54.8 |  |  | $ | 76.0 |  |  | $ | 85.7 |
The following table summarizes the total stock-based compensation expense related to RSUs recognized in Selling, General, and Administrative Expenses in the Consolidated Statements of Income and the total recognized tax benefit related thereto:
| 2024 |  | 2023 |  | 2022
Stock-based compensation expense | $ | 36.5 |  |  | $ | 39.7 |  |  | $ | 31.5 |
Tax benefit related to stock-based compensation expense | $ | 4.1 |  |  | $ | 4.5 |  |  | $ | 4.0 |
Tax benefits related to vesting of RSUs and stock options exercised were $6.9 million in 2024, $9.0 million in 2023, and $9.7 million in 2022. As of December 31, 2024, there was $34.3 million of total unrecognized compensation cost related to non-vested RSUs, which is expected to be recognized over a weighted average period of 1.51 years. Stock Options Prior to 2017, we granted non-qualified stock options with a term of 10 years from the date of grant that vested in equal installments over four years. All stock options were fully vested as of December 31, 2020. The intrinsic value of stock options exercised was $1.0 million during 2024, $3.5 million during 2023, and $5.0 million during 2022. As of December 31, 2024, we had 12,309 stock options outstanding with a weighted average exercise price of $55.27 and weighted average contractual term of 0.87 years.

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