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STOCK-BASED COMPENSATION PLANS | 12 Months Ended
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Aug. 31, 2024
Share-Based Payment Arrangement [Abstract] |
STOCK-BASED COMPENSATION PLANS | NOTE 13. STOCK-BASED COMPENSATION PLANS The Company's stock-based compensation plans provide for the issuance of incentive and nonqualified stock options, restricted stock awards and performance-based awards. The Compensation Committee of the Board (the "Compensation Committee") approves all awards that are granted under the Company's stock-based compensation plans. Stock-based compensation expense for 2024, 2023 and 2022 of $45.1 million, $60.5 million and $47.0 million, respectively, was primarily included in SG&A expenses on the Company's consolidated statements of earnings. Total tax benefits recognized in the consolidated statements of earnings related to stock-based compensation expense were $10.6 million, $14.2 million and $9.3 million for the years ended August 31, 2024, 2023 and 2022, respectively. As of August 31, 2024, total unrecognized compensation cost related to unvested stock-based compensation arrangements was $21.3 million, which is expected to be recognized over a weighted average period of 1.8 years. Restricted Stock Units Restricted stock units issued under the Company's stock-based compensation plans may not be sold, transferred, pledged or assigned until service-based restrictions lapse. The restricted stock units generally vest and are converted to shares of the Company's common stock in three equal installments on each of the first three anniversaries of the date of grant. Generally, upon termination of employment, restricted stock units that have not vested are forfeited. Other than awards granted to certain executives, which continue to vest following qualifying retirement, a pro-rata portion of the unvested restricted stock awarded will vest and become payable upon death, disability or qualifying retirement. The estimated fair value of the restricted stock units is based on the closing price of the Company's common stock on the date of grant, discounted for the expected dividend yield through the vesting period. Compensation cost related to the restricted stock units is recognized ratably over the service period and is included in equity on the Company's consolidated balance sheets. Performance Stock Units Performance stock units issued under the Company's stock-based compensation plans may not be sold, transferred, pledged or assigned until service-based restrictions lapse and any performance objectives have been attained as established by the Compensation Committee. Performance stock units have a three-year performance period that includes the fiscal year in which the awards were granted and the succeeding two fiscal years (the "performance period"). Recipients of these awards generally must be actively employed by and providing services to the Company on the last day of the performance period in order to receive an award payout. Generally, upon termination of employment, performance stock units that have not vested are forfeited. Other than awards granted to certain executives, which continue to vest following qualifying retirement, a pro-rata portion of the performance stock units will vest and become payable at the end of the performance period upon death, disability or qualifying retirement. Compensation cost for performance stock units is accrued based on the probable outcome of specified performance conditions, net of estimated forfeitures. The Company accrues compensation cost if it is probable that the performance conditions will be met. The Company reassesses the probability of meeting the specified performance conditions at the end of each reporting period and adjusts compensation cost, as necessary, based on the probability of achieving the performance conditions. If the performance conditions are not met at the end of the performance period, the Company reverses the related compensation cost. Performance stock units awarded will be settled in shares of the Company's common stock. Award payouts range from a threshold of 50% to a maximum of 200% for each portion of the target awards. The fair value of these performance stock units is remeasured each reporting period and is recognized ratably over the performance period. Performance targets established by the Compensation Committee for performance stock units were weighted 75% based on the Company's cumulative EBITDA targets and positive return on invested capital during the performance period, as approved by the Board in the respective year's business plan, and 25% based on a three-year relative total stockholder return metric. The performance stock units associated with the Company's cumulative EBITDA targets and positive return on invested capital were classified as liability awards on the date of grant and are included in accrued expenses and other payables on the Company's consolidated balance sheets until the start of the third year within the performance period. Upon entering the third year within the performance period when the final EBITDA target is set, the liability awards are reclassified as equity awards. The performance stock units associated with the total stockholder return metric were included in equity on the Company's consolidated balance sheets on the date of grant and were valued at fair value using the Monte Carlo pricing model. The following table summarizes the total liability awards and equity awards granted:
|  |  |  | Restricted Stock Awards/Units |  | Performance Awards
2022 grants |  |  |  | 652,951 |  |  | 328,734 |
2023 grants |  |  |  | 633,898 |  |  | 335,746 |
2024 grants |  |  |  | 524,943 |  |  | 244,931 |
As of August 31, 2024, the Company had 3,145,024 shares of common stock available for future grants. Information for restricted stock units and performance stock units accounted for as equity awards is as follows:
|  | Number |  | Weighted Average Fair Value
Outstanding as of August 31, 2021 |  | 2,190,795 |  |  | $ | 20.67 |
Granted(1) |  | 1,466,628 |  |  | 28.16 |
Vested |  | (1,617,943) |  |  | 18.84 |
Forfeited |  | (45,850) |  |  | 23.57 |
Outstanding as of August 31, 2022 |  | 1,993,630 |  |  | 27.59 |
Granted(1) |  | 1,438,695 |  |  | 36.88 |
Vested |  | (1,621,002) |  |  | 25.32 |
Forfeited |  | (33,732) |  |  | 36.65 |
Outstanding as of August 31, 2023 |  | 1,777,591 |  |  | 37.01 |
Granted(1) |  | 1,084,719 |  |  | 47.73 |
Vested |  | (1,256,412) |  |  | 38.03 |
Forfeited |  | (57,312) |  |  | 41.95 |
Outstanding as of August 31, 2024 |  | 1,548,586 |  |  | $ | 43.52 |
_______________________________ (1) Includes grants related to (i) all restricted stock units accounted for as equity awards, (ii) performance stock units accounted for as equity awards on the date of grant and (iii) performance stock units that were reclassified from liability awards to equity awards in the applicable year, such year being the third year of the respective performance period for such performance stock units. The total fair value of shares vested during 2024, 2023 and 2022 was $47.8 million, $41.0 million and $30.5 million, respectively. The Company granted 188,453 and 269,052 equivalent shares of restricted stock units and performance stock units accounted for as liability awards during 2024 and 2023, respectively. As of August 31, 2024, the Company had 455,667 equivalent shares of awards outstanding and expects 432,884 equivalent shares to vest. Stock Purchase Plan Almost all U.S. resident employees may participate in the Company's employee stock purchase plan. Each eligible employee may purchase up to 500 shares annually. The Board established a 15% purchase discount based on market prices on specified dates for 2024, 2023 and 2022. Yearly activity of the stock purchase plan was as follows:
|  | Year Ended August 31,
|  | 2024 |  | 2023 |  | 2022
Shares subscribed |  | 259,500 |  |  | 272,980 |  |  | 279,370 |
Price per share |  | $ | 42.16 |  |  | $ | 41.31 |  |  | $ | 29.90 |
Shares purchased |  | 238,850 |  |  | 248,080 |  |  | 313,790 |
Price per share |  | $ | 41.31 |  |  | $ | 29.90 |  |  | $ | 17.14 |
Shares available for future issuance |  | 1,437,154 |  |  |  |  |

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