STOCK-BASED COMPENSATION PLANS

12 Months Ended

Dec. 31, 2024

Share-Based Payment Arrangement [Abstract]

On May 15, 2024, the Company’s shareholders approved the amendment and restatement of the Company’s Long Term Incentive Plan (the “2024 Incentive Plan”). The aggregate maximum number of shares that may be issued or transferred under the 2024 Incentive Plan is 0.7 million. The Company currently grants RSAs, RSUs and PSUs provided to Company employees and non-employee directors pursuant to the 2024 Incentive Plan. The 2024 Incentive Plan expires on March 24, 2034. The terms of the awards (including vesting schedules) are established by the Compensation Committee of the Company’s Board of Directors. As of December 31, 2024, there were 0.7 million shares available for issuance under the 2024 Incentive Plan.

Restricted Stock Awards

The Company grants RSAs to employees and non-employee directors. RSAs qualify as participating securities as each award contains non-forfeitable rights to dividends. As such, the two-class method is required for the computation of EPS. RSAs contain voting rights and are considered outstanding at the date of grant. Refer to Note 7. Earnings Per Share for further details. RSAs are subject to vesting periods of up to five years. Compensation expense for RSAs is calculated based on the average market price of the Company’s common stock at the date of grant and recognized over the requisite vesting period on a straight-line basis. Forfeitures are estimated at the time of valuation and reduce expense ratably over the vesting period. This estimate is adjusted annually based on the extent to which actual or expected forfeitures differ from the previous estimate. The Company issues new shares of common stock or treasury shares, if available, to settle vested RSAs.

The following table summarizes RSA activity and related information for 2024:


	Awards	Weighted Average Grant Date Fair Value
Nonvested at January 1, 2024	318,955	$	145.83
Granted	54,657	$	282.02
Vested	(103,031)	$	144.22
Forfeited	(9,587)	$	174.06
Nonvested at December 31, 2024	260,994	$	173.89

The total fair value of RSAs that vested during the years ended December 31, 2024, 2023 and 2022, was $14.9 million, $14.2 million and $14.7 million, respectively.

As of December 31, 2024, there was $18.9 million of total unrecognized compensation cost related to RSAs which is expected to be recognized over a weighted-average period of 1.9 years.

Restricted Stock Units

The Company grants RSUs to non-employee directors. RSUs are vested 100% at the time of grant and settled on the date of the directors “separation of service,” as such term is defined in internal revenue service code §1.409A-1(h), and generally includes departure due to either death, disability, or retirement. RSUs convey no voting rights, and therefore are not considered outstanding when granted. Granted RSUs participate in dividends, however the dividends are not payable until a director’s separation of service with the Company. In the event a director terminates his or her directorship with the Company for reasons other than defined above, the RSUs granted and any accrued dividends will be forfeited.

RSUs settle in a cash payment equal to the average of the Company’s high and low stock price on the separation of service date and therefore constitute liability instruments, which require remeasurements to fair value each reporting period. The changes in fair value as a result of the changes in the Company’s stock price are recognized in Selling, general and administrative expenses within the Consolidated Statements of Operations. As of December 31, 2024, the total liability for unsettled cash-settled RSUs, recorded at fair value, was $14.4 million.

Performance Share Units

The Company grants PSUs to certain key employees. PSUs are evaluated over a two-year performance period based on actual performance targets achieved, as well as the market-based return of the Company’s common stock relative to that of their peer group. PSU payout percentages can range between 0% and 200% and are subject to vesting over a three-year service period, which at the end of year three, will convert into shares of the Company’s common stock. Compensation cost for PSUs is based on the Company’s closing stock price on the date of grant, forecasted achievement of performance targets and the estimated grant date per share value of market-based performance utilizing a Monte Carlo simulation model.

The following table summarizes PSU activity and related information for 2024:


	Awards	Weighted Average Grant Date Fair Value
Nonvested at January 1, 2024	55,674	$	188.82
Granted	15,146	$	261.62
Vested	(62,126)	$	424.14
Performance adjustment	23,352	$	424.14

Nonvested at December 31, 2024	32,046	$	246.77

The total fair value of PSUs that vested during the years ended December 31, 2024, 2023 and 2022, was $26.4 million, $3.3 million and $4.7 million, respectively.

The weighted average grant date fair value of PSUs granted during the years ended December 31, 2024, 2023 and 2022, was $4.0 million, $3.1 million and $5.0 million, respectively.

Employee Stock Purchase Plan

On May 15, 2024, the Company’s shareholders approved the amendment and restatement of the Employee Stock Purchase Plan (the “ESPP Plan”). As a result, the ESPP Plan authorizes the issuance of up to 4.75 million shares of common stock and provides that no options to purchase shares may be granted under the Purchase Plan after May 24, 2034. The ESPP Plan is available to all employees of the Company and its participating subsidiaries and is a qualified plan as defined by Section 423 of the Internal Revenue Code. At the end of each fiscal quarter (the “Option Period”) during the term of the ESPP Plan, employees can acquire shares of common stock from the Company at 85% of the fair market value of the common stock on the first or the last day of the Option Period, whichever is lower. As of December 31, 2024, there were 428,047 shares available for issuance under the ESPP Plan. During the years ended December 31, 2024, 2023 and 2022, the Company issued 92,787, 112,189 and 146,416 shares, respectively, of common stock to employees participating in the ESPP Plan. With respect to shares issued under the ESPP Plan, the Company’s Board of Directors has authorized specific share repurchases to fund the shares issuable under the ESPP Plan.

The weighted average per share fair value of employee stock purchase rights issued pursuant to the ESPP Plan was $68.92, $50.04 and $39.45 during the years ended December 31, 2024, 2023 and 2022, respectively. The fair value of employee stock purchase rights is calculated using the grant date stock price, the value of the embedded call option and the value of the embedded put option. Employees can contribute a maximum of 10% of their compensation, up to a maximum of $25,000 annually under the ESPP Plan. Cash received from the ESPP Plan purchases was $24.4 million, $21.3 million and $19.5 million for the years ended December 31, 2024, 2023 and 2022, respectively.

Stock-Based Compensation

Total stock-based compensation includes expenses for both equity and cash-settled awards and is recognized in Selling, general and administrative expenses within the Consolidated Statements of Operations. Stock-based compensation related to equity-settled awards was $25.2 million, $20.1 million and $27.0 million for the years ended December 31, 2024, 2023 and 2022, respectively. Stock-based compensation related to cash-settled awards was $5.0 million, $4.8 million and $0.5 million for the years ended December 31, 2024, 2023 and 2022, respectively. Tax benefits related to total stock-based compensation were $8.3 million, $8.5 million and $5.2 million for the years ended December 31, 2024, 2023 and 2022, respectively.