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Stock-Based Compensation | 3 Months Ended
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Sep. 30, 2023
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] |
Stock-Based Compensation | 15. Stock-Based Compensation Adtalem’s current stock-based incentive plan is its Fourth Amended and Restated Incentive Plan of 2013, which is administered by the Compensation Committee of the Board. Under the plan, directors, key executives, and managerial employees are eligible to receive stock options, restricted stock units (“RSUs”), performance stock units (“PSUs”), and other forms of stock awards. As of September 30, 2023, 2,275,788 shares of common stock were available for future issuance under this plan. Stock-based compensation expense is recognized on a straight-line basis over the required service period. Adtalem accounts for stock-based compensation granted to retirement eligible employees that fully vests upon an employee’s retirement under the non-substantive vesting period approach. Under this approach, the entire stock-based compensation expense is recognized at the grant date for stock-based grants issued to retirement eligible employees. For non-retirement eligible employees, stock-based compensation expense is recognized as expense over the employee requisite service period. We account for forfeitures of unvested awards in the period they occur. Adtalem issues new shares of common stock to satisfy stock option exercises, RSU vests, and PSU vests. Stock-based compensation expense, which is included in student services and administrative expense, and the related income tax benefit were as follows (in thousands): ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended
​ | ​ | September 30,
​ | ​ | 2023 | ​ | 2022
Stock-based compensation | ​ | $ | 7,455 | ​ | $ | 6,145
Income tax benefit | ​ |  | (2,495) | ​ |  | (1,682)
Stock-based compensation, net of tax | ​ | $ | 4,960 | ​ | $ | 4,463
​ There was no capitalized stock-based compensation cost as of September 30, 2023 and June 30, 2023. Stock Options The Compensation Committee of the Board determined to no longer grant stock options beginning with the fiscal year 2023 stock-based grants. We granted options generally with a four-year graduated vesting from the grant date and expire ten years from the grant date. The option price under the plan is the fair value of the shares on the date of the grant. The following table summarizes stock option activity for the three months ended September 30, 2023: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | Weighted-Average | ​ | ​
​ | ​ | Number of | ​ | ​ | ​ | Remaining | ​ | Aggregate
​ | ​ | Stock | ​ | Weighted-Average | ​ | Contractual Life | ​ | Intrinsic Value
​ | ​ | Options | ​ | Exercise Price | ​ | (in years) | ​ | (in thousands)
Outstanding as of July 1, 2023 |  | 1,045,801 | ​ | $ | 36.02 |  | ​ | ​ | ​ | ​
Exercised |  | (15,400) | ​ | ​ | 35.65 |  | ​ | ​ | ​ | ​
Expired |  | (1,144) | ​ | ​ | 28.32 |  | ​ | ​ | ​ | ​
Outstanding as of September 30, 2023 |  | 1,029,257 | ​ |  | 36.03 |  | 5.3 | ​ | $ | 7,405
Exercisable as of September 30, 2023 |  | 889,582 | ​ | $ | 36.17 |  | 5.0 | ​ | $ | 6,333
​ The fair value of stock options that vested during the three months ended September 30, 2023 and 2022 was $1.9 million and $2.1 million, respectively. As of September 30, 2023, $0.7 million of unrecognized stock-based compensation expense related to unvested stock options is expected to be recognized over a remaining weighted-average period of 1.8 years. The total intrinsic value of options exercised for the three months ended September 30, 2023 and 2022 was $0.1 million and $0.6 million, respectively. RSUs Prior to fiscal year 2023, we granted RSUs generally with a four-year graduated vesting from the grant date. Beginning in fiscal year 2023, we grant RSUs generally with a three-year graduated vesting from the grant date. We also regularly grant RSUs to our Board members with a one-year cliff vest from the grant date. The recipient of the RSUs has the right to receive dividend equivalents, if any. The fair value of RSUs is the closing market price of our common stock on the grant date. The following table summarizes RSU activity for the three months ended September 30, 2023: ​
​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | Weighted-Average
​ | ​ | Number of | ​ | Grant Date
​ | ​ | RSUs | ​ | Fair Value
Unvested as of July 1, 2023 |  | 737,733 | ​ | $ | 37.22
Granted |  | 354,030 | ​ |  | 42.98
Vested |  | (231,082) | ​ |  | 37.55
Forfeited |  | (4,938) | ​ |  | 40.02
Unvested as of September 30, 2023 |  | 855,743 | ​ | $ | 39.50
​ The weighted-average grant date fair value of RSUs granted in the three months ended September 30, 2023 and 2022 was $42.98 and $39.53, respectively. The fair value of RSUs that vested during the three months ended September 30, 2023 and 2022 was $8.7 million and $6.4 million, respectively. As of September 30, 2023, $22.5 million of unrecognized stock-based compensation expense related to unvested RSUs is expected to be recognized over a remaining weighted-average period of 2.2 years. PSUs We issue PSUs generally with a three-year cliff vest from the grant date. Our annual grant of PSUs is expected to be granted later in fiscal year 2024. The fair value of PSUs is the closing market price of our common stock on the grant date. We estimate the number of shares that will vest under our PSU awards when recognizing stock-based compensation expense for each reporting period. The final number of shares that vest under our PSUs is based on metrics approved by the Compensation Committee of the Board. The following table summarizes PSU activity for the three months ended September 30, 2023: ​
​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | Weighted-Average
​ | ​ | Number of | ​ | Grant Date
​ | ​ | PSUs | ​ | Fair Value
Unvested as of July 1, 2023 |  | 490,300 | ​ | $ | 35.17
Granted (1) |  | 149,690 | ​ |  | 42.98
Vested |  | (126,918) | ​ |  | 29.92
Forfeited |  | (42,952) | ​ |  | 30.10
Unvested as of September 30, 2023 |  | 470,120 | ​ | $ | 39.27
(1) Includes incremental PSUs awarded upon achievement of metrics.
​ The weighted-average grant date fair value of PSUs granted in the three months ended September 30, 2023 was $42.98. We did not grant any PSUs for the three months ended September 30, 2022. The fair value of PSUs that vested during the three months ended September 30, 2023 and 2022 was $4.1 million and $3.4 million, respectively. As of September 30, 2023, $12.9 million of unrecognized stock-based compensation expense related to unvested PSUs is expected to be recognized over a remaining weighted-average period of 1.8 years.

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