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Share-Based Compensation

12 Months Ended

Sep. 30, 2024

Share-Based Compensation

Share-Based Compensation

8. Share-Based Compensation

We provide compensation benefits to certain key employees under several share-based plans providing for performance-accelerated and/or time-vested restricted stock unit awards, and to non-employee directors under a separate compensation plan for non-employee directors. As of September 30, 2024, our equity compensation plans had a total of 943,707 shares authorized and available for future issuance.

Performance-Accelerated Restricted Stock Unit (PARS) Awards, Time-Vested Restricted Stock Unit (RSU) Awards, and Performance Share Unit (PSU) Awards

PARS awards represented the right to receive a specified number of shares of Company common stock if and when the award vested. PARS awards were last granted in fiscal 2020, and the last outstanding PARS awards vested in October 2024. PARS awards were not stock and did not give the recipient any rights as a shareholder until it vested and was paid out in shares of stock. PARS awards had a five-year vesting period, with accelerated vesting if certain targets based on market conditions are achieved. In these cases, if it was probable that the performance condition would be met, the Company recognized compensation cost on a straight-line basis over the shorter performance period; otherwise, it would recognize compensation cost over the longer service period. Compensation cost for the PARS awards outstanding during fiscal 2023 and 2024 was recognized over the shorter performance period, as it was probable the performance condition would be met. The PARS award grants were valued at the stock price on the date of grant.

The terms of the Company’s RSU awards are similar to those of the PARS awards, but without any provision for acceleration of the vesting date. Each RSU represents the right to receive one share of Company common stock if the recipient remains continuously employed by the Company until the award vests. RSU awards granted prior to fiscal 2023 were normally granted in the spring with full vesting approximately 3 ½ years after the effective award date, while RSU awards granted in fiscal 2023 were normally granted in the spring with vesting one-third at the end of each November beginning approximately 18 months after the award date, and RSU awards granted in fiscal 2024 were granted in the fall with vesting one-third at the end of each November beginning approximately 12 months after the award date. The RSU award grants were valued at the stock price on the date of grant.

Beginning in fiscal 2022, the Company granted PSU awards with a three-year vesting period, with each PSU representing the right to receive one share of Company common stock if certain performance targets are achieved. The targets are based on achieving certain EBITDA metrics and a Total Shareholder return (rTSR) metric over a three-year period. Beginning in fiscal 2023, the Company granted PSU awards with a three-year vesting period, with performance targets based on achieving certain EBITDA and Return on Invested Capital (ROIC) metrics and utilizing a rTSR modifier.

Pretax compensation expense related to the above awards was $7.5 million, $7.6 million and $6.1 million for 2024, 2023 and 2022, respectively.

The following summary presents information regarding outstanding share-based compensation awards as of the specified dates, and changes during the specified periods:


		FY 2024					FY 2023					FY 2022
				Estimated					Estimated					Estimated
				Weighted					Weighted					Weighted
		Shares		Avg. Price			Shares		Avg. Price			Shares		Avg. Price
Nonvested at October 1,		189,725		$	94.91		265,367		$	84.29		226,705		$	76.15
Granted		78,016			108.16		84,880			93.64		117,045			82.54
Vested		(34,753)			96.52		(119,811)			82.28		(75,327)			56.87
Cancelled		(12,230)			94.91		(40,711)			85.00		(3,056)			89.51
Nonvested at September 30,		220,758		$	102.40		189,725		$	94.91		265,367		$	84.29

Compensation Plan for Non-Employee Directors

In addition to an annual cash retainer, we provide each non-employee director with an annual equity award having a grant date market value of $180,000, based on the NYSE closing price of the Company’s stock on the date of grant. The award is in the form of Restricted Stock Units, each of which represents the right to receive one share of Company stock at the end of a one-year vesting period. At the end of the vesting period, each award will be converted into the right to receive the same number of actual shares of common stock, plus additional shares representing the value of the quarterly dividends which would have accrued on the underlying shares during the vesting period. Compensation expense related to the non-employee director grants was $1.1 million, $1.3 million and $1.2 million for 2024, 2023 and 2022, respectively.

Total Share-Based Compensation

The total share-based compensation cost that has been recognized in results of operations and included within SG&A was $8.6 million, $8.9 million and $7.3 million for 2024, 2023 and 2022, respectively. The total income tax benefit recognized in results of operations for share-based compensation arrangements was $1.9 million, $1.3 million and $1.5 million for 2024, 2023 and 2022, respectively. As of September 30, 2024, there was $9.0 million of total unrecognized compensation cost related to share-based compensation arrangements. That cost is expected to be recognized over a weighted-average period of 1.2 years.