XML 40 R22.htm IDEA: XBRL DOCUMENT
v3.24.3

Associate Benefit Plans | 12 Months Ended
--- | ---
Aug. 31, 2024
Share-Based Payment Arrangement [Abstract] |
Stock-Based Compensation | ASSOCIATE BENEFIT PLANS The Company accounts for all stock-based payments in accordance with ASC Topic 718, “Compensation—Stock Compensation,” as amended. Stock-based compensation expense included in Operating expenses for fiscal years 2024, 2023 and 2022 was as follows:
| For the Fiscal Years Ended
| August 31, 2024 |  | September 2, 2023 |  | September 3, 2022
Stock options | $ | — |  | $ | 101 |  | $ | 1,261
Restricted stock units (1) | 14,900 |  | 14,933 |  | 14,810
Performance share units (1) | 3,600 |  | 3,311 |  | 2,883
Associate Stock Purchase Plan | 348 |  | 294 |  | 310
Total | 18,848 |  | 18,639 |  | 19,264
Deferred income tax benefit | (4,773) |  |  | (4,619) |  |  | (4,720) |
Stock-based compensation expense, net | $ | 14,075 |  | $ | 14,020 |  | $ | 14,544
(1)Includes equity award acceleration costs associated with associate severance and separation, which are included in Restructuring and other costs in the Consolidated Statements of Income for fiscal years 2024, 2023 and 2022. See Note 14, “Restructuring and Other Costs” for additional information. 2023 Omnibus Incentive Plan At the Company’s annual meeting of shareholders held on January 25, 2023, the shareholders approved the MSC Industrial Direct Co., Inc. 2023 Omnibus Incentive Plan (the “2023 Omnibus Incentive Plan”). The 2023 Omnibus Incentive Plan replaced the MSC Industrial Direct Co., Inc. 2015 Omnibus Incentive Plan (the “Prior Plan”) and, beginning January 25, 2023, all awards are granted under the 2023 Omnibus Incentive Plan. Awards under the 2023 Omnibus Incentive Plan may be made in the form of stock options, stock appreciation rights, restricted stock, restricted stock units, other share-based awards, and performance cash, performance shares or performance units. All outstanding awards under the Prior Plan will continue to be governed by the terms of the Prior Plan. Upon approval of the 2023 Omnibus Incentive Plan, the maximum aggregate number of shares of Class A Common Stock authorized to be issued under the 2023 Omnibus Incentive Plan was 2,186 shares, of which 2,004 authorized shares of Class A Common Stock were remaining as of August 31, 2024. Stock Options A summary of the Company’s stock option activity for fiscal year 2024 is as follows:
| Shares |  | Weighted-Average Exercise Price
Outstanding - beginning of year | 218 |  | $ | 81.60
Granted | — |  | —
Exercised | (119) |  | 80.28
Canceled/Forfeited | — |  | —
Outstanding - end of year | 99 |  | $ | 83.21
Exercisable - end of year | 99 |  | $ | 83.21
The aggregate intrinsic value of options exercised, which represents the difference between the exercise price and the market value of Class A Common Stock measured at each individual exercise date, during fiscal years 2024, 2023 and 2022 was $1,912, $4,393 and $5,855, respectively. There were no unrecognized stock‑based compensation costs related to stock options at August 31, 2024. Stock option awards outstanding under the Company’s incentive plans have been granted at exercise prices that are equal to the market value of Class A Common Stock on the date of grant. Such options generally vest over a period of four years and expire at seven years after the grant date. The Company recognizes compensation expense ratably over the vesting period, net of estimated forfeitures. The Company uses the Black-Scholes option-pricing model to estimate the fair value of stock options granted. The Company discontinued its grants of stock options in fiscal year 2020. As of August 31, 2024, there were 99 stock option awards outstanding and exercisable, with an exercise price of $83.21, a remaining contractual life of 1.1 years, and no intrinsic value. Performance Share Units In fiscal year 2020, the Company began granting performance share units (“PSUs”) as part of its long-term stock-based compensation program. PSUs cliff vest after a three-year performance period based on the achievement of specific performance goals as set forth in the applicable award agreement. Based on the extent to which the performance goals are achieved, vested shares may range from 0% to 200% of the target award amount. The following table summarizes all transactions related to PSUs under the 2023 Omnibus Incentive Plan and the Prior Plan (based on target award amounts) at August 31, 2024:
| Shares |  | Weighted-Average Grant Date Fair Value
Non-vested PSUs at the beginning of the year | 112 |  | $ | 81.81
Granted | 45 |  | 97.78
PSU adjustment (1) | 23 |  | 74.79
Vested | (46) |  | 74.79
Canceled/Forfeited | (11) |  | 88.78
Non-vested PSUs at the end of the year (2) | 123 |  | $ | 88.31
(1)PSU adjustment represents the net PSUs awarded above or below their target grants resulting from the achievement of performance goals above or below the performance targets established at grant. One grant goal was achieved at 200% of its target based on fiscal year 2021 through fiscal year 2023 financial results. (2)Excludes approximately 9 shares of accrued incremental dividend equivalent rights on outstanding PSUs granted under the 2023 Omnibus Incentive Plan and the Prior Plan. Restricted Stock Units A summary of the Company’s non-vested restricted stock unit (“RSU”) award activity under the 2023 Omnibus Incentive Plan and the Prior Plan for fiscal year 2024 is as follows:
| Shares |  | Weighted-Average Grant Date Fair Value
Non-vested RSUs at the beginning of the year | 467 |  | $ | 80.98 |
Granted | 192 |  | 98.13 |
Vested | (194) |  | 80.54 |
Canceled/Forfeited | (34) |  | 87.55 |
Non-vested RSUs at the end of the year (1) | 431 |  | $ | 88.29 |
(1)Excludes approximately 35 shares of accrued incremental dividend equivalent rights on outstanding RSUs granted under the 2023 Omnibus Incentive Plan and the Prior Plan. The fair value of each PSU and RSU is the closing stock price on the New York Stock Exchange of Class A Common Stock on the date of grant. PSUs are expensed over the three-year performance period of each respective grant and RSUs are expensed over the vesting period of each respective grant. Forfeitures of share-based awards are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from estimated forfeitures. The Company uses historical data to estimate pre-vesting PSU and RSU forfeitures and records stock-based compensation expense only for PSU and RSU awards that are expected to vest. Upon vesting, and, in the case of the PSUs, subject to the achievement of specific performance goals, a portion of the PSU and RSU awards may be withheld to satisfy the statutory income tax withholding obligation, and the remaining PSUs and RSUs will be settled in shares of Class A Common Stock. These awards accrue dividend equivalents on the underlying PSUs and RSUs (in the form of additional stock units) based on dividends declared on Class A Common Stock, and these dividend equivalents are paid to the award recipient in the form of unrestricted shares of Class A Common Stock on the vesting dates of the underlying PSUs and RSUs, subject, in the case of the dividend equivalents on the underlying PSUs, to the same performance vesting requirements. The unrecognized stock-based compensation cost related to the PSUs and RSUs at August 31, 2024 were $3,259 and $25,727, respectively, which are expected to be recognized over a weighted-average period of 1.2 and 2.5 years, respectively. Associate Stock Purchase Plan The Company has established the MSC Industrial Direct Co., Inc. Amended and Restated Associate Stock Purchase Plan (the “Associate Stock Purchase Plan”), the terms of which qualified plan allow for eligible associates (as defined in the Associate Stock Purchase Plan) to participate in the purchase of up to a maximum of five shares of Class A Common Stock at a price equal to 90% of the closing price at the end of each stock purchase period. On January 27, 2021, the shareholders of the Company approved an increase in the authorized but unissued shares of Class A Common Stock reserved for sale under the Associate Stock Purchase Plan from 1,500 shares to 1,850 shares. As of August 31, 2024, approximately 182 shares remained reserved for issuance under the Associate Stock Purchase Plan. During fiscal years 2024 and 2023, associates purchased approximately 53 shares and 56 shares, respectively, of Class A Common Stock at an average per share price of $84.15 and $79.41, respectively. Savings Plan The Company maintains a defined contribution plan with both a profit sharing feature and a 401(k) feature, which covers all associates who have completed at least one month of service with the Company. For fiscal years 2024, 2023 and 2022, the Company contributed $9,727, $9,481 and $9,019, respectively, to the plan. The Company contributions are discretionary.

X
- Definition The entire disclosure for share-based payment arrangement. + References Reference 1: http://www.xbrl.org/2003/role/exampleRef -Topic 718 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a)(1) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480429/718-10-50-2 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 718 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/718/tableOfContent Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 718 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480429/718-10-50-2 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 718 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (h)(2) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480429/718-10-50-2 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 718 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (h)(2)(i) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480429/718-10-50-2 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 718 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (l) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480429/718-10-50-2 + Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsSharebasedPaymentsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration