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Stock-Based Compensation | 12 Months Ended
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Jun. 30, 2023
Share-Based Payment Arrangement [Abstract] |
Stock-Based Compensation | Stock-Based Compensation Our shareholders previously approved the Lancaster Colony Corporation 2015 Omnibus Incentive Plan (the “2015 Plan”). The 2015 Plan reserved 1,500,000 common shares for issuance to our employees and directors. All awards granted under this plan will be exercisable at prices not less than fair market value as of the date of the grant. The vesting period for awards granted under this plan varies as to the type of award granted, and the maximum term of these awards is seven years. We recognize compensation expense over the requisite service period of the grant. Compensation expense is reflected in Cost of Sales or Selling, General and Administrative Expenses based on the grantees’ salaries expense classification. We estimate a forfeiture rate based on historical experience. Stock-Settled Stock Appreciation Rights Prior to 2022, we used periodic grants of stock-settled stock appreciation rights (“SSSARs”) as a vehicle for rewarding certain employees with long-term incentives for their efforts in helping to create long-term shareholder value. We calculated the fair value of SSSARs grants using the Black-Scholes option-pricing model. Our policy is to issue shares upon SSSARs exercise from new shares that had been previously authorized. In 2021, we granted SSSARs to various employees under the terms of the plan. The following table summarizes information relating to these grants:
|  |  |  |  | 2021
SSSARs granted |  |  |  |  | 124 |
Weighted average grant date fair value per right |  |  |  |  | $ | 36.24 |
Weighted average assumptions used in fair value calculations: |  |  |  |  |
Risk-free interest rate |  |  |  |  | 0.51 | %
Dividend yield |  |  |  |  | 1.69 | %
Volatility factor of the expected market price of our common stock |  |  |  |  | 28.63 | %
Expected life in years |  |  |  |  | 4.55
For these grants, the volatility factor was estimated based on actual historical volatility of our stock for a time period equal to the term of the SSSARs. The expected average life was determined based on historical exercise experience for this type of grant. The SSSARs we granted generally vest over a 3-year period whereby one-third vests on the first anniversary of the grant date, one-third vests on the second anniversary of the grant date and one-third vests on the third anniversary of the grant date. The following table summarizes our SSSARs compensation expense and tax benefits recorded for each of the years ended June 30:
| 2023 |  | 2022 |  | 2021
Compensation expense | $ | 1,972 |  |  | $ | 3,566 |  |  | $ | 3,568 |
Tax benefits | $ | 216 |  |  | $ | 749 |  |  | $ | 749 |
Intrinsic value of exercises | $ | 3,873 |  |  | $ | 317 |  |  | $ | 6,187 |
The total fair values of SSSARs vested for each of the years ended June 30 were as follows:
| 2023 |  | 2022 |  | 2021
Fair value of vested rights | $ | 2,611 |  |  | $ | 4,095 |  |  | $ | 3,404 |
The following table summarizes the activity relating to SSSARs granted under the plan for the year ended June 30, 2023:
| Number of Rights |  | Weighted Average Exercise Price |  | Weighted Average Remaining Contractual Life in Years |  | Aggregate Intrinsic Value
Outstanding at beginning of year | 393 |  |  | $ | 158.12 |  |  |  |  |
Exercised | (225) |  |  | $ | 152.46 |  |  |  |  |
Granted | — |  |  | $ | — |  |  |  |  |
Forfeited | (13) |  |  | $ | 165.36 |  |  |  |  |
Outstanding at end of year | 155 |  |  | $ | 165.77 |  |  | 2.15 |  | $ | 5,463 |
Exercisable and vested at end of year | 122 |  |  | $ | 162.57 |  |  | 2.01 |  | $ | 4,709 |
Vested and expected to vest at end of year | 155 |  |  | $ | 165.77 |  |  | 2.15 |  | $ | 5,463 |
The following table summarizes information about the SSSARs outstanding by grant year at June 30, 2023:
|  | Outstanding |  | Exercisable
|  |  |  |  |  | Weighted Average |  |  |  |
Grant Years |  | Range of Exercise Prices |  | Number Outstanding |  | Remaining Contractual Life in Years |  | Exercise Price |  | Number Exercisable |  | Weighted Average Exercise Price
2021 |  | $167.18-$187.30 |  | 78 |  | 2.64 |  | $177.79 |  | 45 |  | $177.76
2020 |  | $153.71-$154.22 |  | 76 |  | 1.66 |  | $153.71 |  | 76 |  | $153.71
2019 |  | $154.48 |  | 1 |  | 0.66 |  | $154.48 |  | 1 |  | $154.48
At June 30, 2023, there was $0.8 million of unrecognized compensation expense related to SSSARs that we will recognize over a weighted-average period of 1 year. Restricted Stock We use periodic grants of restricted stock as a vehicle for rewarding our nonemployee directors and certain employees with long-term incentives for their efforts in helping to create long-term shareholder value. In 2023, 2022 and 2021, we granted shares of restricted stock to various employees under the terms of the plan. The following table summarizes information relating to these grants:
| 2023 |  | 2022 |  | 2021
Employees |  |  |  |  |
Restricted stock granted | 29 |  |  | 30 |  |  | 17 |
Grant date fair value | $ | 4,448 |  |  | $ | 5,691 |  |  | $ | 2,918 |
Weighted average grant date fair value per award | $ | 154.80 |  |  | $ | 189.12 |  |  | $ | 177.89 |
The restricted stock under these employee grants vests 3 years after the grant date. Under the terms of our grants, employees receive dividends on unforfeited restricted stock regardless of their vesting status. In 2023, 2022 and 2021, we also granted shares of restricted stock to our nonemployee directors under the terms of the plan. The following table summarizes information relating to each of these grants:
| 2023 |  | 2022 |  | 2021
Nonemployee directors |  |  |  |  |
Restricted stock granted | 4 |  |  | 5 |  |  | 4 |
Grant date fair value | $ | 919 |  |  | $ | 799 |  |  | $ | 774 |
Weighted average grant date fair value per award | $ | 203.34 |  |  | $ | 162.15 |  |  | $ | 172.89 |
The restricted stock under these nonemployee director grants generally vests 1 year after the grant date. All of the shares granted during 2023 are expected to vest. Dividends earned on the stock during the vesting period will be paid to the directors at the time the stock vests. The following table summarizes our restricted stock compensation expense and tax benefits recorded for each of the years ended June 30:
| 2023 |  | 2022 |  | 2021
Compensation expense | $ | 4,432 |  |  | $ | 4,942 |  |  | $ | 3,558 |
Tax benefits | $ | 677 |  |  | $ | 1,038 |  |  | $ | 747 |
The total fair values of restricted stock vested for each of the years ended June 30 were as follows:
| 2023 |  | 2022 |  | 2021
Fair value of vested shares | $ | 4,996 |  |  | $ | 2,772 |  |  | $ | 3,148 |
The following table summarizes the activity relating to restricted stock granted under the plan for the year ended June 30, 2023:
| Number of Shares |  | Weighted Average Grant Date Fair Value
Unvested restricted stock at beginning of year | 74 |  |  | $ | 172.27 |
Granted | 33 |  |  | $ | 161.40 |
Vested | (32) |  |  | $ | 156.89 |
Forfeited | (10) |  |  | $ | 171.29 |
Unvested restricted stock at end of year | 65 |  |  | $ | 174.62 |
At June 30, 2023, there was $5.1 million of unrecognized compensation expense related to restricted stock that we will recognize over a weighted-average period of 2 years. Performance Units Beginning in 2022, we use periodic grants of performance units as a vehicle for rewarding certain employees with long-term incentives for their efforts in helping to create long-term shareholder value. These performance units are based on two performance metrics, with equal weightings, as follows: •a market condition based on relative total shareholder return versus the S&P 1500 Packaged Foods & Meats Index; and •a performance condition based on revenue growth over the applicable performance period. These performance units will vest 3 years after the grant date and will be settled in shares of common stock equal to the number of performance units granted multiplied by a percentage between 0% and 200% depending on the achievement of the above-noted performance metrics over the 3-year performance period. Our policy is to issue shares upon the vesting of performance units from new shares that had been previously authorized. Dividend equivalents earned during the vesting period will be paid at the time the awards vest. In 2023 and 2022, we granted performance units to various employees under the terms of the plan. The following table summarizes information relating to these grants:
| 2023 |  | 2022 |  |
Performance units granted | 26 |  |  | 20 |  |  |
Grant date fair value | $ | 4,572 |  |  | $ | 4,151 |  |  |
Weighted average grant date fair value per award | $ | 173.73 |  |  | $ | 201.67 |  |  |
For our performance units with a performance condition, the grant-date fair value is equal to the closing price of our common stock on the grant date. For our performance units with a market condition, the grant-date fair value is estimated using a Monte Carlo simulation. The assumptions used in the Monte Carlo simulation were as follows:
| 2023 |  | 2022 |  |
Risk-free interest rate | 3.18 | % |  | 0.41 | % |  |
Dividend yield | 2.08 | % |  | 1.65 | % |  |
Volatility factor of the expected market price of our common stock | 32.20 | % |  | 31.30 | % |  |
The following table summarizes our performance units compensation expense and tax benefits recorded for each of the years ended June 30:
| 2023 |  | 2022 |  |
Compensation expense | $ | 2,678 |  |  | $ | 1,055 |  |  |
Tax benefits | $ | 355 |  |  | $ | 222 |  |  |
The following table summarizes the activity relating to performance units granted under the plan for the year ended June 30, 2023:
| Number of Units |  | Weighted Average Grant Date Fair Value
Unvested performance units at beginning of year | 19 |  |  | $ | 201.65 |
Granted | 26 |  |  | $ | 173.73 |
Vested | — |  |  | $ | — |
Forfeited | (5) |  |  | $ | 186.60 |
Unvested performance units at end of year | 40 |  |  | $ | 185.39 |
At June 30, 2023, there was $4.2 million of unrecognized compensation expense related to performance units that we will recognize over a weighted-average period of 2 years.

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