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Equity | 12 Months Ended
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Dec. 31, 2024
Equity: |
Equity |
| (12) | Equity
Share-Based Payments The Company maintains a stock option program for key employees, executives and directors. The plans, all of which have been approved by shareholder vote, provide for the granting of both nonqualified and incentive options. Options granted under the plans typically have a six-year term and vest over a four to five-year period. The fair value of shares vested aggregated $1.2 million, $1.2 million and $1.3 million in 2024, 2023 and 2022, respectively. Compensation cost, net of estimated forfeitures, is recognized on a straight-line basis over the requisite service period for the entire award. Forfeitures are estimated based on historic trends. It is generally the Company’s policy to issue new shares upon exercise of stock options. The following table sets forth information with respect to nonvested options for 2024:
|  | Number of Shares |  |  | Weighted Average Grant Date Fair Value |
Nonvested options – beginning of year |  |  | 122,100 |  |  | $ | 24.47 |
Nonvested options granted |  |  | 47,250 |  |  | $ | 33.31 |
Nonvested options vested or forfeited |  |  | (50,700 | ) |  | $ | 19.73 |
Nonvested options – end of year |  |  | 118,650 |  |  | $ | 30.02 |
The effect of share-based payment expenses decreased income statement line items as follows:
|  | Year Ended December 31, |
|  | 2024 |  |  | 2023 |  |  | 2022 |
Income before income taxes |  | $ | 2,379 |  |  | $ | 2,525 |  |  | $ | 3,143 |
Net income attributable to Interparfums, Inc. |  |  | 1,565 |  |  |  | 1,700 |  |  |  | 2,036 |
Diluted earnings per share attributable to Interparfums, Inc. |  |  | 0.05 |  |  |  | 0.05 |  |  |  | 0.06 |
The following table summarizes stock option activity and related information for the years ended December 31, 2024, 2023 and 2022:
|  | Year ended December 31, |
|  | 2024 |  |  | 2023 |  |  | 2022 |
|  | Options |  |  | Weighted Average Exercise Price |  |  | Options |  |  | Weighted Average Exercise Price |  |  | Options |  |  | Weighted Average Exercise Price |
Shares under option -beginning of year |  |  | 308,970 |  |  | $ | 86.52 |  |  |  | 441,580 |  |  | $ | 67.30 |  |  |  | 524,900 |  |  | $ | 57.58 |
Options granted |  |  | 47,250 |  |  |  | 130.60 |  |  |  | 47,500 |  |  |  | 147.71 |  |  |  | 62,000 |  |  |  | 97.84 |
Options exercised |  |  | (105,510 | ) |  |  | 66.83 |  |  |  | (154,220 | ) |  |  | 52.04 |  |  |  | (136,880 | ) |  |  | 43.86 |
Options forfeited |  |  | (4,280 | ) |  |  | 95.73 |  |  |  | (25,890 | ) |  |  | 76.32 |  |  |  | (8,440 | ) |  |  | 67.65 |
Shares under option - end of year |  |  | 246,430 |  |  |  | 103.24 |  |  |  | 308,970 |  |  |  | 86.52 |  |  |  | 441,580 |  |  |  | 67.30 |
At December 31, 2024, options for 492,395 shares were available for future grant under the plans. The aggregate intrinsic value of options outstanding is $7.8 million as of December 31, 2024 and unrecognized compensation cost related to stock options outstanding aggregated $3.3 million, which will be recognized over the next five years. The weighted average fair values of options granted by Interparfums, Inc. during 2024, 2023 and 2022 were $33.31, $35.08 and $20.36 per share, respectively, on the date of grant using the Black-Scholes option pricing model to calculate the fair value. The assumptions used in the Black-Scholes pricing model are set forth in the following table:
|  | Year Ended December 31, |
|  | 2024 |  |  | 2023 |  |  | 2022 |
Weighted average expected stock-price volatility |  |  | 30 | % |  |  | 29 | % |  |  | 26 | %
Weighted average expected option life |  |  | 4.4 years |  |  |  | 4.0 years |  |  |  | 4.0 years |
Weighted average risk-free interest rate |  |  | 4.4 | % |  |  | 3.8 | % |  |  | 4.0 | %
Weighted average dividend yield |  |  | 2.3 | % |  |  | 2.0 | % |  |  | 2.4 | %
Expected volatility is estimated based on historic volatility of the Company’s common stock. The expected term of the option is estimated based on historic data. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of the grant of the option and the dividend yield reflects the assumption that the dividend payout as authorized by the Board of Directors would maintain its current payout ratio as a percentage of earnings. Proceeds, tax benefits and intrinsic value related to stock options exercised were as follows:
|  | Year Ended December 31, |
|  | 2024 |  |  | 2023 |  |  | 2022 |
Proceeds from stock options exercised |  | $ | 7,049 |  |  | $ | 8,025 |  |  | $ | 6,003 |
Tax benefits |  | $ | 673 |  |  | $ | 1,150 |  |  | $ | 800 |
Intrinsic value of stock options exercised |  | $ | 7,052 |  |  | $ | 11,578 |  |  | $ | 6,760 |
The following table summarizes additional stock option information as of December 31, 2024:
Exercise prices |  | Options outstanding |  | Options outstanding weighted average remaining contractual life |  | Options exercisable
$62.18 - $69.11 |  | 10,500 |  | 0.66 years |  | 9,000
$73.09 |  | 88,580 |  | 1.00 years |  | 88,580
$97.84 |  | 53,600 |  | 4.00 years |  | 20,900
147.71 |  | 46,500 |  | 4.99 years |  | 9,300
$130.60 |  | 47,250 |  | 6.00 years |  | —
Totals |  | 246,430 |  | 3.35 years |  | 127,780
As of December 31, 2024, the weighted average exercise price of options exercisable was $81.91 and the weighted average remaining contractual life of options exercisable is 2 years. The aggregate intrinsic value of options exercisable at December 31, 2024 is $6.6 million. In March 2022, Interparfums SA, our 72% owned French subsidiary, approved a plan to grant an aggregate of 88,400 shares to all Interparfums SA employees and corporate officers having more than six months of employment at grant date, subject to certain corporate performance conditions. The shares, subject to adjustment for stock splits, will be distributed in June 2025. The fair value of the grant had been determined based on the quoted stock price of Interparfums SA shares as reported by the Euronext on the date of grant. The estimated number of shares to be distributed of 104,418 has been determined taking into account employee turnover. The aggregate cost of the grant of approximately $4.1 million will be recognized as compensation cost on a straight-line basis over the requisite three and a quarter year service period. In order to avoid dilution of the Company’s ownership of Interparfums SA, all shares distributed or to be distributed pursuant to these plans will be pre-existing shares of Interparfums SA, purchased in the open market by Interparfums SA. As of December 31, 2024, the Company acquired 96,371 shares at an aggregate cost of $3.9 million. All share purchases and issuances have been classified as equity transactions on the accompanying consolidated balance sheet. Dividends In February 2022, our Board of Directors authorized an annual dividend of $2.00 per share, payable quarterly. In February 2023, our Board of Directors authorized an increase in the annual dividend to $2.50 per share and in February 2024, our Board of Directors increased the annual dividend to $3.00 per share. In February 2025, our Board of Directors further increased the annual dividend to $3.20 per share. The next quarterly cash dividend of $0.80 per share is payable on March 28, 2025 to shareholders of record on March 14, 2025.

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