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Share-Based Compensation Plans | 12 Months Ended
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Oct. 31, 2019
Share-based Payment Arrangement [Abstract] |
Share-Based Compensation Plans | SHARE-BASED COMPENSATION PLANS
We use various share-based compensation plans to provide incentives for our key employees and directors. Currently, these incentives primarily consist of RSUs, performance shares, and stock options. On May 2, 2006, our stockholders approved the 2006 Equity Incentive Plan (the “2006 Equity Plan”). The 2006 Equity Plan is an omnibus plan that provides for a variety of equity and equity-based award vehicles, including stock options, stock appreciation rights, RSUs, performance shares, and other share-based awards. Shares subject to awards that terminate without vesting or exercise are available for future awards under the 2006 Equity Plan. Certain of the awards under the 2006 Equity Plan may qualify as “performance-based” compensation under the IRC. As amended, there are 13,475,265 total shares of common stock authorized for issuance under the 2006 Equity Plan, and at October 31, 2019, there were 2,793,556 shares of common stock available for grant for future equity-based compensation awards. In addition, there are certain plans under which we can no longer issue awards, although awards outstanding under these plans may still vest and be exercised. We also maintain an employee stock purchase plan, which our stockholders approved on March 9, 2004 (the “2004 Employee Stock Purchase Plan”). As amended, there are 4,000,000 total shares of common stock authorized for issuance under the 2004 Employee Stock Purchase Plan. Effective May 1, 2006, the 2004 Employee Stock Purchase Plan is no longer considered compensatory and the values of the awards are no longer treated as share-based compensation expense. Additionally, as of that date, the purchase price became 95% of the fair value of our common stock price on the last trading day of the month. Employees may designate up to 10% of their compensation for the purchase of stock, subject to a $25,000 annual limit. Employees are required to hold their shares for a minimum of six months from the date of purchase. At October 31, 2019, there were 705,213 remaining unissued shares under the 2004 Employee Stock Purchase Plan. Compensation Expense by Type of Award and Related Income Tax Benefit
| Years Ended October 31,
(in millions) | 2019 |  | 2018 |  | 2017
RSUs | $ | 9.5 |  |  | $ | 9.3 |  |  | $ | 7.2 |
Performance shares | 8.0 |  |  | 7.7 |  |  | 6.1 |
Share-based compensation expense before income taxes | 17.5 |  |  | 17.0 |  |  | 13.3 |
Income tax benefit | (4.9 | ) |  | (5.1 | ) |  | (5.4 | )
Share-based compensation expense, net of taxes | $ | 12.5 |  |  | $ | 11.8 |  |  | $ | 7.9 |
RSUs and Dividend Equivalent Rights We award RSUs to eligible employees and our directors (each, a “Grantee”) that entitle the Grantee to receive shares of our common stock as the units vest. RSUs granted to eligible employees generally vest with respect to 50% of the underlying award on the second and fourth anniversary of the award. RSUs granted to directors vest over three years. In general, the receipt of RSUs is subject to the Grantee’s continuing employment or service as a director. RSUs are credited with dividend equivalent rights that are converted to RSUs at the fair market value of our common stock on the dates the dividend payments are made and are subject to the same terms and conditions as the underlying award. RSU Activity
| Number of Shares (in millions) |  | Weighted-Average Grant Date Fair Value per Share
Outstanding at October 31, 2018 | 0.8 |  |  | $ | 36.61 |
Granted | 0.3 |  |  | 34.48 |
Vested (including 0.1 shares withheld for income taxes) | (0.3 | ) |  | 33.69 |
Forfeited | (0.1 | ) |  | 36.27 |
Outstanding at October 31, 2019 | 0.7 |  |  | $ | 36.92 |
At October 31, 2019, total unrecognized compensation cost, net of estimated forfeitures, related to RSUs was $16.0 million, which is expected to be recognized ratably over a weighted-average vesting period of 2.4 years. In 2019, 2018, and 2017, the weighted-average grant date fair value per share of awards granted was $34.48, $37.98, and $41.79, respectively. In 2019, 2018, and 2017, the total grant date fair value of RSUs vested and converted to shares of ABM common stock was $10.7 million, $7.4 million, and $9.4 million, respectively. Performance Shares, Including TSR Performance Shares Performance shares consist of a contingent right to receive shares of our common stock based on performance targets adopted by our Compensation Committee. Performance shares are credited with dividend equivalent rights that will be converted to performance shares at the fair market value of our common stock beginning after the performance targets have been satisfied and are subject to the same terms and conditions as the underlying award. For certain performance share awards, the number of performance shares that will vest is based on pre-established internal financial performance targets and typically a three-year service and performance period. The number of TSR awards and TSR-modified awards that will vest over the respective three-year performance period is based on our total shareholder return relative to the S&P 600 Small Cap Index for awards that were granted in 2016, 2017, or 2018, and is based on the S&P 1500 Commercial Services & Supplies Index for awards that were granted in 2019. Vesting of 0% to 150% of the awards originally granted may occur depending on the respective performance metrics under both award types. Performance Share Activity
| Number of Shares (in millions) |  | Weighted-Average Grant Date Fair Value per Share
Outstanding at October 31, 2018 | 0.8 |  |  | $ | 35.96 |
Granted | 0.4 |  |  | 35.44 |
Vested (including 0.1 shares withheld for income taxes) | (0.2 | ) |  | 27.58 |
Performance adjustments | (0.1 | ) |  | 39.69 |
Forfeited | (0.1 | ) |  | 37.38 |
Outstanding at October 31, 2019 | 0.8 |  |  | $ | 38.06 |
At October 31, 2019, total unrecognized compensation cost related to performance share awards was $14.2 million, which is expected to be recognized ratably over a weighted-average vesting period of 1.8 years. Except for TSR performance shares, these costs are based on estimated achievement of performance targets and estimated costs are periodically reevaluated. For our TSR performance shares, these costs are based on the fair value of awards at the grant date and are recognized on a straight-line basis over the service period of three years. In 2019, 2018, and 2017, the weighted-average grant date fair value per share of awards granted was $35.44, $38.53, and $39.21, respectively. In 2019, 2018, and 2017, the total grant date fair value of performance shares vested and converted to shares of ABM common stock was $6.8 million, $7.3 million, and $7.0 million, respectively. In 2019, 2018, and 2017, we used the Monte Carlo simulation valuation technique to estimate the fair value of TSR performance share grants, which used the assumptions in the table below. Monte Carlo Assumptions
| 2019 |  | 2018 |  | 2017
Expected life(1) | 2.81 years |  |  | 2.81 years |  |  | 2.14 years |
Expected stock price volatility(2) | 27.7 | % |  | 21.6 | % |  | 21.4 | %
Risk-free interest rate(3) | 2.5 | % |  | 2.0 | % |  | 1.3 | %
Stock price(4) | $ | 34.92 |  |  | $ | 39.02 |  |  | $ | 40.21 |
(1) The expected life represents the remaining performance period of the awards. (2) The expected volatility for each grant is determined based on the historical volatility of our common stock over a period equal to the remaining term of the performance period from the date of grant for all awards. (3) The risk-free interest rate is based on the continuous compounded yield on U.S. Treasury Constant Maturity Rates with varying remaining terms; the yield is determined over a time period commensurate with the performance period from the grant date. (4) The stock price is the closing price of our common stock on the valuation date. Stock Options Typically, stock options vest and become exercisable at a rate of 25% per year beginning one year after the date of grant. However, terms of stock options can vary, and certain stock options granted on January 10, 2011 vested on the fifth anniversary of the award. We have not granted stock options since 2013. All option grants provide for an option exercise price equal to the closing market value of the common stock on the date of grant. Options typically expire 7 years after the date of grant. Stock Option Activity
| Number of Shares (in millions) |  | Weighted-Average Exercise Price per Share |  | Weighted-Average Remaining Contractual Term (in years)(1) |  | Aggregate Intrinsic Value (in millions)(2)
Outstanding at October 31, 2018 | 0.2 |  |  | $ | 16.09 |  |  |  |  |
Forfeited or expired | — |  |  | 15.94 |  |  |  |  |
Exercised | (0.1 | ) |  | 18.03 |  |  |  |  |
Outstanding at October 31, 2019 | 0.1 |  |  | $ | 14.82 |  |  | 0.9 |  | $ | 2.2 |
Exercisable at October 31, 2019 | — |  |  | $ | 18.85 |  |  | 0.9 |  | $ | 0.5 |
(1) Excludes contractual terms associated with plans prior to the 2006 Equity Plan due to the uncertainty of expiration. (2) Amount by which the current market price of our common stock on October 31, 2019 exceeds the exercise price. At October 31, 2019, we had no unrecognized compensation cost related to stock option grants. For 2019, 2018, and 2017, the total intrinsic value of stock options exercised was $1.4 million, $0.6 million, and $2.6 million, respectively. In 2019 and 2018 no stock options vested. In 2017, the total grant date fair value of stock options vested was $0.2 million. Employee Stock Purchase Plan
| Years Ended October 31,
(in millions, except per share amounts) | 2019 |  | 2018 |  | 2017
Weighted-average fair value of granted purchase rights per share | $ | 1.77 |  |  | $ | 1.70 |  |  | $ | 2.11 |
Common stock issued | 0.1 |  |  | 0.1 |  |  | 0.1 |
Fair value of common stock issued per share | $ | 33.60 |  |  | $ | 32.34 |  |  | $ | 40.07 |
Aggregate purchases | $ | 4.1 |  |  | $ | 4.7 |  |  | $ | 4.7 |

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