Capital Stock. Each share of Class A common stock and Class B common stock participates equally in dividends. The Class B stock has limited voting rights and as a class has the right to elect 30% of the Board of Directors; the Class A stock has unlimited voting rights, including the right to elect a majority of the Board of Directors.

During 2022, 2021, and 2020 the Company purchased a total of 121,761, 93,969, and 406,112 shares, respectively, of its Class B common stock at a cost of approximately $71.4 million, $55.7 million, and $161.8 million, respectively. On September 10, 2020, the Board of Directors authorized the Company to purchase up to 500,000 shares of its Class B Common Stock. The Company did not announce a ceiling price or time limit for the purchases. At December 31, 2022, the Company had remaining authorization from the Board of Directors to purchase up to 148,421 shares of Class B common stock.

Stock Awards. In 2012, the Company adopted an incentive compensation plan (the 2012 Plan), which, among other provisions, authorizes the awarding of Class B common stock to key employees in the form of stock awards, stock options and other awards involving the issuance of shares. Stock awards made under the 2012 Plan are primarily subject to the general restriction that stock awarded to a participant will be forfeited and revert to Company ownership if the participant’s employment terminates before the end of a specified period of service to the Company. At December 31, 2022, there were 206,323 shares reserved for issuance under the 2012 Plan, which were all subject to stock awards and stock options outstanding.

In 2022, the Company adopted a new incentive compensation plan (the 2022 Plan), which, among other provisions, authorizes the awarding of Class B common stock to key employees and non-employee Directors in the form of stock awards, stock options and other awards involving the issuance of shares. All stock awards, stock options and other awards involving the issuance of shares issued subsequent to the adoption of this plan are covered under this new incentive compensation plan. Stock awards made under the 2022 Plan are primarily subject to the general restriction that stock awarded to a participant will be forfeited and revert to Company ownership if the participant’s employment terminates before the end of a specified period of service to the Company. The number of Class B

For the share awards outstanding at December 31, 2022, the aforementioned restriction is expected to lapse in 2023 for 11,120 shares, 2025 for 14,098 shares and 2027 for 2,000 shares. Also, early in 2023, the Company issued stock awards of 14,630 shares. Stock-based compensation costs resulting from Company stock awards were $3.4 million, $3.9 million and $4.1 million in 2022, 2021 and 2020, respectively.

As of December 31, 2022, there was $4.6 million of total unrecognized compensation expense related to these awards. That cost is expected to be recognized on a straight-line basis over a weighted average period of 1.4 years.

Of the shares covered by options outstanding at the end of 2022, 126,264 are now exercisable; 13,211 are expected to become exercisable in 2023; 12,876 are expected to become exercisable in 2024; 12,877 are expected to become exercisable in 2025; and 12,877 are expected to become exercisable in 2026. For 2022, 2021 and 2020, the Company recorded expense of $1.2 million, $1.7 million and $2.2 million, respectively, related to stock options. Information related to stock options outstanding and exercisable at December 31, 2022, is as follows:


	Options Outstanding			Options Exercisable
Range of Exercise Prices	Shares Outstanding at 12/31/2022	Weighted Average Remaining Contractual Life (years)	Weighted Average Exercise Price	Shares Exercisable at 12/31/2022	Weighted Average Remaining Contractual Life (years)	Weighted Average Exercise Price

$427	74,105	7.7	426.86	22,599	7.7	426.86


719	77,258	1.8	719.15	77,258	1.8	719.15
805–872	26,742	3.0	865.02	26,407	2.9	865.26

	178,105	4.4	619.44	126,264	3.1	697.39

At December 31, 2022, the intrinsic value for all options outstanding, exercisable and unvested was $13.1 million, $4.0 million and $9.1 million, respectively. The intrinsic value of a stock option is the amount by which the market value of the underlying stock exceeds the exercise price of the option. The market value of the Company’s stock was $604.21 at December 31, 2022. At December 31, 2022, there were 51,841 unvested options related to this plan with an average exercise price of $429.57 and a weighted average remaining contractual term of 7.7 years. At December 31, 2021, there were 65,050 unvested options with an average exercise price of $431.16 and a weighted average remaining contractual term of 8.7 years.

As of December 31, 2022, total unrecognized stock-based compensation expense related to stock options was $4.4 million, which is expected to be recognized on a straight-line basis over a weighted average period of approximately 3.7 years. There were 5,084 options exercised during 2022. The total intrinsic value of options exercised during 2022 was $1.2 million; a tax benefit from these option exercises of $0.3 million was realized. There were no options

During 2020, the Company granted 77,258 options at an exercise price above the fair market value of its common stock at the date of grant. The weighted average grant-date fair value of options granted during 2020 was $93.79. No options were granted during 2022 or 2021.

Other Awards. In 2022, the Company granted a stock award to an executive officer that is subject to price-based vesting conditions. The stock award provides the executive officer the right to receive 1,000 shares of the Company’s Class B common stock each time the Company’s closing share price exceeds a certain share price target for a 90 consecutive day period; the award period expires on December 31, 2027. The grant date fair value of the stock award totaled $3.5 million, which was estimated using a Monte Carlo simulation. The grant date fair value is recognized over the derived service period of each tranche. No shares related to this award vested in 2022 and the Company recognized $1.3 million in stock-based compensation expense related to this award in 2022.

The Company also maintains a stock option plan at Kaplan. Under the provisions of this plan, options are issued with an exercise price equal to the estimated fair value of Kaplan’s common stock, and options vest ratably over the number of years specified (generally four to five years) at the time of the grant. Upon exercise, an option holder may receive Kaplan shares or cash equal to the difference between the exercise price and the then fair value.

At December 31, 2022, a Kaplan senior manager holds 7,206 Kaplan restricted shares. The fair value of Kaplan’s common stock is determined by the Company’s compensation committee of the Board of Directors, and in January 2023, the committee set the fair value price at $1,565 per share. No options were awarded during 2022, 2021, or 2020; no options were exercised during 2022, 2021 or 2020; and no options were outstanding at December 31, 2022.

Kaplan recorded stock compensation expense of $1.0 million and $1.3 million in 2022 and 2021, respectively, and a stock compensation credit of $1.1 million in 2020. At December 31, 2022, the Company’s accrual balance related to the Kaplan restricted shares totaled $11.3 million. There were no payouts in 2022, 2021 or 2020.

Earnings Per Share. The Company’s unvested restricted stock awards contain nonforfeitable rights to dividends and, therefore, are considered participating securities for purposes of computing earnings per share pursuant to the two-class method. The diluted earnings per share computed under the two-class method is lower than the diluted earnings per share computed under the treasury stock method, resulting in the presentation of the lower amount in diluted earnings per share. The computation of earnings per share under the two-class method excludes the income attributable to the unvested restricted stock awards from the numerator and excludes the dilutive impact of those underlying shares from the denominator.


	Year Ended December 31
(in thousands, except per share amounts)	2022			2021			2020
Numerator:
Numerator for basic earnings per share:
Net income attributable to Graham Holdings Company common stockholders	$	67,079		$	352,075		$	300,365
Less: Dividends paid–common stock outstanding and unvested restricted shares	(30,712)			(30,136)			(29,970)
Undistributed earnings	36,367			321,939			270,395
Percent allocated to common stockholders	99.43		%	99.36		%	99.45		%
	36,160			319,867			268,917
Add: Dividends paid–common stock outstanding	30,540			29,946			29,812
Numerator for basic earnings per share	66,700			349,813			298,729
Add: Additional undistributed earnings due to dilutive stock options	—			5			4
Numerator for diluted earnings per share	$	66,700		$	349,818		$	298,733
Denominator:
Denominator for basic earnings per share:
Weighted average shares outstanding	4,823			4,951			5,124
Add: Effect of dilutive stock options	13			14			15
Denominator for diluted earnings per share	4,836			4,965			5,139
Graham Holdings Company Common Stockholders:
Basic earnings per share	$	13.83		$	70.65		$	58.30
Diluted earnings per share	$	13.79		$	70.45		$	58.13

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The 2022, 2021 and 2020 diluted earnings per share amounts exclude the effects of 105,000, 104,000 and 181,258 stock options and contingently issuable shares outstanding, respectively, as their inclusion would have been antidilutive due to a market condition.