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Equity-Based Compensation
 12 Months Ended
Dec. 31, 2023
Share-Based Payment Arrangement, Disclosure [Abstract]  
Equity-Based Compensation Equity-Based Compensation
Equity-based compensation expense, which is recorded in Selling and administrative expenses in the Consolidated Statements of Operations was as follows:
Year Ended December 31,
202320222021
Equity-based compensation expense$93.7 $91.1 $72.6 
Income tax benefit(1)
(17.3)(15.5)(12.2)
Equity-based compensation expense, net of tax$76.4 $75.6 $60.4 
(1)Represents equity-based compensation tax expense at the statutory tax rates. Excess tax benefits associated with equity awards are excluded from this disclosure and separately disclosed in Note 10 (Income Taxes).
The total unrecognized compensation cost related to non-vested awards was $92 million as of December 31, 2023 and is expected to be recognized over a weighted-average period of 1.8 years.
Long-Term Incentive Plan
During May 2021, the Company adopted the 2021 Long-Term Incentive Plan (“2021 LTIP”), which replaced the former 2013 Long-Term Incentive Plan in connection with the issuance of new equity awards (“2013 LTIP” and, together with the 2021 LTIP, the “LTIPs”). The 2021 LTIP provides for the grant of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, bonus stock and performance awards. The maximum aggregate number of shares of the Company’s common stock that may be issued under the 2021 LTIP is 22.1 million shares. As of December 31, 2023, 6.7 million shares were available for issuance under the 2021 LTIP. Authorized but unissued shares are reserved for issuance in connection with equity-based awards.
Stock Options
The exercise price of a stock option granted is equal to the fair value of the underlying stock on the date of the grant. Stock options granted under the LTIPs have a contractual term of ten years and generally vest ratably over three years. To estimate the fair value of options granted, the Company uses the Black-Scholes option pricing model.
The weighted-average assumptions used to value the stock options granted were as follows:
Year Ended December 31,
202320222021
Weighted average grant date fair value$64.77 $43.20 $40.83 
Expected volatility (1)
29.94 %27.50 %30.00 %
Risk-free rate (2)
3.80 %1.94 %0.93 %
Expected dividend yield1.24 %1.17 %1.03 %
Expected term (in years) (3)
5.56.05.6
(1)Based on a weighting of the historical volatility and implied volatility.
(2)Based on a composite US Treasury rate.
(3)Based on contractual term length and on historical experience of both exercised and unexercised options.
Stock option activity for the year ended December 31, 2023 was as follows:
OptionsNumber of OptionsWeighted-Average Exercise PriceWeighted-Average Remaining Contractual Term (years)Aggregate Intrinsic Value
Outstanding at January 1, 2023
3,499,301 $104.23 
Granted460,767 212.08 
Forfeited/Expired(54,584)179.15 
Exercised(1)
(714,538)69.06 
Outstanding at December 31, 2023
3,190,946 126.40 5.96$322.0 
Vested and exercisable at December 31, 2023
2,185,919 $99.35 4.97$279.7 
Expected to vest after December 31, 2023
993,307 $185.15 8.11$41.9 
(1)The total intrinsic value of stock options exercised during the years ended December 31, 2023, 2022 and 2021 was $97 million, $40 million and $117 million, respectively.
Restricted Stock Units (“RSUs”)
Restricted stock units represent the right to receive unrestricted shares of the Company’s stock at the time of vesting. RSUs granted under the LTIPs vest either ratably over three years or cliff-vest at the end of three years. The fair value of RSUs is equal to the closing price of the Company’s common stock on date of grant.
RSU activity for the year ended December 31, 2023 was as follows:
Number of UnitsWeighted-Average Grant-Date Fair Value
Non-vested at January 1, 2023
432,060 $166.92 
Granted (1)
172,048 189.30 
Vested (2)
(175,795)154.02 
Forfeited(29,700)172.49 
Non-vested at December 31, 2023
398,613 181.85 
(1)The weighted-average grant date fair value of RSUs granted during the years ended December 31, 2023, 2022 and 2021 was $189.30, $169.11 and $172.96, respectively.
(2)The aggregate fair value of RSUs that vested during the years ended December 31, 2023, 2022 and 2021 was $27 million, $16 million and $2 million, respectively.
Performance Share Units (“PSUs”)
Performance share units represent the right to receive unrestricted shares of the Company’s stock at the time of vesting. PSUs granted under the LTIPs cliff-vest at the end of three years. The majority of the PSUs will vest between 0% to 200% of the number of PSUs granted based on the Company’s performance against a cumulative adjusted free
cash flow measure and cumulative non-GAAP net income per diluted share measure over a three-year performance period.
PSU activity for the year ended December 31, 2023 was as follows:
Number of UnitsWeighted-Average Grant-Date Fair Value
Non-vested at January 1, 2023
444,233 $165.11 
Granted (1)
147,425 210.30 
Attainment adjustment (2)
109,462 95.17 
Vested (3)
(275,334)125.60 
Forfeited(30,904)182.82 
Non-vested at December 31, 2023
394,882 188.76 
(1)The weighted-average grant date fair value of PSUs granted during the years ended December 31, 2023, 2022 and 2021 was $210.30, $176.14 and $154.37, respectively.
(2)During the year ended December 31, 2023, the PSUs that vested at December 31, 2022 were adjusted to reflect final attainment.
(3)The aggregate fair value of PSUs that vested during the years ended December 31, 2023, 2022 and 2021 was $35 million, $28 million and $28 million, respectively.