Accounting for Stock-Based Compensation

9 Months Ended

Feb. 28, 2023

Accounting for Stock-Based Compensation

Accounting for Stock-Based Compensation

Note 5 – Accounting for Stock-Based Compensation

Restricted Stock

In the three-month period ended August 31, 2022, as part of our annual long-term stock incentive compensation, we granted 74,660 shares of performance-based restricted stock and 93,450 shares of time-based restricted stock to eligible employees. The grant date fair value per share for these shares was $41.88 (the closing price per share of our common stock on the grant date). We also granted 28,314 shares of time-based restricted stock to members of the Board of Directors with a grant date fair value per share of $48.56 (the closing price per share of our common stock on the grant date).

Expense charged to operations for restricted stock during each of the three-month periods ended February 28, 2023 and 2022 was $2.6 million and $0.2 million, respectively, and $7.5 million and $2.9 million during the nine-month periods ended February 28, 2023 and 2022, respectively.

Stock Options

In July 2022, as part of our annual long-term stock incentive compensation, we granted 221,900 stock options to eligible employees at an exercise price per share of $41.88 and grant date fair value per share of $17.61. The fair value of stock options was estimated using the Black-Scholes option pricing model with the following assumptions:

Risk-free interest rate	3.1	%
Expected volatility of common stock	42.2	%
Dividend yield	0.0	%
Expected option term in years	5.2

The total intrinsic value of stock options exercised during the nine-month periods ended February 28, 2023 and 2022 was $8.6 million and $4.3 million, respectively. Expense charged to operations for stock options during the three-month periods ended February 28, 2023 and 2022 was $0.9 million and $0.8 million, respectively, and during the nine-month periods ended February 28, 2023 and 2022 was $2.9 million and $2.9 million, respectively.