Accounting for Stock-Based Compensation

9 Months Ended

Feb. 29, 2024

Accounting for Stock-Based Compensation

Accounting for Stock-Based Compensation

Note 6 – Accounting for Stock-Based Compensation

Restricted Stock

In the three-month period ended August 31, 2023, as part of our annual long-term stock incentive compensation, we granted 81,100 shares of performance-based restricted stock and 87,130 shares of time-based restricted stock to eligible employees. The grant date fair value per share for these shares was $58.27 (the closing price per share of our common stock on the grant date). We also granted 21,834 shares of time-based restricted stock to members of the Board of Directors with a grant date fair value per share of $51.51 (the closing price per share of our common stock on the grant date).

Expenses charged to operations for restricted stock during the three-month periods ended February 29/28, 2024 and 2023 was $2.9 million and $2.6 million, respectively, and during the nine-month periods ended February 29/28, 2024 and 2023 was $9.2 million and $7.5 million, respectively.

Stock Options

In July 2023, as part of our annual long-term stock incentive compensation, we granted 141,545 stock options to eligible employees at an exercise price per share of $58.27 and grant date fair value per share of $25.31. The fair value of stock options was estimated using the Black-Scholes option pricing model with the following assumptions:

Risk-free interest rate	4.1	%
Expected volatility of common stock	42.3	%
Dividend yield	0.0	%
Expected option term in years	5.1

The total intrinsic value of stock options exercised during the nine-month periods ended February 29/28, 2024 and 2023 was $13.9 million and $8.6 million, respectively. Expenses charged to operations for stock options during the three-month periods ended February 29/28, 2024 and 2023 was $0.7 million and $0.9 million, respectively, and during the nine-month periods ended February 29/28, 2024 and 2023 was $2.3 million and $2.9 million, respectively.