Share-Based Payments

12 Months Ended

Dec. 31, 2024

Share-Based Payment Arrangement [Abstract]

We have one share-based compensation plan, the MCBC Incentive Compensation Plan (the "Incentive Compensation Plan"), as of December 31, 2024 and all outstanding awards fall under this plan.

Incentive Compensation Plan

We issue the following types of awards related to shares of Class B common stock to certain directors, officers and other eligible employees, pursuant to the Incentive Compensation Plan: RSUs, DSUs, PSUs and stock options.

RSU awards are issued based upon the market value equal to the price of our Class B common stock at the date of grant and generally vest over a period of three years. During the years ended December 31, 2024, 2023 and 2022, we granted 0.4 million, 0.5 million and 0.5 million RSUs, respectively, with a weighted-average market value of $61.89, $54.97 and $52.05 each, respectively. Prior to vesting, RSUs have no voting rights but participate in dividends.

DSU awards, under the Directors' Stock Plan pursuant to the Incentive Compensation Plan, are granted based on elections made by non-employee directors of MCBC that enable them to receive all or one-half of their annual cash retainer in the form of DSUs or stock. The DSU awards are issued at the market value equal to the price of our stock at the date of the grant. The DSUs are paid in shares of stock upon termination of service. Prior to vesting, DSUs have no voting rights but participate in dividends. During the years ended December 31, 2024, 2023 and 2022, we granted a small number of DSUs.

PSU awards are granted with a target value established at the date of grant and vest upon completion of a service requirement. The settlement amount of the PSUs is determined based on market and performance metrics, which include our total shareholder return performance relative to the stock market index defined by each award and specified internal performance metrics designed to drive greater shareholder return. PSU compensation expense is based on fair values assigned to the market and performance metrics upon grant. For the PSUs granted in 2022 and 2023, the market metric is based upon a Monte Carlo model, with the market metric remaining constant throughout the vesting period of three years while the performance metric is based upon the market value equal to the price of our stock at the date of grant, varying based on a multiplier tied to projected performance metric attainment. Beginning in 2024, we granted PSU awards that had a performance metric with a market metric modifier, for which a fair value was assigned for the award upon grant utilizing a Monte Carlo model and total expense is based on the projected performance metric attainment. During the years ended December 31, 2024, 2023 and 2022, we granted 0.2 million, 0.3 million and 0.3 million PSUs, respectively, each with a weighted-average fair value of $64.83, $62.31 and $62.98, respectively.

Stock options are granted with an exercise price equal to the market value of a share of Class B common stock on the date of grant. Stock options have a term of ten years and generally vest over three years. Beginning in 2024, the pool of recipients for stock options expanded to include additional employees. During the years ended December 31, 2024, 2023 and 2022, we granted 0.8 million, 0.2 million and 0.3 million options, respectively, each with a weighted-average fair value of $16.13, $13.38 and $12.16, respectively.

Beginning with awards granted in 2020, RSU and PSU awards entitle participants to receive dividends earned during the vesting period, subject to the performance, vesting and other conditions, including forfeiture, applicable to the respective awards.

The following table presents the pre-tax and after-tax share-based compensation expense.


	For the years ended
	December 31, 2024		December 31, 2023		December 31, 2022
	(In millions)
Pre-tax share-based compensation expense	$	43.1	$	44.9	$	33.6
Tax benefit	(8.5)		(7.8)		(5.9)
After-tax share-based compensation expense	$	34.6	$	37.1	$	27.7

As of December 31, 2024, there was $58.1 million of total unrecognized compensation cost from all share-based compensation arrangements granted under the Incentive Compensation Plan related to unvested awards. This total compensation expense is expected to be recognized over a weighted-average period of 1.8 years.

The following table presents the activity for RSUs, DSUs and PSUs. PSUs are presented at the target number of shares until vesting or cancellation occurs based on final performance attainment.


	RSUs and DSUs		PSUs
	Units	Weighted-average grant date fair value per unit	Units	Weighted-average grant date fair value per unit
	(In millions, except per unit amounts)
Non-vested as of December 31, 2023	1.3	$51.26	0.9	$56.75
Granted	0.4	$61.89	0.2	$64.83
Vested	(0.4)	$47.01	(0.5)	$48.56
Forfeited	(0.1)	$55.06	—	$61.90
Adjustment for performance results achieved	—	$—	0.2	$54.04
Non-vested as of December 31, 2024	1.2	$56.21	0.8	$63.34

The total intrinsic values of RSUs and DSUs vested during the years ended December 31, 2024, 2023 and 2022 were $26.2 million, $22.0 million and $17.2 million, respectively.

The following table presents the activity for stock options.


	Stock options
	Awards	Weighted- average exercise price per unit	Weighted- average remaining contractual life (years)	Aggregate intrinsic value
	(In millions, except per share amounts and years)
Outstanding as of December 31, 2023	1.5	$57.25	6.1	$	11.7
Granted	0.8	$62.34
Exercised	(0.2)	$52.14
Forfeited	—	$59.49

Outstanding as of December 31, 2024	2.1	$59.39	6.8	$	6.1
Expected to vest as of December 31, 2024	0.9	$60.13	8.8	$	0.9
Exercisable as of December 31, 2024	1.1	$58.64	5.0	$	5.2

The total intrinsic values of exercises during the years ended December 31, 2024, 2023 and 2022 were $2.2 million, $2.2 million and $0.7 million, respectively. Total tax benefits realized, including excess tax benefits, from share-based awards vested or exercised during the years ended December 31, 2024, 2023 and 2022 was $11.3 million, $5.2 million and $2.9 million, respectively.

The shares of Class B common stock to be issued under our equity plans are made available from authorized and unissued MCBC Class B common stock. As of December 31, 2024, there were 2.9 million shares of MCBC Class B common stock available for issuance under the Incentive Compensation Plan.

The fair value of each stock option granted during the years ended December 31, 2024, 2023 and 2022 was determined on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions:


	For the years ended
	December 31, 2024	December 31, 2023	December 31, 2022
Risk-free interest rate	4.09%	4.05%	1.88%
Dividend yield	2.82%	3.04%	2.86%
Volatility range	23.35% - 31.39%	22.62% - 32.04%	30.91% - 33.85%
Weighted-average volatility	28.92%	29.69%	31.65%
Expected term (years)	6.2	5.6	5.7
Weighted-average fair value	$16.13	$13.38	$12.16

The risk-free interest rates utilized for periods throughout the expected term of the stock options are based on a zero-coupon U.S. Department of Treasury security yield at the time of grant. Expected volatility is based on a combination of historical and implied volatility of our stock. The expected term of stock options is estimated based upon observations of historical employee option exercise patterns and trends of those employees granted options in the respective year.

The fair values of each PSU granted during the year ended December 31, 2024 and the fair value of the market metric for each PSU granted during the years ended December 31, 2023 and 2022 were determined on the date of grant using a Monte Carlo model to simulate total stockholder return for MCBC and peer companies with the following weighted-average assumptions.


	For the years ended
	December 31, 2024	December 31, 2023	December 31, 2022
Risk-free interest rate	4.32%	4.42%	1.58%
Volatility range	15.88% - 66.30%	17.19% - 35.87%	22.65% - 45.30%
Weighted-average volatility	25.38%	32.58%	35.93%
Expected term (years)	2.8	2.8	2.8
Weighted-average fair market value	$64.83	$62.31	$62.98

The risk-free interest rates utilized for periods throughout the expected term of the PSUs are based on a zero-coupon U.S. Department of Treasury security yield at the time of grant. Expected volatility is based on historical volatility of our stock as well as the stock of our peer firms, as shown within the volatility range above, for a period from the grant date consistent with the expected term. The expected term of PSUs is calculated based on the grant date to the end of the performance period. No dividend yield is utilized in the model as participants are entitled to dividends earned during the vesting period of each respective award.