Stock-Based Compensation

3 Months Ended

Oct. 31, 2020

Share-based Payment Arrangement, Noncash Expense [Abstract]

Stock-Based Compensation

Stock-Based Compensation

In November 2019, the Company’s stockholders approved the adoption of the 2019 Master Stock Incentive Plan (2019 Plan), which replaced the 2010 Master Stock Incentive Plan (2010 Plan). Consistent with the 2010 Plan, the 2019 Plan allows for granting of non-qualified stock options, incentive stock options, restricted stock awards, restricted stock units, stock appreciation rights, dividend equivalents and other stock-based awards.

Stock Options

The exercise price of options granted is equal to the market price of the Company’s common stock at the date of the grant. Options are generally exercisable for up to 10 years from the date of grant and vest in equal increments over three years.

Expenses associated with stock options are as follows (in millions):

	Three Months Ended October 31,
	2020		2019
Pretax compensation expense associated with stock options	$	5.1	$	5.3
Tax benefits associated with stock options	$	0.6	$	1.1

Stock-based employee compensation expense is recognized using the fair value method for all stock option awards. The Company determines the fair value of these awards using the Black-Scholes option pricing model.

Stock option activity during the three months ended October 31, 2020 is as follows:

	Options Outstanding	Weighted Average Exercise Price
Outstanding as of July 31, 2020	6,533,979	$	42.44
Granted	946,100	46.06
Exercised	(269,215)	32.33
Canceled	(10,433)	52.77
Outstanding as of October 31, 2020	7,200,431	$	43.28

Performance-based Awards

Performance-based awards are payable in common stock and are based on a formula that measures Company performance over a three year period. These awards are settled or forfeited after three years with payouts ranging from zero to 200% of the target award value depending on achievement.

Expenses associated with performance-based awards are as follows (in millions):

	Three Months Ended October 31,
	2020		2019
Pretax compensation expense associated with performance-based awards	$	0.9	$	0.9

Performance-based award activity during the three months ended October 31, 2020 is as follows:

	Performance Shares Outstanding	Weighted Average Grant Date Fair Value
Non-vested at July 31, 2020	198,200	$	54.93
Granted	106,100	46.06
Vested	—	—
Canceled/forfeited	—	—
Non-vested at October 31, 2020	304,300	$	51.84