Stock Plans

12 Months Ended

Dec. 31, 2023

Share-Based Payment Arrangement [Abstract]

The 2023 Management Equity Incentive Plan and its predecessor, the 2016 Management Equity Incentive Plan, provide for various forms of stock-based compensation for eligible employees through May 2033 including stock options, restricted stock awards, restricted stock units and performance stock units. The 2017 Non-Employee Directors’ Equity Incentive Plan provides for grants of stock options and restricted stock to non-employee directors through May 2027. Stock options are granted at market prices and expire after ten years. Stock options are exercisable beginning three years after the grant date. Restricted stock and restricted stock units are granted without payment to the Company and generally vest three years after the grant date. Restricted stock and restricted stock units are valued at the market value of the stock on the grant date. Performance stock units with a market condition are valued at an estimated fair value using a Monte Carlo simulation model. The final number of shares to be issued for performance stock units may range from zero to 240% of the target award based on achieving the specified performance targets over the performance period and further range based upon the achieved market metric over the performance period. In general, unvested stock options, restricted stock and performance stock units are forfeited if the participant’s employment with the Company terminates for any reason other than retirement, death or disability. We issue Treasury shares for stock option exercises and grants of restricted stock and performance stock. Please refer to Note 7—Capital Stock for further information regarding stock compensation share issuance. As of December 31, 2023, there were 1,869,407 and 68,439 shares, respectively, reserved for future grants under the management and non-employee directors’ equity incentive plans.

Stock-based compensation expense was as follows:


(In thousands)	2023		2022		2021
Restricted stock units	$	8,062	$	6,488	$	5,797
Stock options	—		49		81
Performance stock units	21,961		13,113		13,030
Total stock-compensation expense before income taxes	30,023		19,650		18,908
Income tax benefit	7,356		4,814		4,633
Total stock-compensation expense, net of income tax benefit	$	22,667	$	14,836	$	14,275

We did not capitalize any stock-based compensation expense, and all expense is included in Selling, general and administrative expense in the Consolidated Statements of Income.

A summary of option activity follows:


	Shares	Weighted Average Exercise Price		Exercisable at Year-end
Outstanding January 1, 2021	283,998	$	46.23

Exercised	(122,087)	47.25

Forfeited	(210)	43.75
Outstanding December 31, 2021	161,701	45.47		161,347

Exercised	(103,545)	44.91


Outstanding December 31, 2022	58,156	46.48		58,156

Exercised	(31,394)	46.90
Forfeited	(226)	49.44
Outstanding December 31, 2023	26,536	$	45.95	26,536

For various exercise price ranges, characteristics of outstanding and exercisable stock options at December 31, 2023 were as follows:


	Stock Options Outstanding and Exercisable
Range of Exercise Prices	Shares	Weighted-Average
		Exercise Price		Remaining Life

$33.01 – $45.00	17,820	$	44.50	1.66
$45.01 – $57.93	8,716	48.92		1.73
$33.01 – $57.93	26,536	$	45.95	1.68

Cash received from the exercise of stock options was $1.5 million, $4.7 million and $5.8 million for the years ended December 31, 2023, 2022 and 2021, respectively. The tax benefit we realized from these exercises was $0.9 million, $1.9 million and $4.3 million for the years ended December 31, 2023, 2022 and 2021, respectively.

Stock options become exercisable when they are vested. The aggregate intrinsic value of stock options exercisable and outstanding at December 31, 2023 was $3.3 million.

Restricted stock awards and restricted stock units are valued at the market value of the stock on the grant date. A summary of restricted stock unit activity follows:


	Shares	Weighted Average Grant Date Fair Value
Unvested January 1, 2021	146,191	$	105.83
Granted	43,146	167.13
Vested	(65,225)	95.43
Forfeited	(5,769)	132.54
Unvested at December 31, 2021	118,343	132.62
Granted	87,697	130.28
Vested	(51,369)	113.96
Forfeited	(8,785)	139.66
Unvested at December 31, 2022	145,886	137.36
Granted	81,150	142.92
Vested	(43,107)	126.27
Forfeited	(10,078)	140.28
Unvested at December 31, 2023	173,851	$	142.73

A summary of performance stock unit activity follows:


	Shares	Weighted Average Grant Date Fair Value
Unvested at January 1, 2021	200,212	$	104.69
Granted	52,309	175.59
Vested	(64,543)	85.41
Performance adjustments	5,357	88.45

Unvested at December 31, 2021	193,335	129.86
Granted	81,504	142.38
Vested	(55,447)	101.38
Performance adjustments	(22,147)	99.84
Forfeited	(18,485)	147.66
Unvested at December 31, 2022	178,760	146.28
Granted	77,654	132.39
Vested	(53,407)	127.36
Performance adjustments	(3,009)	127.40
Forfeited	(10,777)	147.06
Unvested at December 31, 2023	189,221	$	146.17

The 2023 performance adjustments above relate primarily to 2020 performance unit awards which vested in the first quarter of 2023 at 94.9% of the target award based on both cumulative performance against EBITDA margin and revenue growth targets and MSA's TSR during the three-year performance period.

During the years ended December 31, 2023, 2022 and 2021, the total intrinsic value of stock options exercised (the difference between the market price on the date of exercise and the option price paid to exercise the option) was $3.7 million, $8.6 million and $13.0 million, respectively. The fair values of restricted stock vested during the years ended December 31, 2023, 2022 and 2021 were $5.4 million, $5.9 million and $6.2 million, respectively. The fair value of performance stock units vested during the years ended December 31, 2023, 2022 and 2021 was $6.8 million, $5.6 million and $5.5 million, respectively.

On December 31, 2023, there was $21.1 million of unrecognized stock-based compensation expense. The weighted average period over which this expense is expected to be recognized was approximately 1.7 years.