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Stock Plans
 9 Months Ended
Sep. 30, 2024
Share-Based Payment Arrangement [Abstract]  
Stock Plans Stock Plans
The 2023 Management Equity Incentive Plan provides 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 2024 Non-Employee Directors’ Equity Incentive Plan provides for grants of stock options, restricted stock awards and restricted stock units to non-employee directors through May 2034.
Stock compensation expense, included in Selling, general and administrative expense in the unaudited Condensed Consolidated Statements of Operations, is as follows:
 Three Months Ended September 30,Nine Months Ended September 30,
(In thousands)2024202320242023
Stock compensation expense$4,217 $8,477 $13,446 $21,506 
Income tax benefit1,033 2,077 3,294 5,269 
Stock compensation expense, net of tax$3,184 $6,400 $10,152 $16,237 
We have not capitalized any stock-based compensation expense.
A summary of stock option activity for the nine months ended September 30, 2024, is as follows:
SharesWeighted Average
Exercise Price
Outstanding at January 1, 202426,536 $45.95 
Exercised(10,531)46.95 
Forfeited(852)48.65 
Outstanding and exercisable at September 30, 202415,153 $45.10 
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 activity for the nine months ended September 30, 2024, is as follows:
SharesWeighted Average
Grant Date
Fair Value
Unvested at January 1, 2024173,851 $142.73 
Granted82,905 178.59 
Vested(48,596)164.57 
Forfeited(25,482)164.47 
Unvested at September 30, 2024182,678 $150.16 
Performance stock units that have a market condition modifier are valued at an estimated fair value using a Monte Carlo model. The final number of shares to be issued for performance stock units granted in the first quarter of 2024 may range from 0% to 200% of the target award based on achieving the specified performance targets over the performance period plus an additional modifier based on total shareholder return ("TSR") over the performance period. The following weighted average assumptions were used in estimating the fair value of the performance stock units granted in the first quarter of 2024.
Fair value per unit$181.31
Risk-free interest rate4.34%
Expected dividend yield1.19%
Expected volatility25.9%
MSA stock beta0.728
The risk-free interest rate is based on the U.S. Treasury Constant Maturity rates as of the grant date converted into an implied spot rate yield curve. Expected dividend yield is based on the most recent annualized dividend divided by the one year average closing share price. Expected volatility is based on the three year historical volatility preceding the grant date using daily stock prices. Expected life is based on historical stock option exercise data.
A summary of performance stock unit activity for the nine months ended September 30, 2024, is as follows:
SharesWeighted Average
Grant Date
Fair Value
Unvested at January 1, 2024189,221 $146.17 
Granted40,787 177.34 
Performance adjustments(a)
20,488 194.10 
Vested(77,544)174.13 
Forfeited(10,619)149.13 
Unvested at September 30, 2024162,333 $146.50 
(a)Performance adjustments relate primarily to the final number of shares issued for the 2021 performance unit awards which vested in the first quarter of 2024 at 174% 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.