Share-Based Compensation

9 Months Ended

Sep. 30, 2018

Share-based Compensation [Abstract]

Share-Based Compensation

Share-Based Compensation

The Company has historically granted the majority of its share-based awards during the second quarter of each fiscal year. In the nine-month periods ended September 30, 2018 and 2017, the Company awarded 461 and 583 restricted stock units (RSU), respectively, under the Omnibus Incentive Plan (2017 Plan), which was approved by shareholders in 2017. The RSU, awarded to certain employees, were granted at a weighted-average grant date fair value of $69.58 in 2018 and $54.04 in 2017. The RSU vest annually over 3 years based on continued employment and are settled upon vesting in shares of the Company's common stock on a one-for-one basis. The value of an RSU grant is based on the Company's stock price on the date of grant. Additionally, in the second quarter of 2018 and 2017, respectively, 25 and 38 fully vested shares were granted to non-employee directors.

The Company also awarded 18 and 23 performance stock units (PSU) in 2018 and 2017, respectively, under the 2017 Plan. The PSU include performance conditions to be finally measured in 2020 and 2019, respectively. The final number of PSU will be determined using an adjustment factor of up to two times or down to 0.5 of the targeted PSU grant. If the minimum performance thresholds are not achieved, no shares will be issued. Each PSU will convert to one share of the Company's common stock upon vesting.

The grant of employee stock purchase rights and the issuance of shares under the employee stock purchase plan are made in the third quarter of each fiscal year and 666 and 682 were issued in the three and nine-month periods ended September 30, 2018 and 2017. The fair value of the employee stock purchase rights granted was $17.49 and $11.69 per share in 2018 and 2017, respectively.

The Company recognizes stock compensation expense based on the fair value of awards granted to employees and directors under the Company’s omnibus incentive, stock option, director restricted stock and employee stock purchase rights plans. This expense, adjusted for expected forfeitures, is recognized in net earnings on a straight-line basis over the service periods as salaries and related costs. RSU awards to certain employees meeting specific retirement eligibility criteria at the time of grant are expensed immediately, as there is no substantive service period associated with those awards.