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Stock Incentive Plans
 12 Months Ended
Jun. 30, 2024
Share-Based Payment Arrangement [Abstract]  
Stock Incentive Plans Stock Incentive Plans
The Company's 2023 Omnibus Stock Incentive Plan ("2023 SIP") provides for the granting of share-based incentive awards in the form of nonqualified stock options, stock appreciation rights ("SARs"), restricted stock units ("RSUs") and restricted and unrestricted stock to officers and key employees of the Company. The aggregate number of shares of common stock authorized for issuance under the 2023 SIP is 11.3 million. At June 30, 2024, 8.5 million common stock shares were available for future issuance. Effective as of October 25, 2023, no further awards may be granted under the Amended and Restated 2016 Omnibus Stock Incentive Plan.
We satisfy share-based incentive award obligations by issuing shares of common stock out of treasury, which have been repurchased pursuant to our share repurchase program described in Note 14, or through the issuance of previously unissued common stock.
SARs - Upon exercise, SARs entitle the participant to receive shares of common stock equal to the increase in value of the award between the grant date and the exercise date. SARs are exercisable from one to three years after the date of grant and expire no more than 10 years after grant.
The fair value of each SAR award granted in 2024, 2023 and 2022 was estimated at the date of grant using a Black-Scholes option pricing model with the following weighted-average assumptions:
202420232022
Risk-free interest rate4.4 %3.0 %0.8 %
Expected life of award5.5 years5.6 years5.6 years
Expected dividend yield of stock1.8 %1.8 %1.9 %
Expected volatility of stock39.0 %37.1 %35.7 %
Weighted-average fair value$146.72 $97.70 $81.71 
The risk-free interest rate was based on U.S. Treasury yields with a term similar to the expected life of the award. The expected life of the award was derived by referring to actual exercise and post-vesting employment termination experience. The expected dividend yield was based on our historical dividend rate and stock price over a period similar to the expected life of the award. The expected volatility of stock was derived by referring to changes in our historical common stock prices over a time-frame similar to the expected life of the award.
SAR activity during 2024 is as follows (aggregate intrinsic value in millions):    
Number of SharesWeighted-Average Exercise PriceWeighted-Average Remaining Contractual TermAggregate Intrinsic Value
Outstanding June 30, 20233,873,429 $199.08 
Granted519,305 $406.18 
Exercised(877,243)$162.31 
Canceled(20,708)$355.27 
Outstanding June 30, 20243,494,783 $238.15 5.96 years$935.4 
Exercisable June 30, 20242,444,988 $189.92 4.89 years$772.3 
A summary of the status and changes of shares subject to SAR awards and the related average price per share follows:
Number of SharesWeighted-Average Grant Date Fair Value
Nonvested June 30, 20231,136,093 $84.36 
Granted519,305 $146.66 
Vested(584,895)$76.14 
Canceled(20,708)$120.19 
Nonvested June 30, 20241,049,795 $119.05 

During 2024, 2023 and 2022, we recognized stock-based compensation expense of $65 million, $51 million and $37 million, respectively, relating to SAR awards. The Company derives a tax deduction measured by the excess of the market value over the grant price at the date stock-based awards are exercised. The related income tax benefit was credited to income tax expense.
At June 30, 2024, $26 million of expense with respect to nonvested SAR awards has yet to be recognized and will be amortized into expense over a weighted-average period of approximately 23 months. The total fair value of shares vested during 2024, 2023 and 2022 was $45 million, $34 million and $29 million, respectively.
Information related to SAR awards exercised during 2024, 2023 and 2022 is as follows:
202420232022
Net cash proceeds$3,606 $3,476 $2,831 
Intrinsic value$269,535 $158,452 $97,002 
Income tax benefit$44,453 $26,854 $15,845 
Number of shares surrendered177,707 152,835 98,673 

RSUs - RSUs constitute an agreement to deliver shares of common stock to the participant at the end of a vesting period. Generally, the RSUs granted to employees vest, and the underlying stock is issued ratably, over a three-year graded vesting period. Nonvested RSUs may not be transferred and do not have dividend or voting rights. For each nonvested RSU, recipients are entitled to receive a dividend equivalent, payable in cash or common shares, equal to the cash dividend per share paid to common shareholders.
The fair value of each RSU award granted in 2024, 2023 and 2022 was based on the fair market value of our common stock on the date of grant. A summary of the status and changes of shares subject to RSU awards for employees and the related average price per share follows:
Number of SharesWeighted-Average Grant Date Fair Value
Nonvested June 30, 2023205,521 $278.88 
Granted84,008 $403.27 
Vested(105,855)$263.14 
Canceled(5,855)$344.65 
Nonvested June 30, 2024177,819 $344.85 
During 2024, 2023 and 2022, we recognized stock-based compensation expense of $30 million, $27 million and $26 million, respectively, relating to RSU awards for employees. At June 30, 2024, $19 million of expense with respect to nonvested RSU awards has yet to be recognized and will be amortized into expense over a weighted-average period of approximately 23 months. The total fair value of RSU awards vested during 2024, 2023 and 2022 was $28 million, $30 million and $26 million, respectively. We recognized an income tax benefit of $3 million, $2 million and $4 million relating to the issuance of common stock for RSU awards that vested during 2024, 2023 and 2022, respectively.
Additionally, we granted RSUs with a one-year vesting period to non-employee members of the Board of Directors. Recipients receive a dividend equivalent payable in common shares, equal to the cash dividend per share paid to common shareholders. A summary of the status and changes of shares subject to Board of Directors RSU awards and the related average price per share follows:
Number of SharesWeighted-Average Grant Date Fair Value
Nonvested June 30, 20236,225 $278.90 
Granted4,658 $367.97 
Vested(6,244)$278.90 
Nonvested June 30, 20244,639 $368.34 
The fair value of each RSU award granted to the Board of Directors in 2024, 2023 and 2022 was based on the fair market value of our common stock on the date of grant. In 2024, 2023 and 2022, we recognized stock-based compensation expense of $1.7 million, $1.9 million and $1.8 million, respectively, relating to these awards. During 2024, 2023 and 2022, we recognized an income tax benefit (cost) of $0.1 million, $(0.02) million and $0.2 million, respectively, related to the vesting of Board of Directors RSU awards. At June 30, 2024, $0.4 million of expense with respect to nonvested RSU awards granted to the Board of Directors has yet to be recognized and will be amortized into expense over a weighted-average period of approximately three months.
LTIP - The Company's Long Term Incentive Plans ("LTIP") provide for the issuance of unrestricted stock to certain officers and key employees based on the attainment of certain goals relating to our revenue growth, earnings per share growth and return on invested capital during the three-year performance period.
Stock issued and surrendered for LTIP202420232022
LTIP three-year plan2021-22-232020-21-222019-20-21
Number of shares issued122,837 204,175 251,783 
Number of shares surrendered64,340 102,120 124,007 
Share value on date of issuance$546.26 $311.65 $271.38 
Total value of shares issued$67,102 $63,631 $68,329 
Under the Company's 2022-23-24 LTIP, a payout of unrestricted stock will be issued in April 2025.
The fair value of each LTIP award granted in 2024, 2023 and 2022 was based on the fair market value of our common stock on the date of grant. These nonvested LTIP awards entitle participants to earn a dividend equivalent unit, payable in common shares, equal to the cash dividend per share paid to common shareholders. These dividend equivalent units do not have dividend or voting rights and are subject to the same performance goals as the initial award granted. A summary of shares relating to the LTIP and the related average price per share follows:    
Number of SharesWeighted-Average Grant Date Fair Value
Nonvested June 30, 2023392,607 $292.32 
Granted149,988 $380.97 
Vested(187,177)$249.97 
Canceled(7,841)$329.54 
Nonvested June 30, 2024347,577 $350.75 
During 2024, 2023 and 2022, we recorded stock-based compensation expense of $59 million, $63 million and $72 million, respectively, relating to the LTIP. During 2024, 2023 and 2022, we recognized an income tax benefit of $5 million, $4 million and $5 million, respectively, relating to the LTIP.