The following table summarizes our pre-tax stock-based compensation expense and the related tax benefit recognized in income for the years ended December 31:


(in millions)	2023			2022		2021
Stock options	$	5.3		$	6.5	$	6.5
Restricted stock	6.6			7.0		6.1
Performance units	(2.2)		(1)	21.3		3.1
Stock-based compensation expense	$	9.7		$	34.8	$	15.7
Related tax benefit	$	2.7		$	9.6	$	4.3


Stock Options	Number of Options	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Life (in years)	Aggregate Intrinsic Value (in millions)
Outstanding as of January 1, 2023	2,909,939	$	77.03
Granted	257,780	93.69
Exercised	(129,743)	48.44
Forfeited	(17,053)	93.34
Expired	(5,172)	91.49
Outstanding as of December 31, 2023	3,015,751	79.57		5.7	$	28.7
Exercisable as of December 31, 2023	2,052,968	73.03		4.6	$	28.7

The aggregate intrinsic value of outstanding and exercisable options in the above table represents the total pre-tax intrinsic value that would have been received by the option holders had they exercised all of their options on December 31, 2023. This is calculated as the difference between our closing stock price on December 31, 2023, and the option exercise price, multiplied by the number of in-the-money stock options. The intrinsic value of options exercised during the years ended December 31, 2023, 2022, and 2021 was $5.2 million, $29.2 million, and $12.9 million, respectively. The actual tax benefit from option exercises for the same years was approximately $1.4 million, $8.0 million, and $3.5 million, respectively.

As of December 31, 2023, approximately $1.7 million of unrecognized compensation cost related to unvested and outstanding stock options was expected to be recognized over the next 1.5 years on a weighted-average basis.

During the first quarter of 2024, the Compensation Committee awarded 283,869 non-qualified stock options with a weighted-average exercise price of $85.05 and a weighted-average grant date fair value of $16.20 per option to certain of our officers and other key employees under its normal schedule of awarding long-term incentive compensation.


Restricted Shares	Number of Shares	Weighted-Average Grant Date Fair Value
Outstanding and unvested as of January 1, 2023	89,885	$	94.73
Granted	75,453	93.69
Released	(61,782)	94.75
Forfeited	(3,158)	94.08
Outstanding and unvested as of December 31, 2023	100,398	93.95

The intrinsic value of restricted stock released was $5.8 million, $7.5 million, and $6.5 million for the years ended December 31, 2023, 2022, and 2021, respectively. The actual tax benefit from released restricted shares for the same years was $1.6 million, $2.1 million, and $1.8 million, respectively.

As of December 31, 2023, approximately $2.9 million of unrecognized compensation cost related to unvested and outstanding restricted stock was expected to be recognized over the next 1.7 years on a weighted-average basis.

During the first quarter of 2024, the Compensation Committee awarded 105,778 restricted shares to certain of our directors, officers, and other key employees under its normal schedule of awarding long-term incentive compensation. The grant date fair value of these awards was $85.05 per share.

During 2023, 2022, and 2021, the Compensation Committee awarded 157,035; 171,492; and 152,382 performance units, respectively, to officers and other key employees under the WEC Energy Group Performance Unit Plan.

Performance units with an intrinsic value of $10.2 million, $20.2 million, and $27.7 million were settled during 2023, 2022, and 2021, respectively. The actual tax benefit from the distribution of performance units for the same years was $2.6 million, $5.1 million, and $6.8 million, respectively.

At December 31, 2023, we had 412,448 performance units outstanding, including dividend equivalents. A liability of $10.0 million was recorded on our balance sheet at December 31, 2023 related to these outstanding units. As of December 31, 2023, approximately $12.8 million of unrecognized compensation cost related to unvested and outstanding performance units was expected to be recognized over the next 1.9 years on a weighted-average basis.

During the first quarter of 2024, we settled performance units with an intrinsic value of $1.0 million. The actual tax benefit from the distribution of these awards was $0.2 million. In January 2024, the Compensation Committee also awarded 196,256 performance units to certain of our officers and other key employees under its normal schedule of awarding long-term incentive compensation.

Our ability as a holding company to pay common stock dividends primarily depends on the availability of funds received from our utility subsidiaries, We Power, Bluewater, ATC Holding, and WECI. Various financing arrangements and regulatory requirements impose certain restrictions on the ability of our subsidiaries to transfer funds to us in the form of cash dividends, loans, or advances. All of our utility subsidiaries, with the exception of UMERC and MGU, are prohibited from loaning funds to us, either directly or indirectly.

In accordance with their most recent rate orders, WE, WPS, and WG may not pay common dividends above the test year forecasted amounts reflected in their respective rate cases, if it would cause their average common equity ratio, on a financial basis, to fall

below their authorized level of 53.0%. A return of capital in excess of the test year amount can be paid by each company at the end of the year provided that their respective average common equity ratios do not fall below the authorized level.

WE may not pay common dividends to us under WE's Restated Articles of Incorporation if any dividends on its outstanding preferred stock have not been paid. In addition, pursuant to the terms of WE's 3.60% Serial Preferred Stock, WE's ability to declare common dividends would be limited to 75% or 50% of net income during a 12-month period if its common stock equity to total capitalization, as defined in the preferred stock designation, is less than 25% and 20%, respectively.

NSG's long-term debt obligations contain provisions and covenants restricting the payment of cash dividends and the purchase or redemption of its capital stock.

The long-term debt obligations of UMERC, Bluewater Gas Storage, and ATC Holding contain a provision requiring them to maintain a total funded debt to capitalization ratio of 65% or less.

WECI Wind Holding I's and WECI Wind Holding II's long-term debt obligations contain various conditions that must be met prior to them making any cash distributions. Included in these provisions is a requirement to maintain a debt service coverage ratio of 1.2 or greater for the 12-month period prior to the distribution.

WEC Energy Group has the option to defer interest payments on its 2007 Junior Notes, from time to time, for one or more periods of up to 10 consecutive years per period. During any period in which it defers interest payments, it may not declare or pay any dividends or distributions on, or redeem, repurchase or acquire, its common stock.

As of December 31, 2023, restricted net assets of our consolidated subsidiaries totaled approximately $11.4 billion. Our equity in undistributed earnings of investees accounted for by the equity method was approximately $525 million.

During the years ended December 31, 2023, 2022, and 2021, we instructed our independent agents to purchase shares on the open market to fulfill obligations under various stock-based employee benefit and compensations plans and to provide shares to participants in our dividend reinvestment and stock purchase plan. As a result, no new shares of common stock were issued during these years. As of January 1, 2024, we began issuing new shares of common stock to fulfill our obligations under these plans.

Date Declared

Date Payable

Per Share

Period

January 19, 2023

March 1, 2023

$0.78

First quarter

April 20, 2023

June 1, 2023

$0.78

Second quarter

July 20, 2023

September 1, 2023

$0.78

Third quarter

October 19, 2023

December 1, 2023

$0.78

Fourth quarter

On January 18, 2024, our Board of Directors declared a quarterly cash dividend of $0.835 per share, which equates to an annual dividend of $3.34 per share. The dividend is payable on March 1, 2024, to shareholders of record on February 14, 2024. In addition, the Board of Directors affirmed our dividend policy that continues to target a dividend payout ratio of 65-70% of earnings.