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STOCK-BASED COMPENSATION
 12 Months Ended
Jun. 30, 2022
Share-based Payment Arrangement [Abstract]  
Share-based Payment Arrangement [Text Block]
STOCK-BASED COMPENSATION
The Company has two primary stock-based compensation programs under which we annually grant stock option, restricted stock unit (RSU) and performance stock unit (PSU) awards to key managers and directors.
In our main long-term incentive program, key managers can elect to receive options or RSUs. All options vest after three years and have a 10-year life. Exercise prices on options are set equal to the market price of the underlying shares on the date of the grant. RSUs vest and settle in shares of common stock three years from the grant date.
Senior-level executives participate in an additional long-term incentive program that awards PSUs, which are paid in shares after the end of a three-year performance period subject to pre-established performance goals. The program includes a Relative Total Shareholder Return (R-TSR) modifier under which the number of shares ultimately granted is also impacted by the Company's actual
shareholder return relative to our consumer products competitive peer set.
In addition to these long-term incentive programs, we award RSUs to the Company's non-employee directors and make other minor stock option and RSU grants to employees for which the terms are not substantially different from our long-term incentive awards.
A total of 150 million shares of common stock were newly authorized for issuance under the stock-based compensation plan approved by shareholders in 2019. A total of 119 million shares remain available for grant under the 2019 plan.
The Company recognizes stock-based compensation expense based on the fair value of the awards at the date of grant. The fair value is amortized on a straight-line basis over the requisite service period. Awards to employees eligible for retirement prior to the award becoming fully vested are recognized as compensation expense from the grant date through the date the employee first becomes eligible to retire
and/or is no longer required to provide services to earn the award. Stock-based compensation expense is included as part of Cost of products sold and SG&A in the Consolidated Statement of Earnings and includes an estimate of forfeitures, which is based on historical data. Total expense and related tax benefit were as follows:
Years ended June 30202220212020
Stock options$271 $279 $249 
RSUs and PSUs257 261 309 
Total stock-based expense$528 $540 $558 
Income tax benefit$88 $102 $97 
We utilize an industry standard lattice-based valuation model to calculate the fair value for stock options granted. Assumptions utilized in the model, which are evaluated and revised to reflect market conditions and experience, were as follows:
Years ended June 30202220212020
Interest rate0.1-1.6 %0.1-0.7 %1.1-1.4 %
Weighted average interest rate1.5 %0.6 %1.3 %
Dividend yield2.4 %2.4 %2.4 %
Expected volatility19 %20 %17 %
Expected life in years9.19.29.2

Lattice-based option valuation models incorporate ranges of assumptions for inputs and those ranges are disclosed in the preceding table. Expected volatilities are based on a combination of historical volatility of our stock and implied volatilities of call options on our stock. We use historical data to estimate option exercise and employee termination patterns within the valuation model. The expected life of options granted is derived from the output of the option valuation model and represents the average period of time that options granted are expected to be outstanding. The interest rate for periods within the contractual life of the options is based on the U.S. Treasury yield curve in effect at the time of grant.
A summary of options outstanding under the plans as of June 30, 2022, and activity during the year then ended is presented below:
OptionsOptions (in thousands)Weighted Average Exercise PriceWeighted Average Contract-ual Life in YearsAggregate Intrinsic Value
Outstanding at July 1, 2021138,272 $91.24 
Granted14,369 141.67 
Exercised(25,040)77.07 
Forfeited/expired(886)116.38 
Outstanding at June 30, 2022126,715 $99.59 5.4$5,618 
Exercisable86,992 $84.89 4.0$5,124 
The following table provides additional information on stock options:
Years ended June 30202220212020
Weighted average grant-date fair value of options granted$21.55 $20.94 $15.60 
Intrinsic value of options exercised1,886 1,401 1,455 
Grant-date fair value of options that vested177 236 217 
Cash received from options exercised1,930 1,705 2,019 
Actual tax benefit from options exercised399 292 298 
At June 30, 2022, $166 of compensation cost had not yet been recognized related to stock option grants. That cost is expected to be recognized over a remaining weighted average period of 1.5 years.
A summary of non-vested RSUs and PSUs outstanding under the plans as of June 30, 2022, and activity during the year then ended is presented below:
RSUsPSUs
RSU and PSU awardsUnits (in thousands)Weighted Average Grant Date Fair ValueUnits (in thousands)Weighted Average Grant Date Fair Value
Non-vested at July 1, 20213,237 $114.68 971 $135.24 
Granted1,365 141.13 539 152.69 
Vested(1,656)109.08 (550)121.62 
Forfeited(114)123.06 (32)152.89 
Non-vested at June 30, 20222,832 $130.37 928 $152.94 
At June 30, 2022, $216 of compensation cost had not yet been recognized related to RSUs and PSUs. That cost is expected to be recognized over a remaining weighted average period of 1.6 years. The total grant date fair value of shares vested was $248, $266 and $264 in 2022, 2021 and 2020, respectively.
The Company settles equity issuances with treasury shares. We have no specific policy to repurchase common shares to mitigate the dilutive impact of options, RSUs and PSUs. However, we have historically made adequate discretionary purchases, based on cash availability, market trends and other factors, to offset the impacts of such activity.