Share-Based Compensation

3 Months Ended

Mar. 31, 2020

Share-based Payment Arrangement [Abstract]

SHARE-BASED COMPENSATION

The fair value of options, restricted stock units, deferred stock units, and employee stock purchase rights awarded during the three months ended March 31, 2020, totaled $36.3 million as compared to $34.4 million for the three months ended March 31, 2019. The total unrecognized compensation expense, net of estimated forfeitures, for unvested share-based compensation awards outstanding at March 31, 2020, was $75.1 million, which will be recognized over a weighted average period of approximately 1.9 years. During the three months ended March 31, 2020, we recognized expenses of $7.3 million as compared to $6.3 million for the three months ended March 31, 2019, related to share-based compensation.

We determine the assumptions used in the valuation of option awards as of the date of grant. Differences in the expected stock price volatility, expected term or risk-free interest rate may necessitate distinct valuation assumptions at each grant date. As such, we may use different assumptions for options granted throughout the year. Option awards are granted with an exercise price equal to the closing market price of our common stock at the date of grant. We have never paid any cash dividends on our common stock, and we have no intention to pay such a dividend at this time; therefore, we assume that no dividends will be paid over the expected terms of option awards.

The weighted averages of the valuation assumptions used to determine the fair value of each option award on the date of grant and the weighted average estimated fair values were as follows:



	For the Three Months Ended March 31,
	2020			2019

Share price at grant	$	288.78		$	206.94
Expected stock price volatility	27		%	26		%
Expected term, in years	6.0			6.0
Risk-free interest rate	1.5		%	2.5		%
Weighted average fair value of options granted	$	84.21		$	63.55