STOCK-BASED COMPENSATION AND INCENTIVE PERFORMANCE PLANS

6 Months Ended

Dec. 31, 2023

Share-Based Payment Arrangement [Abstract]

STOCK-BASED COMPENSATION AND INCENTIVE PERFORMANCE PLANS

Under the Company’s Amended and Restated 2002 Long-Term Incentive and Stock Award Plan (the “2002 Plan”), the Company historically granted equity-based awards to its officers, senior management, other key employees, consultants, and directors. The Company currently utilizes a stockholder-approved plan, The Hain Celestial Group, Inc. 2022 Long Term Incentive and Stock Award Plan (the “2022 Plan”) which was approved at the Company’s 2022 Annual Meeting of Stockholders held on November 17, 2022. The 2022 Plan permits the Company to continue making equity-based and other incentive awards in a manner intended to properly incentivize its employees, directors, consultants and other service providers by aligning their interests with the interests of the Company’s stockholders. The Company also historically granted shares under its 2019 Equity Inducement Award Program (the “2019 Inducement Program”) to induce selected individuals to become employees of the Company. The 2002 Plan, the 2022 Plan and the 2019 Inducement Program are collectively referred to as the “Stock Award Plans.” In conjunction with the Stock Award Plans, the Company maintains a long-term incentive program (the “LTI Program” or “LTIP”) that provides for equity awards, including performance and market-based equity awards that can be earned over defined performance periods. The Company’s LTIP plans, with the exception of the 2023 - 2025 LTIP described below, are described in Note 13, Stock-Based Compensation and Incentive Performance Plans, in the Notes to the Consolidated Financial Statements in the Form 10-K.

Compensation cost and related income tax benefits recognized in the Consolidated Statements of Operations for stock-based compensation plans were as follows:


	Three Months Ended December 31,				Six Months Ended December 31,
	2023		2022		2023		2022
Selling, general and administrative expenses	$	3,376	$	3,435	$	7,118	$	7,429



Related income tax benefit	$	398	$	552	$	854	$	954

Restricted Stock

Awards of restricted stock are either restricted stock awards (“RSAs”) or restricted stock units (“RSUs”) that are issued at no cost to the recipient. Performance-based or market-based RSUs are issued in the form of performance share units (“PSUs”). A summary of the restricted stock activity (including all RSAs, RSUs and PSUs) for the six months ended December 31, 2023 is as follows:


	Number of Shares and Units	Weighted Average Grant Date Fair Value (per share)
Non-vested RSAs, RSUs and PSUs outstanding at June 30, 2023	1,288	$	26.37
Granted	1,562	$	12.34
Vested	(479)	$	28.67
Forfeited	(114)	$	25.85
Non-vested RSAs, RSUs and PSUs outstanding at December 31, 2023	2,257	$	15.79

Shares granted during the six months ended December 31, 2023 related to shares of RSUs and PSUs granted under the 2024 - 2026 LTIP. Vested shares during the six months ended December 31, 2023 include a total of 15 shares related to certain performance-based metrics being met and a total of 463 shares related to service-based RSUs. There are market-based PSU awards outstanding under 2024 - 2026 LTIP, 2023 – 2025 LTIP and the 2022 – 2024 LTIP. At December 31, 2023, 576 of such shares were outstanding under the 2024 – 2026 LTIP, 276 of such shares were outstanding under the 2023 – 2025 LTIP while 51 shares were outstanding under the 2022 – 2024 LTIP.

The fair value of RSAs, RSUs and PSUs granted and of shares vested, and the tax benefit recognized from restricted shares vesting was as follows:


	Six Months Ended December 31,
	2023		2022
Fair value of RSAs, RSUs and PSUs granted	$	19,286	$	21,457
Fair value of shares vested	$	5,081	$	3,317
Tax benefit recognized from restricted shares vesting	$	650	$	502

At December 31, 2023, there was $27,305 of unrecognized stock-based compensation expense related to non-vested restricted stock awards which is expected to be recognized over a weighted average period of 2.3 years.

2024-2026 LTIP

During the six months ended December 31, 2023, the Company granted market-based PSU awards under the LTIP with a total target payout of 578 shares of common stock. At December 31, 2023, there were 576 such shares outstanding under the LTIP. Such PSU awards will vest, if at all, pursuant to a defined calculation of either relative TSR or absolute TSR (as defined) over the period from October 25, 2023 through the earlier of (i) October 25, 2026; (ii) the date the participant’s employment is terminated due to death or Disability (as defined); or (iii) the effective date of a Change in Control (as defined) (the “2024 TSR Performance Period”). Vesting of 384 target shares of the outstanding PSU awards is pursuant to a defined calculation of relative TSR over the 2024 TSR Performance Period (the “2024 Relative TSR PSUs”). Vesting of 192 target shares of the outstanding PSU awards is pursuant to the achievement of pre-established three-year compound annual TSR targets over the 2024 TSR Performance Period (the “2024 Absolute TSR PSUs”). Total shares eligible to vest for both the 2024 Relative TSR PSUs and 2024 Absolute TSR PSUs range from zero to 200% of the target amount. Grant date fair values are calculated using a Monte Carlo simulation model with grant date fair values per target share and related valuation assumptions as follows:


	Absolute TSR PSUs		Relative TSR PSUs
Grant date fair value (per target share)	$12.23		$15.42
Risk-free interest rate	4.98	%	4.98	%
Expected dividend yield	—		—
Expected volatility	33.70	%	23.10	%
Expected term	3.00 years		3.00 years

CEO Succession

On November 22, 2022, the Board approved a succession plan pursuant to which Mark L. Schiller transitioned from his position as President and Chief Executive Officer of the Company effective as of December 31, 2022 (the “Transition Date”). As of the Transition Date, certain of Mr. Schiller's stock-based compensation awards were modified and others were forfeited. Additionally, Mr. Schiller will receive severance totaling $4,725, paid in installments over a two-year period following the Transition Date. Severance, including payroll taxes and other costs, was recognized during the three and six months ended December 31, 2022.