Stock-Based Compensation

9 Months Ended

Feb. 27, 2022

Share-based Payment Arrangement [Abstract]

We grant stock options for a fixed number of shares to certain employees with an exercise price equal to the fair value of the shares at the date of grant. We also grant restricted stock, restricted stock units and performance stock units with a fair value generally determined based on our closing stock price on the date of grant. In addition, we grant cash settled stock units (Darden stock units) which are classified as liabilities and are marked to market as of the end of each period.

The weighted-average fair value of non-qualified stock options and the related assumptions used in the Black-Scholes option pricing model for options granted during the periods presented, were as follows:


	Nine Months Ended
	February 27, 2022			February 28, 2021
Weighted-average fair value	$	41.02		$	20.07
Dividend yield	3.2		%	3.0		%
Expected volatility of stock	39.6		%	37.3		%
Risk-free interest rate	0.9		%	0.4		%
Expected option life (in years)	6.3			6.4
Weighted-average exercise price per share	$	148.20		$	78.84

The weighted-average grant date fair value of market-based performance stock units and the related assumptions used in the Monte Carlo simulation to record stock-based compensation for units granted during the periods presented, were as follows:


	Nine Months Ended
	February 27, 2022			February 28, 2021
Dividend yield (1)	0.0		%	0.0		%
Expected volatility of stock	53.4		%	50.5		%
Risk-free interest rate	0.4		%	0.1		%
Expected life (in years)	2.8			2.8
Weighted-average grant date fair value per unit	$	172.34		$	83.46

(1)Assumes a reinvestment of dividends.

The following table presents a summary of our stock-based compensation activity for the nine months ended February 27, 2022.


(in millions)	Stock Options	Restricted Stock/ Restricted Stock Units	Equity-Settled Performance Stock Units	Cash-Settled Darden Stock Units
Outstanding beginning of period	2.15	0.26	0.48	0.80
Awards granted	0.15	0.06	0.09	0.32
Awards exercised/vested	(0.46)	(0.07)	(0.15)	(0.22)
Awards forfeited	(0.01)	—	—	(0.06)
Outstanding end of period	1.83	0.25	0.42	0.84

We recognized expense from stock-based compensation as follows:


	Three Months Ended				Nine Months Ended
(in millions)	February 27, 2022		February 28, 2021		February 27, 2022		February 28, 2021
Stock options	$	1.1	$	2.2	$	5.6	$	6.7
Restricted stock/restricted stock units	1.4		2.1		6.3		7.9
Equity-settled performance stock units	2.6		4.0		13.1		14.7
Cash-settled Darden stock units	5.6		9.4		21.8		27.8
Employee stock purchase plan	0.7		0.6		2.0		1.8
Director compensation program/other	0.3		0.3		1.0		1.1
Total stock-based compensation expense	$	11.7	$	18.6	$	49.8	$	60.0