Stock-Based Compensation

6 Months Ended

Nov. 26, 2023

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation

Stock-Based Compensation

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:

	Six Months Ended
	November 26, 2023			November 27, 2022
Weighted-average fair value	$	55.56		$	36.20
Dividend yield	3.4		%	3.8		%
Expected volatility of stock	42.2		%	42.0		%
Risk-free interest rate	4.0		%	2.8		%
Expected option life (in years)	5.9			5.9
Weighted-average exercise price per share	$	169.02		$	121.47

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:

	Six Months Ended
	November 26, 2023			November 27, 2022
Dividend yield (1)	0.0		%	0.0		%
Expected volatility of stock	32.3		%	55.5		%
Risk-free interest rate	4.5		%	2.9		%
Expected life (in years)	2.9			2.8
Weighted-average grant date fair value per unit	$	217.11		$	137.73

(1)Assumes a reinvestment of dividends.

The following table presents a summary of our stock-based compensation activity for the six months ended November 26, 2023.

(in millions)	Stock Options	Restricted Stock/ Restricted Stock Units	Equity-Settled Performance Stock Units	Cash-Settled Darden Stock Units
Outstanding beginning of period	1.62	0.28	0.36	0.81
Awards granted	0.13	0.06	0.16	0.15
Awards granted performance impact	—	—	—	—
Awards exercised/vested	(0.24)	(0.08)	(0.16)	(0.15)
Awards forfeited	—	—	—	(0.03)
Outstanding end of period	1.51	0.26	0.36	0.78

We recognized expense from stock-based compensation as follows: 

	Three Months Ended				Six Months Ended
(in millions)	November 26, 2023		November 27, 2022		November 26, 2023		November 27, 2022
Stock options	$	0.9	$	1.5	$	5.1	$	4.1
Restricted stock/restricted stock units	1.3		1.8		5.9		4.6
Equity-settled performance stock units	2.1		3.4		12.6		8.9
Cash-settled Darden stock units	7.9		10.3		17.7		18.5
Employee stock purchase plan	0.7		0.7		1.4		1.4
Director compensation program/other	0.5		0.3		1.1		0.9
Total stock-based compensation expense	$	13.4	$	18.0	$	43.8	$	38.4