Capital Stock. Each share of Class A common stock and Class B common stock participates equally in dividends. The Class B stock has limited voting rights and as a class has the right to elect 30% of the Board of Directors; the Class A stock has unlimited voting rights, including the right to elect a majority of the Board of Directors.

During 2023, 2022, and 2021 the Company purchased a total of 325,134, 121,761, and 93,969 shares, respectively, of its Class B common stock at a cost of approximately $195.0 million, $71.4 million, and $55.7 million, respectively, including commissions and excise taxes. On May 4, 2023, the Board of Directors authorized the Company to purchase up to 500,000 shares of its Class B Common Stock. This authorization includes shares that remained under the previous authorization. The Company did not announce a ceiling price or time limit for the purchases. At December 31, 2023, the Company had remaining authorization from the Board of Directors to purchase up to 236,403 shares of Class B common stock.

Stock Awards. In 2012, the Company adopted an incentive compensation plan (the 2012 Plan), which, among other provisions, authorizes the awarding of Class B common stock to key employees in the form of stock awards, stock options and other awards involving the issuance of shares. Stock awards made under the 2012 Plan are primarily subject to the general restriction that stock awarded to a participant will be forfeited and revert to Company ownership if the participant’s employment terminates before the end of a specified period of service to the Company. At December 31, 2023, there were 191,474 shares reserved for issuance under the 2012 Plan, which were all subject to stock awards and stock options outstanding.

In 2022, the Company adopted a new incentive compensation plan (the 2022 Plan), which, among other provisions, authorizes the awarding of Class B common stock to key employees and non-employee Directors in the form of stock awards, stock options and other awards involving the issuance of shares. All stock awards, stock options and other awards involving the issuance of shares issued subsequent to the adoption of this plan are covered under this new incentive compensation plan. Stock awards made under the 2022 Plan are primarily subject to the general restriction that stock awarded to a participant will be forfeited and revert to Company ownership if the participant’s employment terminates before the end of a specified period of service to the Company. The number of Class B

common shares authorized for issuance under the 2022 Plan is 500,000 shares. At December 31, 2023, there were 498,924 shares reserved for issuance under the 2022 Plan. Of this number, 14,220 shares were subject to stock awards and 484,704 shares were available for future awards.

For the share awards outstanding at December 31, 2023, the aforementioned restriction is expected to lapse in 2025 for 13,429 shares and 2027 for 16,220 shares. Also, early in 2024, the Company issued stock awards of 1,006 shares. Stock-based compensation costs resulting from Company stock awards were $3.9 million, $3.4 million and $3.9 million in 2023, 2022 and 2021, respectively.

As of December 31, 2023, there was $8.9 million of total unrecognized compensation expense related to these awards. That cost is expected to be recognized on a straight-line basis over a weighted average period of 2.1 years.

Of the shares covered by options outstanding at the end of 2023, 136,415 are now exercisable; 12,876 are expected to become exercisable in 2024; 12,877 are expected to become exercisable in 2025; and 12,877 are expected to become exercisable in 2026. For 2023, 2022 and 2021, the Company recorded expense of $1.2 million, $1.2 million and $1.7 million, respectively, related to stock options. Information related to stock options outstanding and exercisable at December 31, 2023, is as follows:


	Options Outstanding			Options Exercisable
Range of Exercise Prices	Shares Outstanding at 12/31/2023	Weighted Average Remaining Contractual Life (years)	Weighted Average Exercise Price	Shares Exercisable at 12/31/2023	Weighted Average Remaining Contractual Life (years)	Weighted Average Exercise Price

$427	71,045	6.7	426.86	32,415	6.7	426.86


719	77,258	0.8	719.15	77,258	0.8	719.15
805–872	26,742	2.0	865.02	26,742	2.0	865.02

	175,045	3.4	622.80	136,415	2.5	678.29

At December 31, 2023, the intrinsic value for all options outstanding, exercisable and unvested was $19.2 million, $8.7 million and $10.4 million, respectively. The intrinsic value of a stock option is the amount by which the market value of the underlying stock exceeds the exercise price of the option. The market value of the Company’s stock was $696.52 at December 31, 2023. At December 31, 2023, there were 38,630 unvested options related to this plan with an average exercise price of $426.86 and a weighted average remaining contractual term of 6.7 years. At December 31, 2022, there were 51,841 unvested options with an average exercise price of $429.57 and a weighted average remaining contractual term of 7.7 years.

As of December 31, 2023, total unrecognized stock-based compensation expense related to stock options was $3.2 million, which is expected to be recognized on a straight-line basis over a weighted average period of approximately 2.7 years. There were 3,060 options exercised during 2023. The total intrinsic value of options exercised during

2023 was $0.5 million; a tax benefit from these option exercises of $0.1 million was realized. There were 5,084 options exercised during 2022. The total intrinsic value of options exercised during 2022 was $1.2 million; a tax benefit from these option exercises of $0.3 million was realized. There were no options exercised during 2021.

Other Awards. In 2022, the Company granted a stock award to an executive officer that is subject to price-based vesting conditions. The stock award provides the executive officer the right to receive 1,000 shares of the Company’s Class B common stock each time the Company’s closing share price exceeds a certain share price target for a 90 consecutive day period; the award period expires on December 31, 2027. The grant date fair value of the stock award totaled $3.5 million, which was estimated using a Monte Carlo simulation. The grant date fair value is recognized over the derived service period of each tranche. No shares related to this award vested in 2023 or 2022. The Company recognized $1.1 million and $1.3 million in stock-based compensation expense related to this award in 2023 and 2022, respectively.

For the year ended December 31, 2023, the Company recognized expense of $0.4 million related to the issuance and vesting of 731 shares to non-employee Directors under the 2022 Plan. For the year ended December 31, 2022, the Company recognized expense of $0.2 million for 345 shares issued and vested under the same plan.

The Company also maintains a stock option plan at Kaplan. Under the provisions of this plan, options are issued with an exercise price equal to the estimated fair value of Kaplan’s common stock, and options vest ratably over the number of years specified (generally four to five years) at the time of the grant. Upon exercise, an option holder may receive Kaplan shares or cash equal to the difference between the exercise price and the then fair value.

At December 31, 2023, a Kaplan senior manager held 7,206 Kaplan restricted shares. The fair value of Kaplan’s common stock is determined by the Company’s compensation committee of the Board of Directors, and in January 2024, the committee set the fair value price at $1,700 per share. No options were awarded during 2023, 2022, or 2021; no options were exercised during 2023, 2022 or 2021; and no options were outstanding at December 31, 2023.

Kaplan recorded stock compensation expense of $1.0 million, $1.0 million and $1.3 million in 2023, 2022 and 2021, respectively. At December 31, 2023, the Company’s accrual balance related to the Kaplan restricted shares totaled $12.3 million. There were no payouts in 2023, 2022 or 2021.

Earnings Per Share. The Company’s unvested restricted stock awards contain nonforfeitable rights to dividends and, therefore, are considered participating securities for purposes of computing earnings per share pursuant to the two-class method. The diluted earnings per share computed under the two-class method is lower than the diluted earnings per share computed under the treasury stock method, resulting in the presentation of the lower amount in diluted earnings per share. The computation of earnings per share under the two-class method excludes the income attributable to the unvested restricted stock awards from the numerator and excludes the dilutive impact of those underlying shares from the denominator.


	Year Ended December 31
(in thousands, except per share amounts)	2023			2022			2021
Numerator:
Numerator for basic earnings per share:
Net income attributable to Graham Holdings Company common stockholders	$	205,288		$	67,079		$	352,075
Less: Dividends paid–common stock outstanding and unvested restricted shares	(30,953)			(30,712)			(30,136)
Undistributed earnings	174,335			36,367			321,939
Percent allocated to common stockholders	99.34		%	99.43		%	99.36		%
	173,182			36,160			319,867
Add: Dividends paid–common stock outstanding	30,756			30,540			29,946
Numerator for basic earnings per share	203,938			66,700			349,813
Add: Additional undistributed earnings due to dilutive stock options	4			—			5
Numerator for diluted earnings per share	$	203,942		$	66,700		$	349,818
Denominator:
Denominator for basic earnings per share:
Weighted average shares outstanding	4,639			4,823			4,951
Add: Effect of dilutive stock options	15			13			14
Denominator for diluted earnings per share	4,654			4,836			4,965
Graham Holdings Company Common Stockholders:
Basic earnings per share	$	43.96		$	13.83		$	70.65
Diluted earnings per share	$	43.82		$	13.79		$	70.45

____________

The 2023, 2022 and 2021 diluted earnings per share amounts exclude the effects of 105,000, 105,000 and 104,000 stock options and contingently issuable shares outstanding, respectively, as their inclusion would have been antidilutive due to a market condition.