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Stock-based Compensation
 12 Months Ended
Dec. 31, 2023
Share-Based Payment Arrangement [Abstract]  
Stock-based Compensation Stock-based Compensation
On December 23, 2019, the Board approved the Beacon Roofing Supply, Inc. Second Amended and Restated 2014 Stock Plan (the “2014 Plan”). On February 11, 2020, the stockholders of the Company approved an additional 4,850,000 shares to be reserved for issuance under the 2014 Plan. The 2014 Plan, which was originally approved by the stockholders on February 12, 2014, provides for discretionary awards of stock options, stock awards, restricted stock units, and stock appreciation rights to selected employees and non-employee directors. The 2014 Plan mandates that all shares underlying lapsed, forfeited, expired, terminated, cancelled and withheld awards, including those from the predecessor plan, be returned to the 2014 Plan and made available for issuance. As of December 31, 2023, there were 3,301,997 shares of common stock available for issuance pursuant to the 2014 Plan. The 2014 Plan is the only plan maintained by the Company pursuant to which equity awards are granted.
All unvested employee equity awards contain a “double trigger” change in control mechanism to the extent such employee equity award is continued or assumed after a change in control. If an award is not continued or assumed by a public company in an equitable manner, such award shall become vested immediately prior to a change in control (in the case of a restricted stock unit award with performance conditions at the then-calculable payout percentage for any completed annual performance periods and at 100% for any annual performance periods not yet calculable, and in the case of a restricted stock unit award with market performance conditions at 100% of the award then earned but not then vested). If an award is so continued or assumed, vesting will continue in accordance with the terms of the award, unless there is a qualifying termination (without cause or for good reason) within one year following the change in control, in which event the award shall immediately become vested (in the case of a restricted stock unit award with performance conditions at the then-calculable payout percentage for any completed annual performance periods and at 100% for any annual performance periods not yet calculable, and in the case of a restricted stock unit award with market performance conditions at 100% of the award then earned but not then vested).
Stock Options
Non-qualified stock options generally expire 10 years after the grant date and, except under certain conditions, the options are subject to continued employment and vest in three annual installments over the three-year period following the grant date.
The fair values of the options granted for the periods presented were estimated on the dates of grants using the Black-Scholes option-pricing model with the following weighted-average assumptions:
 Year Ended December 31,Year Ended September 30,
 202320222021
Risk-free interest rate 4.26 %1.93 %0.44 %
Expected volatility 49.92 %48.89 %48.15 %
Expected life (in years)5.125.145.36
Dividend yield — — — 
Due to the Company’s change in its fiscal year end, the Company did not make annual grants to employees during the three months ended December 31, 2021.
The following table summarizes all stock option activity for the year ended December 31, 2023 (in millions, except per share amounts and time periods):
 
Options
Outstanding
Weighted- Average Exercise PriceWeighted- Average Remaining Contractual Term (Years)
Aggregate
Intrinsic
Value1
Balance as of December 31, 20221.3$38.73 6.0$20.7 
Granted0.1$65.00 
Exercised(0.3)$37.91 
Canceled/Forfeited(0.0)$50.79 
Expired(0.0)$36.19 
Balance as of December 31, 20231.1$41.38 5.8$51.3 
Vested and expected to vest after December 31, 20231.1$40.81 5.8$51.0 
Exercisable as of December 31, 20230.9$35.94 5.1$45.3 
1.Aggregate intrinsic value represents the difference between the closing fair value of the underlying common stock and the exercise price of outstanding, in-the-money options on the date of measurement.
During the years ended December 31, 2023 and 2022, three months ended December 31, 2021, and year ended September 30, 2021, the Company recorded stock-based compensation expense related to stock options of $3.8 million, $3.9 million, $0.6 million, and $4.4 million, respectively. As of December 31, 2023, there was $3.8 million of total unrecognized compensation cost related to unvested stock options, which is expected to be recognized over a weighted-average period of 1.7 years.
The following table summarizes additional information on stock options for the periods presented (in millions, except per share amounts):
 Year Ended December 31,Three Months Ended December 31,Year Ended September 30,
 2023202220212021
Weighted-average fair value per share of stock options granted$31.86 $26.50 $— $15.62 
Total grant date fair value of stock options vested$3.2 $2.7 $3.7 $5.6 
Total intrinsic value of stock options exercised$10.9 $11.5 $4.1 $15.7 
Restricted Stock Units
Time-based RSU awards granted to employees are subject to continued employment and generally vest on the third anniversary of the grant date. The Company also grants certain RSU awards to management that additionally may contain market or performance conditions. Market conditions are incorporated into the grant date fair value of the management awards with market conditions using a Monte Carlo valuation model. Compensation expense for management awards with market conditions is recognized over the service period and is not reversed if the market condition is not met. For awards with performance conditions, the actual number of awards that will vest can range from 0% to 200% of the original grant amount, depending upon actual Company performance below or above the established performance metric targets. At each reporting date, the Company estimates performance in relation to the defined targets when determining the projected number of management awards with performance conditions that are expected to vest and calculating the related stock-based compensation expense. Management awards with performance conditions are amortized over the service period if, and to the extent that, it is determined that achievement of the performance condition is probable. If awards with market, performance and/or service conditions are forfeited due to failure to achieve performance conditions or failure to satisfy service conditions, any previously recognized expense for such awards is reversed.
RSUs granted to non-employee directors are subject to continued service and vest on the first anniversary of the grant date (except under certain conditions). Generally, the common shares underlying the RSUs are not eligible for distribution until the non-employee director’s service on the Board has terminated, and for non-employee director RSU grants made prior to fiscal year 2014, the share distribution date is six months after the director’s termination of service on the Board. Any non-employee directors who have Beacon
equity holdings (defined as common stock and outstanding vested equity awards) with a total fair value that is greater than or equal to five times the annual Board cash retainer may elect to have any future RSU grants settle simultaneously with vesting.
The following table summarizes all RSU activity for the year ended December 31, 2023 (in millions, except grant date fair value amounts):
 
RSUs
Outstanding
Weighted-Average Grant Date Fair Value
Balance as of December 31, 20221.2$45.60 
Granted0.4$62.84 
Performance awards1
0.1$35.78 
Released1
(0.4)$39.77 
Canceled/Forfeited(0.1)$51.85 
Balance as of December 31, 20231.2$53.14 
Vested and expected to vest after December 31, 20232
1.2$52.95 
1.Includes additional restricted stock units that vested and were released as a result of the satisfaction of a performance vesting condition.
2.As of December 31, 2023, outstanding awards with performance conditions were expected to vest at greater than 100% of their original grant amount.
During the years ended December 31, 2023 and 2022, three months ended December 31, 2021, and year ended September 30, 2021, the Company recorded stock-based compensation expense related to RSUs of $23.0 million, $23.7 million, $2.2 million, and $14.0 million, respectively. During the years ended December 31, 2023 and 2022, three months ended December 31, 2021, and year ended September 30, 2021, the Company recognized a tax benefit related to stock-based compensation expense of $6.2 million, $3.3 million, $2.4 million, and $1.2 million, respectively.
As of December 31, 2023, there was $28.3 million of total unrecognized compensation expense related to unvested RSUs (including unrecognized expense for RSUs with performance conditions at their estimated value as of December 31, 2023), which is expected to be recognized over a weighted-average period of 1.9 years.
The following table summarizes additional information regarding RSUs (in millions, except per share amounts):
 Year Ended December 31,Three Months Ended December 31,Year Ended September 30,
 2023202220212021
Weighted-average fair value per share of RSUs granted$62.84 $50.63 $52.43 $38.18 
Total grant date fair value of RSUs vested$20.1 $9.6 $7.0 $16.5 
Total intrinsic value of RSUs released$38.6 $17.4 $14.5 $15.2 
Employee Stock Purchase Plan
On March 20, 2023, the Board adopted the Company’s 2023 Employee Stock Purchase Plan (the “ESPP”), subject to stockholder approval, which was subsequently obtained on May 17, 2023 in conjunction with the 2023 Annual Meeting of Stockholders. The ESPP allows eligible employees to acquire shares of the Company’s common stock through payroll deductions over six-month offering periods. The purchase price per share is equal to 85% of the lesser of (1) the fair market value of a share of the Company’s common stock on the offering date, defined as the first trading day of the offering period, or (2) the fair market value of a share of the Company’s common stock on the purchase date, defined as the last trading day of the offering period; provided that the purchase price is not less than the $0.01 par value per share of the common stock. Participant purchases are limited to a maximum of $12,500 worth of stock per offering period (or $25,000 per calendar year). The Company is authorized to grant up to 1,000,000 shares of its common stock under the ESPP.
The first offering period commenced on July 1, 2023 and ended on December 31, 2023. As of December 31, 2023, the Company has not issued any shares of common stock (shares of common stock for the first offering period were issued in January 2024). During the year ended December 31, 2023, the Company recorded stock-based compensation expense related to the ESPP of $1.2 million.