Stock-Based Compensation

3 Months Ended

Mar. 31, 2021

Share-based Payment Arrangement [Abstract]

Stock-Based Compensation

Stock-Based Compensation

The Company has a Stock Incentive Plan (the "Plan") which permits the Company’s Board of Directors to grant share based payment awards to employees and directors.

The table below summarizes the expense related to share-based payments recognized in the three months ended March 31 (in thousands):

 

	Three Months Ended March 31,
	2021		2020
Stock options	$	4,590	$	7,020
Restricted stock	13,157		7,155
Stock-based compensation	$	17,747	$	14,175

The tax benefits recorded on stock based compensation were $14.1 million and $17.1 million for the three months ended March 31, 2021 and 2020, respectively.

The following table summarizes the Company’s total unrecognized compensation cost related to stock-based compensation as of March 31, 2021 (cost in thousands):

	Unrecognized Compensation Cost		Weighted Average Period of Expense Recognition (in Years)
Stock options	$	41,503	2.53
Restricted stock	64,380		2.34
Total	$	105,883

Stock Options

Stock options are granted with an exercise price estimated to be equal to the fair market value on the date of grant as authorized by the Company’s Board of Directors. Options granted have vesting provisions ranging from one to five years and vesting of the options is generally based on the passage of time or performance. Stock option grants are subject to forfeiture if employment terminates prior to vesting.

The following summarizes the changes in the number of shares of common stock under option for the three months ended March 31, 2021 (shares/options and aggregate intrinsic value in thousands):

	Shares	Weighted Average Exercise Price		Options Exercisable at End of Period	Weighted Average Exercise Price of Exercisable Options		Weighted Average Fair Value of Options Granted  During the Period		Aggregate Intrinsic Value
Outstanding at December 31, 2020	4,964	$	146.69	3,994	$	130.37			$	626,107
Granted	164	264.85					$	73.15
Exercised	(283)	94.72							49,124
Forfeited	—	—
Outstanding at March 31, 2021	4,845	$	153.72	3,801	$	134.85			$	556,757
Expected to vest as of March 31, 2021	1,044	$	222.43

The aggregate intrinsic value of stock options exercisable at March 31, 2021 was $508.5 million. The weighted average remaining contractual term of options exercisable at March 31, 2021 was 4.7 years.

The fair value of stock option awards granted was estimated using the Black-Scholes option pricing model with the following weighted-average assumptions for grants or modifications during the three months ended March 31, 2021 and 2020:

	March 31,
	2021		2020
Risk-free interest rate	0.35	%	0.41	%
Dividend yield	—		—
Expected volatility	34.66	%	30.29	%
Expected life (in years)	4.0		3.8

Restricted Stock

Awards of restricted stock and restricted stock units are independent of stock option grants and are subject to forfeiture if employment terminates prior to vesting. The vesting of shares granted is generally based on the passage of time, performance or market conditions, or a combination of these. Shares vesting based on the passage of time have vesting provisions of one to four years.

The following table summarizes the changes in the number of shares of restricted stock and restricted stock units for the three months ended March 31, 2021 (shares in thousands):

 

	Shares	Weighted Average Grant Date Fair Value
Outstanding at December 31, 2020	174	$	265.29
Granted	200	272.68
Vested	(29)	267.88
Canceled or forfeited	(23)	288.54
Outstanding at March 31, 2021	322	$	268.02