XML 29 R18.htm IDEA: XBRL DOCUMENT v3.22.2
Share-Based Compensation
 6 Months Ended
Jun. 30, 2022
Share-Based Payment Arrangement [Abstract]  
Share-Based Compensation SHARE-BASED COMPENSATION
The Company’s share-based compensation plans include programs for stock options, restricted stock units ("RSUs"), performance stock units ("PSUs") and deferred compensation. Share-based compensation expense is included in Cost of goods sold and Selling and administrative expenses within the Condensed and Consolidated Statements of Comprehensive Income. The following table summarizes the expenses recognized for the three and six months ended June 30:
Three months endedSix months ended
In millions2022202120222021
Stock options$0.5 $0.4 $3.4 $3.2 
RSUs2.2 2.3 9.5 7.9 
PSUs1.4 2.6 3.0 3.9 
Deferred compensation(2.0)1.0 (3.1)1.4 
Pre-tax expense2.1 6.3 12.8 16.4 
Tax benefit— (0.9)(0.9)(2.0)
After-tax expense$2.1 $5.4 $11.9 $14.4 
Stock Options / RSUs
Eligible participants may receive (i) stock options, (ii) RSUs or (iii) a combination of both stock options and RSUs. Grants issued during the six months ended June 30 were as follows:
 20222021
 Number
granted		Weighted-
average fair
value per award		Number
granted		Weighted-
average fair
value per award
Stock options157,880 $28.59 179,743 $24.99 
RSUs116,055 $115.36 124,762 $111.05 
The average fair value of the stock options granted is determined using the Black-Scholes option-pricing model. The following assumptions were used during the six months ended June 30:
20222021
Dividend yield1.42 %1.32 %
Volatility27.05 %27.14 %
Risk-free rate of return1.89 %0.75 %
Expected life (years)6.06.0
Volatility is based on the Company’s historic volatility. The risk-free rate of return is based on the yield curve of a zero-coupon U.S. Treasury bond on the date the award is granted with a maturity equal to the expected term of the award. The expected life of the Company’s stock option awards is derived from the simplified approach based on the weighted-average time to vest and the remaining contractual term and represents the period of time that awards are expected to be outstanding.
Performance Stock
During the six months ended June 30, 2022, the Company granted PSUs with a maximum award level of approximately 0.1 million shares. In February 2020, 2021 and 2022, the Company’s Compensation Committee granted PSUs that were earned based 50% upon a performance condition, measured at each reporting period by earnings per share ("EPS") performance in relation to pre-established targets set by the Compensation Committee, and 50% upon a market condition, measured by the Company’s relative total shareholder return against the S&P 400 Capital Goods Index over a three-year performance period. The fair values of the market conditions are estimated using a Monte Carlo Simulation approach in a risk-neutral framework to model future stock price movements based upon historical volatility, risk-free rates of return and correlation matrix.
Deferred Compensation
Prior to 2019, the Company allowed key employees to defer a portion of their eligible granted PSUs and/or compensation into a number of investment choices including its ordinary share equivalents. Any amounts invested in ordinary share equivalents will be settled in ordinary shares of the Company at the time of distribution.