Accounting for Stock-Based Compensation

3 Months Ended

Aug. 31, 2023

Accounting for Stock-Based Compensation

Accounting for Stock-Based Compensation

Note 5 – Accounting for Stock-Based Compensation

Restricted Stock

In the three-month period ended August 31, 2023, as part of our annual long-term stock incentive compensation, we granted 81,100 shares of performance-based restricted stock and 87,130 shares of time-based restricted stock to eligible employees. The grant date fair value per share for these shares was $58.27 (the closing price per share of our common stock on the grant date). We also granted 21,834 shares of time-based restricted stock to members of the Board of Directors with a grant date fair value per share of $51.51 (the closing price per share of our common stock on the grant date).

Expense charged to operations for restricted stock during each of the three-month periods ended August 31, 2023 and 2022 was $3.4 million and $3.0 million, respectively.

Stock Options

In July 2023, as part of our annual long-term stock incentive compensation, we granted 141,545 stock options to eligible employees at an exercise price per share of $58.27 and grant date fair value per share of $25.31. The fair value of stock options was estimated using the Black-Scholes option pricing model with the following assumptions:

Risk-free interest rate	4.1	%
Expected volatility of common stock	42.3	%
Dividend yield	0.0	%
Expected option term in years	5.1

The total intrinsic value of stock options exercised during the three-month periods ended August 31, 2023 and 2022 was $7.6 million and $0.9 million, respectively. Expense charged to operations for stock options during the three-month periods ended August 31, 2023 and 2022 was $0.9 million and $1.1 million, respectively.