NJR issues shares out of its 2017 Stock Award and Incentive Plan, in the form of performance share units, restricted stock units, deferred retention stock units and unrestricted common stock to non-employee directors. As of September 30, 2024, 2,620,389 shares remain available for future issuance.


(Thousands)	2024		2023		2022
Stock-based compensation expense:
Performance share awards	$	5,437	$	4,882	$	4,131
Restricted and non-restricted stock	3,958		3,647		3,189
Deferred retention stock	6,633		6,187		7,507
Compensation expense included in operation and maintenance expense	16,028		14,716		14,827
Income tax benefit (1)	(3,898)		(3,563)		(3,624)
Total, net of tax	$	12,130	$	11,153	$	11,203

(1)Excludes additional tax expense related to delivered shares of $1.2M, $0.6M and $0.1M as of September 30, 2024, 2023 and 2022, respectively.

In fiscal 2024, the Company granted to certain officers 54,693 performance shares, which are market condition awards that vest on September 30, 2026, subject to the Company meeting certain conditions. In fiscal 2024, the Company also granted to certain officers 88,107 performance shares, of which 50,504 vest on September 30, 2026, and 37,603 vest annually over a three-year period beginning in September 2024, both of which are subject to the Company meeting certain performance conditions.

In fiscal 2023, the Company granted to certain officers 39,614 performance shares, which are market condition awards that vest on September 30, 2025, subject to the Company meeting certain conditions. In fiscal 2023, the Company also granted to certain officers 73,047 performance shares, of which 42,449 vest on September 30, 2025, and 30,598 vest annually over a three-year period beginning in September 2023, both of which are subject to the Company meeting certain performance conditions.

In fiscal 2022, the Company granted to certain officers 44,965 performance shares, which are market condition awards that vested on September 30, 2024, subject to the Company meeting certain conditions. In fiscal 2022, the Company also granted to certain officers 73,561 performance shares, of which 44,596 vested on September 30, 2024, and 28,965 vest annually over a three-year period beginning in September 2022, both of which were subject to the Company meeting certain performance conditions. The vesting of these awards are shown in the table below.

There is approximately $6.0M of deferred compensation related to unvested performance shares that is expected to be recognized over the weighted average period of 1.7 years.

The following table summarizes the performance share activity under the stock award and incentive plans for the past three fiscal years:


	Shares (1)	Weighted Average Grant Date Fair Value		Total Fair Value of Vested Shares (in Thousands)
Non-vested and outstanding at September 30, 2021	166,091		$36.08		—
Granted	118,526		$38.84		—
Vested (2)	(76,708)		$39.57		$	2,765
Cancelled/forfeited	(15,788)		$37.33		—
Non-vested and outstanding at September 30, 2022	192,121		$36.29		—
Granted	112,661		$46.00		—
Vested (3)	(105,197)		$35.07		$	4,126
Cancelled/forfeited	(9,330)		$38.64		—
Non-vested and outstanding at September 30, 2023	190,255		$42.60		—
Granted	142,800		$42.55		—
Vested (4)	(112,183)		$39.91		$	5,271
Cancelled/forfeited	(1,913)		$43.83		—
Non-vested and outstanding at September 30, 2024	218,959		$43.93		—

(1)The number of common shares issued related to certain performance shares may range from zero to 150% of the number of shares shown in the table above based on the Company’s achievement of performance goals.

(2)As certified by the Company’s Leadership and Compensation Committee on November 9, 2022, the number of common shares earned related to TSR performance was 112% or 30,472 shares, the number of common shares earned related to NFE performance was 105% or 26,282 shares, and the number of common shares earned related to Performance Based Restricted Stock was 100% or 28,965 shares. Each award earned excludes accumulated dividends. The number represented on this line is the target number of 100%.

(3)As certified by the Company’s Leadership and Compensation Committee on November 15, 2023, the number of common shares earned related to TSR performance was 150% or 59,192 shares, the number of common shares earned related to NFE performance was 150% or 55,832 shares, and the number of common shares earned related to Performance Based Restricted Stock was 100% or 30,598 shares. Each award earned excludes accumulated dividends. The number represented on this line is the target number of 100%.

(4)As certified by the Company’s Leadership and Compensation Committee on November 6, 2024, the number of common shares earned related to TSR performance was 150% or 60,092 shares, the number of common shares earned related to NFE performance was 124% or 49,269 shares, and the number of common shares earned related to Performance Based Restricted Stock was 100% or 37,603 shares. Each award earned excludes accumulated dividends. The number represented on this line is the target number of 100%.

The Company measures compensation expense related to performance shares based on the fair value of these awards at their date of grant. In accordance with ASC 718, Compensation - Stock Compensation, compensation expense for market condition grants are recognized for awards granted, and are not adjusted based on actual achievement of the performance goals. The Company estimated the fair value of these grants on the date of grant using a lattice model. Performance condition grants are initially fair valued at the Company’s stock price on the grant date and are subsequently adjusted for actual achievement of the performance goals.

The Company granted 67,522, 64,080 and 54,826 shares of restricted stock during fiscal 2024, 2023 and 2022, respectively. The shares vest annually over a three-year period beginning in October of the fiscal year in which they were granted. On April 25, 2024, the Company also granted an additional 3,465 shares of restricted stock that vest annually over a three-year period beginning in April of the fiscal year in which they were granted. There is approximately $1.7M of deferred compensation related to unvested restricted stock shares that is expected to be recognized over the weighted average period of 1.8 years.

The following table summarizes the restricted stock activity under the stock award and incentive plans for the past three fiscal years:


	Shares	Weighted Average Grant Date Fair Value		Total Fair Value of Vested Shares (in Thousands)
Non-vested and outstanding at September 30, 2021	101,621		$36.87		—
Granted	54,826		$38.84		—
Vested	(47,867)		$39.01		$	1,824
Cancelled/forfeited	(10,756)		$37.06		—
Non-vested and outstanding at September 30, 2022	97,824		$36.90		—
Granted	64,080		$46.00		—
Vested	(48,312)		$40.30		$	1,910
Cancelled/forfeited	(4,716)		$38.77		—
Non-vested and outstanding at September 30, 2023	108,876		$41.55		—
Granted	70,987		$42.59		—
Vested	(53,393)		$39.74		$	2,256
Cancelled/forfeited	(970)		$44.52		—
Non-vested and outstanding at September 30, 2024	125,500		$42.89		—

Deferred retention stock awards are granted upon approval by the Board of Directors, which generally occurs subsequent to the fiscal year end. Deferred retention stock awards vest immediately when granted, with shares delivered at a future date in accordance with the terms of the underlying agreements. The expense for these awards is recognized in the fiscal year in which services are rendered. The following table summarizes the deferred retention stock award under the stock award and incentive plans for the past three fiscal years:


	Shares	Weighted Average Grant Date Fair Value		Total Fair Value of Vested Shares (in Thousands)
Outstanding at September 30, 2021	208,856		$46.28		—
Granted/Vested	192,728		$38.95		—
Delivered	(163,499)		$47.95		$	6,167
Forfeited	(6,818)		$40.33		—
Outstanding at September 30, 2022	231,267		$39.16		—
Granted/Vested	134,941		$45.85		—
Delivered	(38,115)		$40.67		$	1,517

Outstanding at September 30, 2023	328,093		$41.74		—
Granted/Vested	155,188		$42.55		—
Delivered	(5,089)		$35.86		$	213
Forfeited	(235)		$42.55		—
Outstanding at September 30, 2024	477,957		$42.07		—

Non-employee director compensation includes an annual equity retainer that is awarded at the time of the Company’s annual meeting of shareowners. The shares vest upon the earlier of the first anniversary of the grant date or the date of the Company’s next annual meeting of shareowners following the grant date and are amortized to expense over a 12-month period.