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Stock-Based Compensation
 12 Months Ended
Sep. 30, 2020
Share-based Payment Arrangement, Noncash Expense [Abstract]  
Stock-Based Compensation Stock-Based Compensation
The Company’s stock-based compensation plans consist of the Amended and Restated Annual Incentive Compensation Plan (the “AIP”), the 2002 Universal Stock Incentive Plan, as amended and restated (the “USIP”) and the amended and restated Franklin Resources, Inc. 1998 Employee Stock Investment Plan (the “ESIP”). In connection with the acquisition of Legg Mason, the Company assumed the Legg Mason 2017 Equity Incentive Plan, which was amended and restated as the Amended and Restated Franklin Resources, Inc. 2017 Equity Incentive Plan (the “EIP”). The Compensation Committee of the Board of Directors determines the terms and conditions of awards under the AIP, the USIP, the ESIP and the EIP.
Stock-based compensation expenses were as follows:
(in millions)
 
 
 
 
 
 
for the fiscal years ended September 30,
 
2020
 
2019
 
2018
Stock and stock unit awards
 
$
117.1

 
$
105.7

 
$
111.6

Employee stock investment plan
 
5.2

 
5.8

 
6.2

Total
 
$
122.3

 
$
111.5

 
$
117.8


Stock and Stock Unit Awards
Under the terms of the AIP, eligible employees may receive cash, equity awards and/or mutual fund unit awards generally based on the performance of the Company and/or its funds, and the individual employee. The USIP and EIP provide for the issuance of the Company’s common stock for various stock-related awards to officers, directors and employees. There are 120.0 million shares authorized under the USIP and 23.0 million shares authorized under the EIP, of which 4.5 million shares and 18.3 million shares were available for grant at September 30, 2020.
Stock awards entitle holders to the right to sell the underlying shares of the Company’s common stock once the awards vest. Stock unit awards entitle holders to receive the underlying shares of common stock once the awards vest. Awards vest based on the passage of time or the achievement of predetermined Company financial performance goals.
Stock and stock unit award activity was as follows:
(shares in thousands)
 
Time-Based
Shares
 
Performance-
Based Shares
 
Total
Shares
 
Weighted-Average
Grant-Date
Fair Value
for the fiscal year ended September 30, 2020
 
 
 
 
Nonvested balance at September 30, 2019
 
3,778

 
1,854

 
5,632

 
$
34.06

Granted
 
11,540

 
3,891

 
15,431

 
23.05

Vested
 
(2,798
)
 
(374
)
 
(3,172
)
 
32.89

Forfeited/canceled
 
(379
)
 
(563
)
 
(942
)
 
33.26

Nonvested balance at September 30, 2020
 
12,141

 
4,808

 
16,949

 
$
24.30


Total unrecognized compensation expense related to nonvested stock and stock unit awards was $338.2 million at September 30, 2020. This expense is expected to be recognized over a remaining weighted-average vesting period of 3.1 years. The weighted-average grant-date fair values of stock awards and stock unit awards granted during fiscal years 2020, 2019 and 2018 were $23.05, $30.75 and $42.63 per share. The total fair value of stock and stock unit awards vested during the same periods was $72.2 million, $84.2 million and $91.5 million.
The Company generally does not repurchase shares upon vesting of stock and stock unit awards. However, in order to pay taxes due in connection with the vesting of employee and executive officer stock and stock unit awards, shares are repurchased using a net stock issuance method.
Employee Stock Investment Plan
The ESIP allows eligible participants to buy shares of the Company’s common stock at a discount of its market value on defined dates. A total of 1.0 million shares were issued under the ESIP during fiscal year 2020, and 5.9 million shares were reserved for future issuance at September 30, 2020.