STOCK-BASED COMPENSATION

3 Months Ended

Mar. 31, 2022

Share-based Payment Arrangement [Abstract]

The following table recaps the impact of stock-based compensation on the results of operations for each of the periods presented:


	Three Months Ended March 31, 2022				Three Months Ended March 31, 2021
	To be settled with stock		To be settled in cash		To be settled with stock		To be settled in cash


Executive Stock Unit (ESU) program contributions	$	1.2	$	.2	$	1.4	$	.1
Discounts on various stock awards:
Deferred Stock Compensation Program	.4		—		.4		—
ESU program	.4		—		.3		—
Discount Stock Plan	.2		—		.2		—
Performance Stock Unit (PSU) awards: 1
PSU - TSR based 1A	.6		—		.8		.3
PSU - EBIT CAGR based 1B	.4		(.2)		1.7		2.2

Restricted Stock Unit (RSU) awards	6.7		—		5.3		—

Other, primarily non-employee directors restricted stock	.5		—		—		—
Total stock-related compensation expense	10.4		$	—	10.1		$	2.6
Employee contributions for above stock plans	2.5				2.3
Total stock-based compensation	$	12.9			$	12.4

Tax benefits on stock-based compensation expense	$	2.6			$	2.5
Tax benefits on stock-based compensation payments	.6				2.6
Total tax benefits associated with stock-based compensation	$	3.2			$	5.1

1 PSU Awards

For the following programs, we intend to pay 50% in shares of our common stock and 50% in cash, although we reserve the right, subject to Compensation Committee approval, to pay up to 100% in cash. Cash settlements are recorded as a liability and adjusted to fair value at each reporting period.

1A PSU - TSR based

PSU awards are based 50% upon our TSR compared to a peer group. A small number of PSU awards are based 100% upon relative TSR for certain business unit employees to complement their particular mix of incentive compensation. Grant date fair values are calculated using a Monte Carlo simulation of stock and volatility data for Leggett and each of the peer companies. Grant date fair values are amortized using the straight-line method over the three-year vesting period.

The relative TSR component of the PSU awards contain the following conditions:

•A service requirement—Awards generally “cliff” vest three years following the grant date; and

•A market condition—Awards are based on our TSR as compared to the TSR of a group of peer companies. The peer group consists of all the companies in the Industrial, Materials, and Consumer Discretionary sectors of the S&P 500 and S&P Midcap 400 (approximately 300 companies). Participants will earn from 0% to 200% of the base award depending upon how our TSR ranks within the peer group at the end of the three-year performance period.

1B PSU - EBIT CAGR based

PSU awards are based 50% upon our, or the applicable segment's, EBIT CAGR. Grant date fair values are calculated using the grant date stock price discounted for dividends over the vesting period. Expense is adjusted every quarter over the three-year vesting period based on the number of shares expected to vest.

The EBIT CAGR component of the PSU awards contain the following conditions:

•A service requirement—Awards generally “cliff” vest three years following the grant date; and

•A performance condition—Awards are based on achieving specified EBIT CAGR performance targets for our or the applicable segment's EBIT during the third year of the performance period compared to EBIT during the fiscal year immediately preceding the performance period. Participants will earn from 0% to 200% of the base award.

Below is a summary of shares and grant date fair value related to PSU awards for the periods presented:


	Three Months Ended March 31,
	2022			2021
TSR based
Total shares base award	.1			.1
Grant date per share fair value	$	41.13		$	49.43
Risk-free interest rate	.2		%	.2		%
Vesting period in years	3.0			3.0
Expected volatility (over expected life)	45.2		%	44.3		%
Expected dividend yield (over expected life)	4.6		%	3.7		%

EBIT CAGR based
Total shares base award	.1			.1
Grant date per share fair value	$	32.88		$	38.77
Vesting period in years	3.0			3.0

Three-Year Performance Cycle for PSU - TSR Based

Award Year

Completion Date

Payout as a
Percent of the
Base Award

Number of Shares
Distributed

Cash Portion

Distribution Date

TSR Performance
Relative to the Peer Group (1%=Best)

2018

December 31, 2020

56.0%

<.1 million

2.0

First quarter 2021

th percentile

2019

December 31, 2021

—%

— million

—

First quarter 2022