Share-Based Compensation

6 Months Ended

Jun. 30, 2019

Share Based Compensation [Abstract]

Share-Based Compensation

Note 3. Share-Based Compensation

The Company has historically granted the majority of its share-based awards during the second quarter of each fiscal year. In the second quarter of 2019 and 2018, the Company awarded 462 and 461 restricted stock units (RSUs), respectively, under the Omnibus Incentive Plan (2017 Plan), which was approved by shareholders in 2017. The RSUs were granted at a weighted-average fair value of $75.73 in 2019 and $69.58 in 2018. The RSUs vest annually over 3 years based on continued employment and are settled upon vesting in shares of the Company's common stock on a one-for-one basis. The value of an RSU award is based on the Company's stock price on the date of grant. Additionally, in the second quarter of 2019 and 2018, 24 and 25 fully vested shares were granted to non-employee directors, respectfully.

The Company also awarded 96 and 18 performance stock units (PSUs) in the second quarter of 2019 and 2018, respectively, under the 2017 Plan. Outstanding PSUs include performance conditions to be finally measured in 2019, 2020 and 2021, respectively. The final number of PSUs will be determined using an adjustment factor of up to 2 times or down to 0.5 of the targeted PSU grant. If the minimum performance thresholds are not achieved, no shares will be issued. Each PSU will convert to one share of the Company's common stock upon vesting.

RSUs and PSUs granted under the 2017 Plan have dividend equivalent rights, which entitle holders of the awards to the same dividend value per share as holders of common stock. Dividend equivalent rights are subject to the same vesting and other terms and conditions as the corresponding unvested RSUs and PSUs and are accumulated and paid in shares when the underlying awards vest.

The grant of employee stock purchase rights and the issuance of shares under the employee stock purchase plan are made in the third quarter of each fiscal year. None were issued during the three and six months ended June 30, 2019 and 2018.

The Company recognizes stock compensation expense based on the fair value of awards granted to employees and directors under the Company’s omnibus incentive, stock option, director restricted stock and employee stock purchase rights plans. This expense, adjusted for expected forfeitures, is recognized in net earnings on a straight-line basis over the service periods as salaries and related costs on the condensed consolidated statements of earnings. RSUs and PSUs awarded to certain employees meeting specific retirement eligibility criteria at the time of grant are expensed immediately as there is no substantive service period associated with those awards. For RSU awards meeting retirement eligibility criteria, approximately $5,000 of stock compensation expense was recognized for the three and six months ended June 30, 2019, and approximately $4,000 of stock compensation expense was recognized for three and six months ended June 30, 2018. For PSU awards meeting retirement eligibility criteria, approximately $5,000 of stock compensation expense was recognized during the three and six months ended June 30, 2019. There were no PSU awards granted meeting retirement eligibility criteria during 2018.