Share-Based Compensation

9 Months Ended

Sep. 30, 2018

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

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Share-Based Compensation

We measure all share-based payments to employees, including grants of stock options, and use a fair-value-based method for the recording of related compensation expense in our results of operations. In determining the expense we record for stock options granted to directors and employees of our subsidiaries and affiliates, we estimate the fair value of each option award on the date of grant using the Black-Scholes option pricing model. The significant assumptions we utilize in applying the Black-Scholes option pricing model are the risk-free interest rate, the expected term, the dividend yield and the expected volatility.

We charged compensation expense related to our stock compensation plans against income before income taxes of $317,526 and $411,450 for the three months ended September 30, 2018 and 2017, respectively, with a corresponding income tax benefit of $66,680 and $144,008, respectively. We charged compensation expense related to our stock compensation plans against income before income taxes of $1.4 million and $1.6 million for the nine months ended September 30, 2018 and 2017, respectively, with a corresponding income tax benefit of $285,578 and $564,075, respectively. At September 30, 2018, we had $1.4 million of unrecognized compensation expense related to nonvested share-based compensation granted under our stock compensation plans that we expect to recognize over a weighted average period of approximately 1.4years.

We received cash from option exercises under all stock compensation plans during the three months ended September 30, 2018 and 2017 of $217,112 and $765,127, respectively. We received cash from option exercises under all stock compensation plans during the nine months ended September 30, 2018 and 2017 of $695,762 and $2.9 million, respectively. We realized actual tax benefits for the tax deductions related to those option exercises of $2,516 and $42,411 for the three months ended September 30, 2018 and 2017, respectively. We realized actual tax benefits for the tax deductions related to those option exercises of $21,319 and $220,767 for the nine months ended September 30, 2018 and 2017, respectively.