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Stock Compensation Plans and Stock Based Compensation (Tables)
 12 Months Ended
Dec. 31, 2023
Share-Based Payment Arrangement [Abstract]  
Stock based compensation expense and allocation by share based payment award
Stock-based compensation expense and the related income tax benefit recognized in connection with stock options, restricted stock and the ESPP during fiscal 2023, 2022 and 2021 were as follows:
202320222021
(In thousands)
Stock options$15,939 $14,597 $9,051 
Restricted stock278,567 224,887 181,946 
ESPP31,105 30,955 19,093 
Total stock-based compensation expense$325,611 $270,439 $210,090 
Income tax benefit$50,994 $40,612 $33,958 
Stock based compensation expense and allocation by cost
Stock-based compensation expense is reflected in Cadence’s consolidated income statements during fiscal 2023, 2022 and 2021 as follows:
202320222021
(In thousands)
Cost of product and maintenance$4,500 $3,818 $3,375 
Cost of services5,728 4,851 4,161 
Marketing and sales66,304 54,771 43,264 
Research and development194,709 158,937 131,247 
General and administrative54,370 48,062 28,043 
Total stock-based compensation expense$325,611 $270,439 $210,090 
Fair value of options granted and the weighted-average assumptions The weighted average grant date fair value of options granted, and the weighted average assumptions used in the model for fiscal 2023, 2022 and 2021 were as follows:
202320222021
Dividend yieldNoneNoneNone
Expected volatility32.6 %36.0 %31.7 %
Risk-free interest rate3.62 %2.14 %1.02 %
Expected term (in years)5.04.84.8
Weighted average fair value of options granted$71.83 $49.16 $46.10 
Summary of changes in stock options outstanding under equity incentive plans
A summary of the changes in stock options outstanding under Cadence’s equity incentive plans during fiscal 2023 is presented below:
Weighted
Average
Weighted
Average
Remaining
Contractual
Terms



Aggregate
Intrinsic
SharesExercise Price(Years)Value
(In thousands)(In thousands)
Options outstanding as of December 31, 2022
2,915 $80.35 
Granted262 205.87 
Exercised(797)38.82 
Forfeited(13)131.94 
Options outstanding as of December 31, 2023
2,367 $107.93 3.5$389,178 
Options vested as of December 31, 2023
1,763 $85.79 2.8$328,927 
Intrinsic value of and cash received from options exercised
The total intrinsic value of and cash received from options exercised during fiscal 2023, 2022 and 2021 was:
202320222021
(In thousands)
Intrinsic value of options exercised$139,125 $105,242 $129,403 
Cash received from options exercised30,940 16,014 23,844 
Fair value of market-based awards valued granted and the weighted-average assumptions The weighted average assumptions used in the model for fiscal 2023 and fiscal 2022 were as follows:
20232022
Dividend yieldNoneNone
Expected volatility33.6 %29.1 %
Risk-free interest rate3.64 %1.98 %
Expected term (in years)3.85.1
Weighted average fair value of market-based awards granted
$132.20 $51.34 
Stock-based compensation expense related to performance-based restricted stock grants
Stock-based compensation expense related to performance-based restricted stock grants and market-based restricted stock grants for fiscal 2023, 2022 and 2021 was as follows:
202320222021
(In thousands)
Stock-based compensation expense related to performance-based restricted stock$22,922 $17,753 $16,225 
Stock-based compensation expense related to market-based stock awards
30,095 25,259 6,453 
Summary of the changes in restricted stock outstanding under Cadence's equity incentive plans
A summary of the changes in restricted stock outstanding under Cadence’s equity incentive plans during fiscal 2023 is presented below:
Weighted
Average Grant Date


Aggregate
Intrinsic
SharesFair ValueValue
(In thousands)(In thousands)
Unvested shares as of December 31, 2022
6,371 $99.03 
Granted1,546 233.78 
Vested(2,052)115.26 
Forfeited(268)118.97 
Unvested shares as of December 31, 2023
5,597 $129.35 $1,138,797 
Total fair value of restricted stock awards that vested
The total fair value realized by employees upon vesting of restricted stock during fiscal 2023, 2022 and 2021 was:
202320222021
(In thousands)
Fair value of restricted stock realized upon vesting$442,556 $346,003 $365,298 
Weighted-average grant date fair value of purchase rights granted under ESPP and weighted average assumptions used in model The weighted average grant date fair value of purchase rights granted under the ESPP and the weighted average assumptions used in the model for fiscal 2023, 2022 and 2021 were as follows:
202320222021
Dividend yieldNoneNoneNone
Expected volatility29.9 %37.2 %31.5 %
Risk-free interest rate4.50 %1.71 %0.07 %
Expected term (in years)0.50.50.5
Weighted average fair value of options granted$50.95 $43.41 $33.77 
Shares of common stock issued under Employee Stock Purchase Plan
Shares of common stock issued under the ESPP for fiscal 2023, 2022 and 2021 were as follows:
202320222021
(In thousands, except per share amounts)
Cadence shares purchased under the ESPP647 703 624 
Cash received for the purchase of shares under the ESPP$102,017 $89,314 $63,932 
Weighted average purchase price per share$157.70 $127.12 $102.41 
Summary of common stock reserved for future issuance
As of December 31, 2023, Cadence had reserved the following shares of authorized but unissued common stock for future issuance:
Shares
(In thousands)
Employee equity incentive plans*21,028 
Employee stock purchase plans3,280 
Directors stock plans*458 
    Total24,766 
_____________
*Includes shares reserved for: (i) issuance upon exercise of future option grants, (ii) issuance upon vesting of future restricted stock grants, (iii) outstanding but unexercised options to purchase common stock, or (iv) unvested restricted stock units.