Share-Based Compensation

12 Months Ended

Mar. 31, 2024

Share-Based Payment Arrangement [Abstract]

Share-Based Compensation Expense

The following table presents the details of the Company's share-based compensation expense (in millions):


	Fiscal Year Ended March 31,
	2024		2023		2022
Cost of sales (1)	$	25.6	$	27.2	$	34.3
Research and development	94.3		83.1		97.9
Selling, general and administrative	57.6		60.1		78.0

Pre-tax effect of share-based compensation	177.5		170.4		210.2
Income tax benefit	37.5		36.4		44.6
Net income effect of share-based compensation	$	140.0	$	134.0	$	165.6

(1) During the fiscal year ended March 31, 2024, $19.0 million of share-based compensation expense was capitalized to inventory and $25.6 million of previously capitalized share-based compensation expense in inventory was sold. During the fiscal year ended March 31, 2023, $19.7 million of share-based compensation expense was capitalized to inventory and $27.2 million of previously capitalized share-based compensation expense in inventory was sold. During the fiscal year ended March 31, 2022, $21.2 million of share-based compensation expense was capitalized to inventory and $34.3 million of previously capitalized share-based compensation expense in inventory was sold.

Incentive Plans

The Company has granted RSUs and stock options to employees and non-employee members of the Board of Directors under the Company’s 2004 Equity Incentive Plan (the 2004 plan). The Company grants RSUs with a service condition and PSUs under the 2004 plan. Under the 2004 plan, 64,389,717 shares of common stock have been authorized for issuance and 6,546,628 shares of common stock remain available for future grants as of March 31, 2024. As of March 31, 2024, the number of options exercisable was 196 and the weighted average exercise price per share was $17.19.

Restricted Stock Units

The Company uses RSUs with a service condition as its primary equity incentive compensation instrument for employees.

RSUs share activity is set forth below:


	Number of Shares	Weighted Average Grant Date Fair Value
Nonvested shares at March 31, 2021	11,710,924	$	44.51
Granted	2,850,803	$	74.00

Forfeited	(917,303)	$	50.76
Vested	(3,795,469)	$	43.77
Nonvested shares at March 31, 2022	9,848,955	$	52.74
Granted	3,054,320	$	61.76
Forfeited	(815,738)	$	55.14
Vested	(3,423,935)	$	45.08
Nonvested shares at March 31, 2023	8,663,602	$	58.72
Granted	2,535,772	$	77.28

Forfeited	(474,397)	$	64.37
Vested	(2,510,781)	$	48.56
Nonvested shares at March 31, 2024	8,214,196	$	67.22

The total intrinsic value of RSUs which vested during the fiscal years ended March 31, 2024, 2023 and 2022 was $201.4 million, $256.3 million and $287.6 million, respectively. The aggregate intrinsic value of RSUs outstanding at March 31, 2024 was $736.9 million, calculated based on the closing price of the Company's common stock of $89.71 per share on March 31, 2024.

The amount of unearned share-based compensation currently estimated to be expensed in the remainder of fiscal 2025 through fiscal 2029 related to unvested RSUs at March 31, 2024 is $320.3 million. The weighted average period over which the unearned RSUs compensation is expected to be recognized is approximately 2.12 years.

Performance Stock Units

The Company has granted performance-based PSUs to a group of executive officers and employees. For the performance-based PSUs, the number of shares of the Company's common stock expected to vest will range from 0% to 200% of the target grant amount based on the Company's two-year or three-year cumulative non-GAAP operating margin percentage. Prior to fiscal 2023, the Company granted market-based PSUs to executive officers. For the market-based PSUs, the number of shares of the Company's common stock expected to be received at vesting will range from 0% to 200% of the target grant amount based on the TSR of the Company's common stock measured against the TSR of a defined peer group of companies over the applicable two-year or three-year measurement period. TSR is a measure of the stock price appreciation plus any dividends paid in the performance period.

PSUs share activity is set forth below:


	Number of Shares	Weighted Average Grant Date Fair Value
Nonvested shares at March 31, 2021	172,894	$	62.85
Granted	145,188	$	81.51
Forfeited	(61,022)	$	57.08
Vested	—	$	—
Nonvested shares at March 31, 2022	257,060	$	74.76
Granted	172,334	$	60.88
Forfeited	(48,524)	$	66.71
Vested	—	$	—
Nonvested shares at March 31, 2023	380,870	$	69.51
Granted	123,747	$	77.61
Forfeited	(2,883)	$	100.20
Vested	—	$	—
Nonvested shares at March 31, 2024	501,734	$	71.33

During the fiscal years ended March 31, 2024, 2023 and 2022, no PSUs vested. The aggregate intrinsic value of PSUs outstanding at March 31, 2024 was $45.0 million, calculated based on the closing price of the Company's common stock of $89.71 per share on March 31, 2024.

The amount of unearned share-based compensation currently estimated to be expensed in the remainder of fiscal 2025 through fiscal 2029 related to unvested PSUs at March 31, 2024 is $25.0 million. The weighted average period over which the unearned PSUs compensation is expected to be recognized is approximately 2.13 years.

Employee Stock Purchase Plan

The Company’s 2001 Employee Stock Purchase Plan and the 1994 International Employee Stock Purchase Plan (collectively referred to as the employee stock purchase plans) allows eligible employees to purchase shares of the Company's common stock at 85% of the value of its common stock on specific dates. Since the inception of the employee stock purchase plans, 35,548,364 shares of common stock have been authorized for issuance and 8,677,504 shares remain available for future purchases as of March 31, 2024.

Employees purchased 1,375,324 shares of common stock in the fiscal year ended March 31, 2024 for an aggregate purchase price of $81.7 million under the employee stock purchase plans compared to 1,424,850 shares of common stock for an aggregate purchase price of $81.2 million in the fiscal year ended March 31, 2023 and 1,485,477 shares of common stock for a purchase price of $70.0 million in the fiscal year ended March 31, 2022. As of March 31, 2024, unrecognized share-based compensation costs related to the employee stock plans totaled $7.6 million, which will be recognized over a period of approximately five months.