Share-Based Compensation

12 Months Ended

Dec. 31, 2022

Share-Based Payment Arrangement [Abstract]

Compensation cost included in income from continuing operations, primarily selling, general and administrative expense, and the income tax benefit recognized for our share-based compensation arrangements is included below:


	Years Ended December 31,
	2022		2021		2020
	(In thousands)
Total share-based compensation cost	$	23,454	$	22,627	$	17,405
Income tax benefit	5,582		5,385		4,142

We currently have outstanding stock appreciation rights (SARs), restricted stock units with service vesting conditions, restricted stock units with performance vesting conditions, and restricted stock units with market conditions. We grant SARs with an exercise price equal to the closing market price of our common stock on the grant date. Generally, SARs may be converted into shares of our common stock in equal amounts on each of the first three anniversaries of the grant date and expire 10 years from the grant date. Certain awards provide for accelerated vesting in certain circumstances, including following a change in control of the Company. Restricted stock units with service conditions generally vest 3-5 years from the grant date. Restricted stock units issued based on the attainment of the performance conditions generally vest on the second or third anniversary of their grant date. Restricted stock units issued based on the attainment of market conditions generally vest on the third anniversary of their grant date.

We recognize compensation cost for all awards based on their fair values. The fair values for SARs are estimated on the grant date using the Black-Scholes-Merton option-pricing formula which incorporates the assumptions noted in the following table. Expected volatility is based on historical volatility, and expected term is based on historical exercise patterns of SAR holders. The fair value of restricted stock units with service vesting conditions or performance vesting conditions is the closing market price of our common stock on the date of grant. We estimate the fair value of certain restricted stock units with market conditions using a Monte Carlo simulation valuation model with the assistance of a third party valuation firm. Compensation costs for awards with service conditions are amortized to expense using the straight-line method. Compensation costs for awards with performance conditions and graded vesting are amortized to expense using the graded attribution method.

During the year ended December 31, 2020, certain restricted stock units with performance vesting conditions were modified as a result of approved changes to the performance targets. There were no other changes to the terms of the restricted stock units. The modification was applicable to all employees who were previously granted the affected restricted stock units. Prior to the modification, the performance targets were not expected to be achieved. Therefore, we had not recognized any expense for these restricted stock units on a cumulative basis. As of the modification date, we expected to recognize total incremental compensation expense as a result of the modification of $4.4 million. The expense will be recognized over the applicable service periods, which extend to 2023.


	Years Ended December 31,
	2022			2021			2020
	(In thousands, except weighted average fair value and assumptions)
Weighted-average fair value of SARs granted	$	21.85		$	18.30		$	18.29
Total intrinsic value of SARs exercised	4,384			1,581			545
Tax benefit from SARs exercised	678			327			26
Weighted-average fair value of restricted stock units granted	61.61			51.76			41.75
Total fair value of restricted stock units vested	16,830			12,623			6,600
Expected volatility	43.00		%	45.34		%	37.55		%
Expected term (in years)	5.6			5.7			5.7
Risk-free rate	1.89		%	0.70		%	1.44		%
Dividend yield	0.37		%	0.44		%	0.39		%


	SARs						Restricted Stock Units
	Number	Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term	Aggregate Intrinsic Value		Number	Weighted- Average Grant-Date Fair Value
	(In thousands, except exercise prices, fair values, and contractual terms)
Outstanding at January 1, 2022	1,244	$	63.18	n/a	n/a		964	$	50.08
Granted	165	53.83		n/a	n/a		395	61.61
Exercised or converted	(340)	56.18		n/a	n/a		(307)	54.70
Forfeited or expired	(111)	62.64		n/a	n/a		(155)	51.37
Outstanding at December 31, 2022	958	$	64.13	4.8	$	10,017	897	$	54.59

Vested or expected to vest at December 31, 2022	282	$	50.19	8.5	$	6,132
Exercisable or convertible at December 31, 2022	676	$	69.95	3.3	$	3,885

At December 31, 2022, the total unrecognized compensation cost related to all nonvested awards was $34.9 million. That cost is expected to be recognized over a weighted-average period of 2.0 years. Historically, we have issued treasury shares, if available, to satisfy award conversions and exercises.