Share-Based Compensation

12 Months Ended

Sep. 30, 2023

Share-Based Payment Arrangement [Abstract]

Under the 2022 Omnibus Incentive Compensation Plan (the “Omnibus Plan”), the Company is authorized to grant up to 2.4 million shares, including both stock options and restricted stock. 1.7 million shares are available for grant as of September 30, 2023. Share-based compensation expense is included in Compensation and benefits in the Consolidated Income Statements and totaled $28.0 million, $17.8 million and $13.9 million for the years ended September 30, 2023, 2022, and 2021, respectively.

Stock Options

The Company sponsors the Omnibus Plan for its directors, officers, employees and consultants. Awards that expire or are canceled generally become available for issuance again under the Omnibus Plan. The Company settles stock option exercises with newly issued shares of common stock.

Fair value is estimated at the grant date based on a Black-Scholes-Merton option-pricing model using the following weighted-average assumptions:


	Year Ended September 30,
	2023		2022		2021
Expected stock price volatility	42	%	39	%	38	%
Expected dividend yield	—	%	—	%	—	%
Risk free interest rate	1.60	%	1.54	%	1.68	%
Average expected life (in years)	4.25		5.21		4.50

Expected stock price volatility rates are primarily based on historical volatility. The Company has not paid dividends in the past and does not currently expect to do so in the future. Risk free interest rates are based on the U.S. Treasury yield curve in effect at the time of grant for periods corresponding with the expected life of the option or award. The average expected life represents the estimated period of time that options or awards granted are expected to be outstanding, based on the Company’s historical share option exercise experience for similar option grants. The weighted average fair value of options issued during the years ended September 30, 2023, 2022, and 2021 was $33.21, $22.82, and $19.83, respectively.

The following is a summary of stock option activity for the year ended September 30, 2023:


	Number of Options Outstanding	Weighted Average Exercise Price		Weighted Average Grant Date Fair Value		Weighted Average Remaining Term (in years)	Aggregate Intrinsic Value ($ millions)
Balances as of September 30, 2022	1,199,345	$	50.46	$	14.57	4.54	$	39.0

Granted	81,750	$	93.70	$	33.21
Exercised	(83,794)	$	47.13	$	13.06
Forfeited	(19,849)	$	65.10	$	23.39
Expired	(2,088)	$	49.92	$	14.74
Balances as of September 30, 2023	1,175,364	$	53.46	$	15.82	3.80	$	51.1
Exercisable at September 30, 2023	387,810	$	49.20	$	13.61	3.49	$	18.5

The total compensation cost not yet recognized for non-vested awards of $9.2 million as of September 30, 2023 has a weighted-average period of 3.95 years over which the compensation expense is expected to be recognized. The total intrinsic value of options exercised during the years ended September 30, 2023, 2022, and 2021 was $4.2 million, $39.0 million and $11.7 million, respectively.

The options outstanding as of September 30, 2023 broken down by exercise price are as follows:


Exercise Price					Number of Options Outstanding	Weighted Average Exercise Price		Weighted Average Remaining Term (in Years)








$	40.00	-	$	45.00	700,000	$	45.00	3.18



$	45.00	-	$	95.00	475,364	$	65.92	4.71
					1,175,364	$	53.46	3.80

Restricted Stock

The Company sponsors restricted stock under the Omnibus Plan for its directors, officers, and employees. Awards that expire or are canceled generally become available for issuance again under the Omnibus Plan. The Company utilizes newly issued shares of common stock to make restricted stock grants.

The following is a summary of restricted stock activity through September 30, 2023:


	Number of Shares Outstanding	Weighted Average Grant Date Fair Value		Weighted Average Remaining Term (in years)	Aggregate Intrinsic Value ($ millions)
Balances as of September 30, 2022	579,666	$	60.22	1.22	$	48.1


Granted	413,545	$	93.59
Vested	(305,561)	$	58.38
Forfeited	(638)	$	80.69
Balances as of September 30, 2023	687,012	$	81.10	1.24	$	66.5

The total compensation cost not yet recognized of $40.5 million as of September 30, 2023 has a weighted-average period of 1.24 years over which the compensation expense is expected to be recognized. Compensation expense is amortized on a straight-line basis over the vesting period. Restricted stock grants are included in the Company’s total issued and outstanding common shares.