Stock-Based Compensation Plans

3 Months Ended

Mar. 31, 2022

Share-based Payment Arrangement [Abstract]

Stock-Based Compensation Plans

Stock-Based Compensation PlansAs part of its long-term compensation plans, the Company has granted stock options, performance awards and restricted stock under the 2009 Plan. Details of the outstanding awards and activity under the 2009 Plan for the three months ended March 31, 2022 are presented below.

Stock Options:

	2009 Plan shares	Weighted average exercise price per share
Options Outstanding at December 31, 2021	299,149	$	178.71
Granted (1)	9,793	236.14
Exercised	(4,304)	141.41
Forfeited	(2,444)	180.32
Options Outstanding at March 31, 2022	302,194	$	181.09
Options Exercisable at March 31, 2022	7,058	$	135.62

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(1)Grants are from recipient elections to receive a portion of earned restricted stock awards in the form of stock options.

Performance Awards:

	Performance awards	Weighted average grant date fair value per award (1)
Outstanding at December 31, 2021	284,522	$	214.73
Granted (2)	72,189	255.01
Change in awards based on performance (3)	(20,356)	200.92
Converted to shares of common stock	(54,053)	217.33
Forfeited	(755)	223.60
Outstanding at March 31, 2022	281,547	$	225.54

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(1)Weighted average grant date fair value per award includes the impact of post grant modifications.

(2)The shares of common stock that may be earned is based on the total shareholder return metrics for the Company's common stock for 39,645 performance awards and financial metrics related to operating performance and leverage metrics of the Company for 32,544 performance awards.

(3)Represents the change in the number of performance awards earned based on performance achievement.

The Company used a Monte Carlo model to assess the compensation cost associated with the portion of the performance awards granted for which achievement will be determined by using total shareholder return measures. For the awards granted in 2022, the assumptions used are as follows:

	2022
Dividend yield	2.7%
Estimated volatility over the life of the plan (1)	16.1% - 36.8%
Risk free rate	0.72% - 1.68%
Estimated performance award value based on total shareholder return measure	$271.98

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(1)Estimated volatility over the life of the plan is using 50% historical volatility and 50% implied volatility.

For the portion of the performance awards granted in 2022 for which achievement will be determined by using financial metrics, the compensation cost was based on a weighted average grant date value of $234.18, and the Company's estimate of corporate achievement for the financial metrics.

Restricted Stock:

	Restricted stock shares	Restricted stock shares weighted average grant date fair value per share		Restricted stock shares converted from performance awards
Outstanding at December 31, 2021	157,066	$	192.90	74,627
Granted - restricted stock shares	78,082	236.17		—
Vested - restricted stock shares	(70,596)	195.83		(47,335)
Forfeited	(1,120)	219.75		(28)
Outstanding at March 31, 2022	163,432	$	212.12	27,264

Total employee stock-based compensation cost recognized in income was $6,887,000 and $5,247,000 for the three months ended March 31, 2022 and 2021, respectively, and total capitalized stock-based compensation cost was $2,377,000 and $1,903,000 for the three months ended March 31, 2022 and 2021, respectively. At March 31, 2022, there was a total unrecognized compensation cost of $67,583,000 for unvested restricted stock, stock options and performance awards, which is expected to be recognized over a weighted average period of 2.2 years. Forfeitures are included in compensation cost as they occur.