Stock-Based Compensation

9 Months Ended

Jun. 30, 2023

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation

15. Stock-Based Compensation

The Company may issue to eligible employees options to purchase shares of the Company’s common stock, restricted stock units and other equity incentives, which vest upon the satisfaction of a performance condition and/or service condition. In addition, the Company issues common stock to participating employees pursuant to an employee stock purchase plan, and also issues common stock awards and deferred restricted stock units to members of its board of directors in accordance with its board of director compensation program.

The following table reflects the total stock-based compensation expense (continuing and discontinued operations) recorded during the three and nine months ended June 30, 2023 and 2022 (in thousands):

	Three Months Ended June 30,				Nine Months Ended June 30,
	2023		2022		2023		2022
Restricted stock units	$	3,604	$	3,178	$	8,997	$	18,433
Employee stock purchase plan		391		307		1,094		1,600
Total stock-based compensation expense for continuing and discontinued operations	$	3,995	$	3,485	$	10,091	$	20,033

Restricted stock units granted with performance goals may also have a required service period following the achievement of all or a portion of the performance goals. The following table reflects restricted stock units and common stock awards granted during the nine months ended June 30, 2023 and 2022:

	Nine Months Ended June 30,
	2023	2022
Time-based restricted stock units	311,609	94,429
Common stock awards	—	49,063
Performance-based restricted stock units	278,457	88,204
Total units	590,066	231,696

Time-Based Restricted Stock Unit Grants

Restricted stock units granted with a required service period typically have three-year vesting schedules in which one-third of awards vest at each annual anniversary of the grant date, subject to the award holders meeting service requirements.

Certain members of the Board of Directors have elected to defer receiving their annual stock awards and related quarterly dividends, if any, until they attain a certain age or cease to provide services as a member of the Company’s Board of Directors. Annual deferred stock awards granted during fiscal years 2023 and 2022 were vested upon issuance.

Performance-Based Restricted Stock Unit Grants

Performance-based restricted stock units are earned based on the achievement of performance criteria established by the Human Resources and Compensation Committee and approved by the Board of Directors. The criteria for performance-based awards are weighted and have threshold, target and maximum performance goals.

Performance-based restricted stock unit awards granted in fiscal year 2023 and 2022 allow participants to earn 100% of the restricted stock units if the Company’s performance meets or exceeds its target goal for each applicable financial metric, up to a maximum of 200% if the Company’s performance for such metrics meets or exceeds the maximum or stretch goal. Performance below the minimum threshold for each financial metric results in award forfeiture. Performance goals are measured over a three-year period for each year’s restricted stock unit awards and at the end of the period to determine the number of restricted stock units earned, if any, by recipients who continue to meet the service requirement. Upon the third anniversary of each year’s restricted stock unit awards’ grant date, the Company’s Board of Directors determines the number of restricted stock units earned for participants who continue to meet the service requirements on the vest date.

Awards Granted to the Board of Directors

The stock-based compensation granted to members of the Company’s Board of Directors includes common stock awards, restricted stock unit awards, and deferred common stock and restricted stock unit awards.

Restricted Stock Unit Activity

The following table summarizes restricted stock unit activity for the nine months ended June 30, 2023:

		Weighted
		Average
		Grant-Date
	Shares	Fair Value
Outstanding as of September 30, 2022	538,238	$	71.99
Granted	590,066	$	55.10
Vested	(263,777)	$	55.76
Forfeited	(104,220)	$	73.62
Outstanding as of June 30, 2023	760,307	$	66.22

The weighted average grant date fair value of restricted stock units granted during the three months ended June 30, 2023 and 2022 was $42.35 and $80.58, respectively. The fair value of restricted stock units vested during the three months ended June 30, 2023 and 2022 was $0.1 million and $0.2 million, respectively. The weighted average grant date fair value of restricted stock units granted during the nine months ended June 30, 2023 and 2022 was $55.10 and $103.00, respectively. For the three months ended June 30, 2023 and 2022, the Company remitted less than $0.1 million in each period collected from employees to satisfy their tax obligations as a result of share issuances. During the nine months ended June 30, 2023 and 2022, the Company remitted $4.9 million and $25.1 million, respectively, to satisfy employee tax obligations as a result of share issuances, of which $4.9 million and zero, respectively, was paid by the Company.

As of June 30, 2023, the unrecognized stock-based compensation expense related to these stock awards that are expected to vest was $27.4 million and will be recognized over an estimated weighted average service period of 1.9 years.

Employee Stock Purchase Plan

The Company maintains an employee stock purchase plan that allows its employees to purchase shares of common stock at a price equal to 85% of the fair market value of the Company’s common stock at the beginning or the end of the semi-annual offering period, whichever is lower. There were 39,479 and 51,133 shares, respectively, purchased by employees under the employee stock purchase plan during the nine months ended June 30, 2023 and 2022.