Stock-Based Compensation

3 Months Ended

Aug. 30, 2020

Share-based Payment Arrangement, Noncash Expense [Abstract]

Stock-Based Compensation

Stock-Based Compensation

We grant stock options for a fixed number of shares to certain employees with an exercise price equal to the fair value of the shares at the date of grant. We also grant restricted stock, restricted stock units, and performance stock units with a fair value generally determined based on our closing stock price on the date of grant. In addition, we grant cash settled stock units (Darden stock units) which are classified as liabilities and are marked to market as of the end of each period.

The weighted-average fair value of non-qualified stock options and the related assumptions used in the Black-Scholes option pricing model were as follows.

	Stock Options Granted
	Three Months Ended
	August 30, 2020			August 25, 2019
Weighted-average fair value	$	20.07		$	19.94
Dividend yield	3.0		%	3.0		%
Expected volatility of stock	37.3		%	22.5		%
Risk-free interest rate	0.4		%	1.9		%
Expected option life (in years)	6.4			6.3
Weighted-average exercise price per share	$	78.84		$	124.24

The weighted-average grant date fair value of performance-based restricted stock units and the related assumptions used in the Monte Carlo simulation to record stock-based compensation are as follows:

	Granted in Fiscal Year Ended
	Three Months Ended
	August 30, 2020			August 25, 2019
Dividend yield (1)	0.0		%	0.0		%
Expected volatility of stock	50.5		%	23.1		%
Risk-free interest rate	0.1		%	1.8		%
Expected life (in years)	2.8			2.9
Weighted-average grant date fair value per unit	$	83.46		$	124.41

(1) Assumes a reinvestment of dividends.

The following table presents a summary of our stock-based compensation activity for the three months ended August 30, 2020.

(in millions)	Stock Options		Restricted Stock/ Restricted Stock Units		Equity-Settled Performance Stock Units		Cash-Settled Darden Stock Units
Outstanding beginning of period	2.62		0.28		0.55		1.03
Awards granted	0.28		0.08		0.14		0.28
Awards exercised/vested	(0.04	)	(0.07	)	(0.19	)	(0.28	)
Awards forfeited	(0.01	)	(0.01	)	—		(0.03	)
Outstanding end of period	2.85		0.28		0.50		1.00

We recognized expense from stock-based compensation as follows: 

	Three Months Ended
(in millions)	August 30, 2020		August 25, 2019
Stock options	$	1.6	$	1.3
Restricted stock/restricted stock units	2.8		1.8
Equity-settled performance stock units	5.7		3.8
Cash-settled Darden stock units	8.0		6.6
Employee stock purchase plan	0.6		0.4
Director compensation program/other	0.4		0.3
Total stock-based compensation expense	$	19.1	$	14.2