Share-Based Compensation

9 Months Ended

Mar. 30, 2019

Share-based Compensation [Abstract]

Share-Based Compensation

SHARE-BASED COMPENSATION

Sysco provides compensation benefits to employees under several share-based payment arrangements, including various long-term employee stock incentive plans and the 2015 Employee Stock Purchase Plan (ESPP).

Stock Incentive Plans

In the first 39 weeks of fiscal 2019, options to purchase 2,609,755 shares were granted to employees. The fair value of each option award is estimated as of the date of grant using a Black-Scholes option pricing model. The weighted average grant-date fair value per option granted during the first 39 weeks of fiscal 2019 was $11.70.

In the first 39 weeks of fiscal 2019, 578,102 performance share units (PSUs) were granted to employees. Based on the jurisdiction in which the employee resides, some of these PSUs were granted with forfeitable dividend equivalents. The fair value of each PSU award granted with a dividend equivalent is based on the company’s stock price as of the date of grant. For PSUs granted without dividend equivalents, the fair value was reduced by the present value of expected dividends during the vesting period. The weighted average grant-date fair value per performance share unit granted during the first 39 weeks of fiscal 2019 was $74.86. The PSUs will convert into shares of Sysco common stock at the end of the performance period based on financial performance targets consisting of Sysco’s earnings per share compound annual growth rate and adjusted return on invested capital.

In the first 39 weeks of fiscal 2019, 616,868 restricted stock units were granted to employees. The weighted average grant-date fair value per restricted stock unit granted during the first 39 weeks of fiscal 2019 was $63.91.

Employee Stock Purchase Plan

Plan participants purchased 739,051 shares of common stock under the Sysco ESPP during the first 39 weeks of fiscal 2019. The weighted average fair value per employee stock purchase right issued pursuant to the ESPP was $10.22 during the first 39 weeks of fiscal 2019. The fair value of each stock purchase right is estimated as the difference between the stock price and the employee purchase price.

All Share-Based Payment Arrangements

The total share-based compensation cost that has been recognized in results of operations was $78.1 million and $72.7 million for the first 39 weeks of fiscal 2019 and fiscal 2018, respectively.

As of March 30, 2019, there was $141.9 million of total unrecognized compensation cost related to share-based compensation arrangements. This cost is expected to be recognized over a weighted-average period of 1.98 years.