Does your company provide Share$-$Based Compensation?

Yes, the company provides share$-$based compensation through stock options, restricted stock units $($RSUs$),$ and performance stock units $($PSUs$)$ to certain managers, directors, and employees. The share$-$based compensation plan was approved by shareholders in $2019,$ authorizing a maximum of $150$ million shares of common stock for issuance, with a total of $96$ million shares remaining available for grant.

Share$-$based compensation impacts EPS by reducing net income while boosting the count of outstanding shares, potentially leading to a decrease in EPS. This aspect holds significance for investors and analysts as they assess a company's financial performance and its potential future worth.

What types are provided?

The types of share$-$based compensation provided by the company include:

Stock Options: Managers can elect to receive stock options, which vest after three years and have a $10-$year life. The exercise prices on options equal the underlying shares' market price on the grant date.

Restricted Stock Units $($RSUs$)$: RSUs vest and settle in shares of common stock three years from the grant date.

Performance Stock Units $($PSUs$)$: Senior$-$level executives participate in a program that awards PSUs, which are paid in shares after the end of a three$-$year performance period, subject to pre$-$established performance goals.

Projections of future performance should be based primarily on continuing operations. What was diluted EPS for continuing operations in each of the most recent three years?

$$ Diluted EPS increased $2\%$ to $$5\mathrm{.}90$ as the decrease in net earnings was more than offset by a reduction in shares outstanding.

$20235\mathrm{.}90$

$20225\mathrm{.}81$

$2\%$ difference

$20215\mathrm{.}50$

How many shares were included in diluted earnings per share but not basic earnings per share due to share$-$based compensation awards?

$2023$ Weighted Averages

Basic EPS $6\mathrm{.}07$

Diluted EPS $5\mathrm{.}90$

The difference between the diluted and basic EPS $(0\mathrm{.}17)$ is due to share$-$based compensation awards, which determine the shares included in diluted EPS but not in basic EPS. Weighted average shares outstanding are used in the computation of EPS, and the weighted average of shares outstanding is calculated to account for changes like stock splits, issuance of new shares, or buybacks. Earnings per share is an important financial ratio that provides insights into a company's profitability and is essential for investors in evaluating a company's performance.

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