v3.24.2
Stock-Based Compensation
 9 Months Ended
Jun. 01, 2024
Share-Based Payment Arrangement [Abstract]  
Stock-Based Compensation Stock-Based Compensation
The Company accounts for all stock-based payments in accordance with Accounting Standards Codification Topic 718, “Compensation—Stock Compensation,” as amended. Stock-based compensation expense included in Operating expenses for the thirteen- and thirty-nine-week periods ended June 1, 2024 and June 3, 2023 was as follows:
Thirteen Weeks EndedThirty-Nine Weeks Ended
June 1,
2024		June 3,
2023		June 1,
2024		June 3,
2023
Stock options$— $— $— $101 
Restricted stock units (1)
3,414 3,827 11,466 11,495 
Performance share units (1)
(55)760 1,598 2,800 
Associate Stock Purchase Plan99 68 283 228 
Stock-based compensation expense3,458 4,655 13,347 14,624 
Deferred income tax benefit(891)(1,150)(3,234)(3,641)
Stock-based compensation expense, net$2,567 $3,505 $10,113 $10,983 
(1)Includes equity award acceleration costs associated with associate severance and separation, which are included in Restructuring and other costs in the unaudited Condensed Consolidated Statements of Income for the thirty-nine-week period ended June 1, 2024 and for the thirteen- and thirty-nine-week periods ended June 3, 2023. See Note 9, “Restructuring and Other Costs” for additional information.
Stock Options
Subsequent to the stock option grant in fiscal year 2019, the Company discontinued its grants of stock options. The fair value of each option grant in previous fiscal years was estimated on the date of grant using the Black-Scholes option pricing model.
A summary of the Company’s stock option activity for the thirty-nine-week period ended June 1, 2024 is as follows:
SharesWeighted-Average Exercise Price per ShareWeighted-Average Remaining Contractual Term (in
years)		Aggregate Intrinsic Value
Outstanding on September 2, 2023218$81.60 
Granted —— 
Exercised (110)80.34 
Canceled/Forfeited/Expired—— 
Outstanding on June 1, 2024108$82.89 1.3$325 
Exercisable on June 1, 2024108$82.89 1.3$325 
The aggregate intrinsic value of options exercised, which represents the difference between the exercise price and the market value of Class A Common Stock measured at each individual exercise date, during the thirty-nine-week periods ended June 1, 2024 and June 3, 2023 was $1,864 and $3,044, respectively. There were no unrecognized stock‑based compensation costs related to stock options at June 1, 2024.
Performance Share Units
In fiscal year 2020, the Company began granting performance share units (“PSUs”) as part of its long-term stock-based compensation program. PSUs cliff vest after a three-year performance period based on the achievement of specific
performance goals as set forth in the applicable award agreement. Based on the extent to which the performance goals are achieved, vested shares may range from 0% to 200% of the target award amount.
The following table summarizes all transactions related to PSUs under the MSC Industrial Direct Co., Inc. 2015 Omnibus Incentive Plan (the “2015 Omnibus Incentive Plan”) and the MSC Industrial Direct Co., Inc. 2023 Omnibus Incentive Plan (the “2023 Omnibus Incentive Plan”) (based on target award amounts) for the thirty-nine-week period ended June 1, 2024:
SharesWeighted-Average Grant Date Fair Value per Share
Non-vested PSUs at September 2, 2023112$81.81 
Granted4597.78 
PSU adjustment (1)
2374.79 
Vested (46)74.79 
Canceled/Forfeited(2)84.31 
Non-vested PSUs at June 1, 2024 (2)
132$88.39 

(1)PSU adjustment represents the net PSUs awarded above or below their target grants resulting from the achievement of performance goals above or below the performance targets established at grant. One grant goal was achieved at 200% of its target based on fiscal year 2021 through fiscal year 2023 financial results.
(2)Excludes approximately 6 shares of accrued incremental dividend equivalent rights on outstanding PSUs granted under the 2015 Omnibus Incentive Plan and the 2023 Omnibus Incentive Plan.
Restricted Stock Units
A summary of the Company’s non-vested restricted stock unit (“RSU”) award activity under the 2015 Omnibus Incentive Plan and the 2023 Omnibus Incentive Plan for the thirty-nine-week period ended June 1, 2024 is as follows:
SharesWeighted-Average Grant Date Fair Value per Share
Non-vested RSUs at September 2, 2023467$80.98 
Granted19198.13 
Vested (188)80.57 
Canceled/Forfeited (22)86.73 
Non-vested RSUs at June 1, 2024 (1)
448$88.20 
(1)Excludes approximately 32 shares of accrued incremental dividend equivalent rights on outstanding RSUs granted under the 2015 Omnibus Incentive Plan and the 2023 Omnibus Incentive Plan.
The fair value of each PSU and RSU is the closing stock price on the New York Stock Exchange of Class A Common Stock on the date of grant. PSUs are expensed over the three-year performance period of each respective grant and RSUs are expensed over the vesting period of each respective grant. Forfeitures of share-based awards are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from estimated forfeitures. The Company uses historical data to estimate pre-vesting PSU and RSU forfeitures and records stock-based compensation expense only for PSU and RSU awards that are expected to vest. Upon vesting, and, in the case of the PSUs, subject to the achievement of specific performance goals, a portion of the PSU and RSU awards may be withheld to satisfy the statutory income tax withholding obligation, and the remaining PSUs and RSUs will be settled in shares of Class A Common Stock. These awards accrue dividend equivalents on the underlying PSUs and RSUs (in the form of additional stock units) based on dividends declared on Class A Common Stock, and these dividend equivalents are paid to the award recipient in the form of unrestricted shares of Class A Common Stock on the vesting dates of the underlying PSUs and RSUs, subject, in the case of the dividend equivalents on the underlying PSUs, to the same performance vesting requirements. The
unrecognized stock-based compensation costs related to the PSUs and RSUs at June 1, 2024 were $4,122 and $30,128, respectively, which are expected to be recognized over a weighted-average period of 1.5 and 2.7 years, respectively.