v3.25.2
Stock-Based Compensation
12 Months Ended
Jul. 31, 2025
Share-Based Payment Arrangement, Noncash Expense [Abstract]  
Stock-Based Compensation
Note 13. Stock-Based Compensation
The Company recognizes compensation expense for all stock-based awards based on the grant date fair value of the award. Stock-based awards consist primarily of non-qualified stock options, performance-based awards, restricted stock awards and restricted stock units. Grants related to restricted stock awards and restricted stock units are immaterial. The Company issues treasury shares for stock options and performance-based awards.
Stock Options
The exercise price of options granted is equal to the market price of the Company’s common stock at the date of the grant. Options are generally exercisable for up to ten years from the date of grant and vest in equal increments over three years.
Pretax stock-based compensation expense associated with options was $16.1 million, $14.2 million and $12.4 million for the years ended July 31, 2025, 2024 and 2023, respectively.
Fair value is calculated using the Black-Scholes option pricing model. The weighted average fair value for options granted during the years ended July 31, 2025, 2024 and 2023 was $21.67, $19.00 and $15.67 per share, respectively.
The fair value of these awards was determined using the following inputs:
Year Ended July 31,
202520242023
Risk-free interest rate
3.6% - 4.5%
3.8% - 4.6%
3.8% - 4.2%
Expected volatility
26.1% - 27.0%
26.8% - 27.2%
26.8% - 27.5%
Expected dividend yield1.6 %1.6 %1.6 %
Expected life:
Director grants8 years8 years8 years
Officer grants7 years7 years7 years
Non-officer grants7 years7 years7 years
Option activity was as follows:
 OptionsWeighted
Average Exercise
Price
Balance outstanding as of July 31, 20246,163,056 $50.57 
Granted800,025 72.87 
Exercised(692,308)42.46 
Expired/forfeited(47,693)63.45 
Balance outstanding as of July 31, 20256,223,080 $54.24 
The total intrinsic value of options exercised during the years ended July 31, 2025, 2024 and 2023 was $20.2 million, $35.9 million and $20.2 million, respectively.
The number of shares authorized as of July 31, 2025 for outstanding options and future grants was 11,144,365. Forfeited options are recorded as an offset to operating expenses in the Consolidated Statements of Earnings in the period in which they occur.
Outstanding and exercisable stock options as of July 31, 2025 were as follows:
Range of Exercise PricesNumber
Outstanding
Weighted
Average
Remaining
Contractual
Life (Years)
Weighted
Average
Exercise
Price
Number
Exercisable
Weighted
Average
Remaining
Contractual
Life (Years)
Weighted
Average
Exercise
Price
$28.00 to $37.99
231,143 0.4$28.17 231,143 0.4$28.17 
$38.00 to $47.99
1,625,429 3.244.85 1,625,429 3.244.85 
$48.00 to $57.99
1,519,987 5.651.44 1,251,934 5.351.56 
$58.00 to $67.99
2,096,337 6.259.66 1,537,904 5.459.40 
$68.00 and above
750,184 9.273.13 1,629 8.772.68 
6,223,080 5.4$54.24 4,648,039 4.4$50.65 
As of July 31, 2025, the aggregate intrinsic value of stock options outstanding and exercisable was $111.2 million and $99.1 million, respectively.
For the year ended July 31, 2025, activity for non-vested stock options that contain vesting provisions was as follows:
OptionsWeighted
Average Grant
Date Fair
Value
Balance outstanding as of beginning of year1,657,970 $17.02 
Granted800,025 21.67 
Vested(835,261)16.24 
Forfeited(47,693)19.29 
Balance outstanding as of end of year1,575,041 $19.73 
As of July 31, 2025, there was $8.9 million of total unrecognized compensation expense related to non-vested stock options, which is expected to be recognized over the remaining vesting period during fiscal 2026, 2027 and 2028.
Performance-Based Awards
Performance-based awards are payable in common stock and are based on a formula that measures Company performance over a three year period. These awards are settled after three years with payouts ranging from 0% to 200% of the target award depending on achievement. Pretax performance-based awards expense was $5.7 million, $5.8 million and $6.3 million for the years ended July 31, 2025, 2024 and 2023, respectively.
The weighted average grant date fair value related to the Company’s performance-based awards was as follows:
Year Ended July 31,
202520242023
Weighted average grant date fair value$73.18 $59.66 $50.89 
Performance-based awards for non-vested activity were as follows:
Performance SharesWeighted
Average Grant
Date Fair
Value
Balance outstanding as of July 31, 2024
227,900 $55.31 
Granted111,900 73.18 
Vested(106,723)50.89 
Forfeited(35,393)64.39 
Balance outstanding as of July 31, 2025
197,684 $66.19 
As of July 31, 2025, there was $6.1 million of total unrecognized compensation expense related to non-vested performance-based awards, which is expected to be recognized over the remaining vesting period during fiscal 2026 and 2027. Forfeited performance-based awards are recorded as an offset to operating expenses in the Consolidated Statements of Earnings in the period in which they occur.