Stock-Based Compensation | Note 8—Stock-Based Compensation For the three months ended September 30, 2022 and 2021, the Company’s Income from continuing operations before income taxes was reduced for stock-based compensation expense of $23.6 and $21.2 , respectively. In addition, for the three months ended September 30, 2022 and 2021, the Company recognized aggregate income tax benefits (associated with stock-based compensation) of , respectively, in Provision for income taxes in the accompanying Condensed Consolidated Statements of Income. These aggregate income tax benefits during the three months ended September 30, 2022 and 2021 include excess tax benefits of For the nine months ended September 30, 2022 and 2021, the Company’s Income from continuing operations before income taxes was reduced for stock-based compensation expense of $64.2 and $60.2 , respectively. In addition, for the nine months ended September 30, 2022 and 2021, the Company recognized aggregate income tax benefits (associated with stock-based compensation) of , respectively, in Provision for income taxes in the accompanying Condensed Consolidated Statements of Income. These aggregate income tax benefits during the nine months ended September 30, 2022 and 2021 include excess tax benefits of , respectively, from option exercises. The impact associated with recognizing excess tax benefits from option exercises in the provision for income taxes on our consolidated financial statements could result in significant fluctuations in our effective tax rate in the future, since the provision for income taxes will be impacted by the timing and intrinsic value of future stock-based compensation award exercises. Stock-based compensation expense includes the estimated effects of forfeitures, which are adjusted over the requisite service period to the extent actual forfeitures differ or are expected to differ from such estimates. Changes in estimated forfeitures are recognized in the period of change and impact the amount of expense to be recognized in future periods. The expense incurred for stock-based compensation plans is included in Selling, general and administrative expenses in the accompanying Condensed Consolidated Statements of Income. Stock Options In May 2017, the Company adopted the 2017 Stock Purchase and Option Plan for Key Employees of Amphenol and Subsidiaries (the “2017 Employee Option Plan”), which provided for the issuance of 60,000,000 shares. In March 2021, the Board authorized and approved the Amended and Restated 2017 Stock Purchase and Option Plan for Key Employees of Amphenol and Subsidiaries (the “Amended 2017 Employee Option Plan” and, together with the 2017 Employee Option Plan, the “2017 Option Plan”), which among other things, increased the number of shares reserved for issuance under the plan by 40,000,000 shares. The Amended 2017 Employee Option Plan was approved by the Company’s stockholders and became effective on May 19, 2021. As of September 30, 2022, there were shares of Common Stock available for the granting of additional stock options under the 2017 Option Plan. Prior to the approval of the 2017 Employee Option Plan, the Company issued stock options under the 2009 Stock Purchase and Option Plan for Key Employees of Amphenol and Subsidiaries, and its amendment (the “2009 Employee Option Plan”). 2017 2009 from the date of grant. Stock option activity for the three and nine months ended September 30, 2022 was as follows: Weighted Average Aggregate Weighted Remaining Intrinsic Average Contractual Value Options Exercise Price Term (in years) (in millions) Options outstanding at January 1, 2022 65,300,748 $ 42.00 6.47 $ 2,968.8 Options granted 532,721 85.92 Options exercised (646,759) 30.24 Options forfeited (136,140) 47.07 Options outstanding at March 31, 2022 65,050,570 42.46 6.27 2,145.0 Options granted 6,389,410 67.59 Options exercised (819,522) 27.16 Options forfeited (182,370) 48.89 Options outstanding at June 30, 2022 70,438,088 44.91 6.41 1,420.3 Options granted 143,393 65.90 Options exercised (2,058,799) 35.00 Options forfeited (81,380) 50.00 Options outstanding at September 30, 2022 68,441,302 $ 45.24 6.22 $ 1,501.6 Vested and non-vested options expected to vest at September 30, 2022 65,484,627 $ 44.84 6.14 $ 1,463.0 Exercisable options at September 30, 2022 41,460,615 $ 38.30 5.04 $ 1,188.2 A summary of the status of the Company’s non-vested options as of September 30, 2022 and changes during the three and nine months then ended is as follows: Weighted Average Fair Value at Options Grant Date Non-vested options at January 1, 2022 31,380,283 $ 8.34 Options granted 532,721 17.97 Options vested (59,200) 10.69 Options forfeited (136,140) 7.68 Non-vested options at March 31, 2022 31,717,664 8.50 Options granted 6,389,410 16.68 Options vested (10,914,950) 7.16 Options forfeited (182,370) 8.37 Non-vested options at June 30, 2022 27,009,754 10.98 Options granted 143,393 16.60 Options vested (99,080) 6.60 Options forfeited (73,380) 9.87 Non-vested options at September 30, 2022 26,980,687 $ 11.03 During the three and nine months ended September 30, 2022 and 2021, the following activity occurred under the Company’s option plans: Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Total intrinsic value of stock options exercised $ 82.2 $ 108.1 $ 151.4 $ 246.5 Total fair value of stock options vested 0.7 0.6 79.4 71.4 As of September 30, 2022, the total compensation cost related to non-vested options not yet recognized was approximately $243.7 with a weighted average expected amortization period of 3.54 years. The grant-date fair value of each option grant under the 2009 Employee Option Plan and the 2017 Option Plan is estimated using the Black-Scholes option pricing model. The grant-date fair value of each share grant is determined based on the closing share price of the Company’s Common Stock on the date of the grant. The fair value is then amortized on a straight-line basis over the requisite service period of the awards, which is generally the vesting period. Use of a valuation model for option grants requires management to make certain assumptions with respect to selected model inputs. Expected share price volatility is calculated based on the historical volatility of the Common Stock and implied volatility derived from related exchange traded options. The average expected life is based on the contractual term of the option and expected exercise and historical experience. The risk-free interest rate is based on U.S. Treasury zero-coupon issuances with a remaining term equal to the expected life assumed at the date of grant. The expected annual dividend per share is based on the Company’s dividend rate. Restricted Stock In 2012, the Company adopted the 2012 Restricted Stock Plan for Directors of Amphenol Corporation (the “2012 Directors Restricted Stock Plan”). The 2012 Directors Restricted Stock Plan is administered by the Board. As of September 30, 2022, the number of restricted shares available for grant under the 2012 Directors Restricted Stock Plan was . Restricted shares granted under the 2012 Directors Restricted Stock Plan vest on the earlier of the first anniversary of the date of grant or the day immediately prior to the date of the next regular annual meeting of the Company’s stockholders following such date of grant. Grants under the 2012 Directors Restricted Stock Plan entitle the holder to receive shares of the Company’s Common Stock without payment. Restricted share activity for the three and nine months ended September 30, 2022 was as follows: Weighted Average Remaining Restricted Fair Value at Amortization Shares Grant Date Term (in years) Restricted shares outstanding at January 1, 2022 21,061 $ 66.92 0.38 Restricted shares granted — — Restricted shares outstanding at March 31, 2022 21,061 66.92 0.13 Shares vested and issued (21,061) 66.92 Restricted shares granted 21,312 67.59 Restricted shares outstanding at June 30, 2022 21,312 67.59 0.88 Restricted shares granted — — Restricted shares outstanding at September 30, 2022 21,312 $ 67.59 0.62 As of September 30, 2022, the total compensation cost related to non-vested restricted shares not yet recognized was approximately $0.9 (with a weighted average expected amortization period of 0.62 years). |