MARZETTI COMZTI
MARZETTI CO Stock Compensation Disclosure
Stock-Based Compensation
Our shareholders previously approved the Lancaster Colony Corporation 2015 Omnibus Incentive Plan (the “2015 Plan”). The 2015 Plan reserved 1,500,000 common shares for issuance to our employees and directors. All awards granted under this plan will be exercisable at prices not less than fair market value as of the date of the grant. The vesting period for awards granted under this plan varies as to the type of award granted, and the maximum term of these awards is seven years.
We recognize compensation expense over the requisite service period of the grant. Compensation expense is reflected in Cost of Sales or Selling, General and Administrative Expenses based on the grantees’ salaries expense classification. We estimate a forfeiture rate based on historical experience.
Stock-Settled Stock Appreciation Rights
Prior to 2022, we used periodic grants of stock-settled stock appreciation rights (“SSSARs”) as a vehicle for rewarding certain employees with long-term incentives for their efforts in helping to create long-term shareholder value. Our policy is to issue shares upon SSSARs exercise from new shares that had been previously authorized. The SSSARs we granted generally vested over a 3-year period whereby one-third vested on the first anniversary of the grant date, one-third vested on the second anniversary of the grant date and one-third vested on the third anniversary of the grant date. At June 30, 2025, there were no unvested SSSARs outstanding.
The following table summarizes our SSSARs compensation expense and tax benefits recorded for each of the years ended June 30:
| 2025 | 2024 | 2023 | |||||||||||||||
| Compensation expense | $ | — | $ | 1,038 | $ | 1,972 | |||||||||||
| Tax benefits | $ | — | $ | 90 | $ | 216 | |||||||||||
| Intrinsic value of exercises | $ | (18) | $ | 677 | $ | 3,873 | |||||||||||
The total fair values of SSSARs vested for each of the years ended June 30 were as follows:
| 2025 | 2024 | 2023 | |||||||||||||||
| Fair value of vested rights | $ | — | $ | 1,175 | $ | 2,611 | |||||||||||
The following table summarizes the activity relating to SSSARs granted under the plan for the year ended June 30, 2025:
| Number of Rights | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life in Years | Aggregate Intrinsic Value | ||||||||||||||||||||
| Outstanding at beginning of year | 39 | $ | 169.75 | ||||||||||||||||||||
| Exercised | (20) | $ | 163.69 | ||||||||||||||||||||
| Granted | — | $ | — | ||||||||||||||||||||
| Forfeited | — | $ | — | ||||||||||||||||||||
| Outstanding at end of year | 19 | $ | 175.76 | 2.56 | $ | 31 | |||||||||||||||||
| Exercisable and vested at end of year | 19 | $ | 175.76 | 2.56 | $ | 31 | |||||||||||||||||
| Vested and expected to vest at end of year | 19 | $ | 175.76 | 2.56 | $ | 31 | |||||||||||||||||
The following table summarizes information about the SSSARs outstanding by grant year at June 30, 2025:
| Outstanding | Exercisable | |||||||||||||||||||||||||||||||||||||
| Weighted Average | ||||||||||||||||||||||||||||||||||||||
| Grant Years | Range of Exercise Prices | Number Outstanding | Remaining Contractual Life in Years | Exercise Price | Number Exercisable | Weighted Average Exercise Price | ||||||||||||||||||||||||||||||||
| 2021 | $167.18-$177.99 | 18 | 2.62 | $177.40 | 18 | $177.40 | ||||||||||||||||||||||||||||||||
| 2020 | $153.71 | 1 | 1.66 | $153.71 | 1 | $153.71 | ||||||||||||||||||||||||||||||||
At June 30, 2025, there was no unrecognized compensation expense related to SSSARs.
Restricted Stock
We use periodic grants of restricted stock as a vehicle for rewarding our nonemployee directors and certain employees with long-term incentives for their efforts in helping to create long-term shareholder value.
In 2025, 2024 and 2023, we granted shares of restricted stock to various employees under the terms of the plan. The following table summarizes information relating to these grants:
| 2025 | 2024 | 2023 | |||||||||||||||
| Employees | |||||||||||||||||
| Restricted stock granted | 38 | 33 | 29 | ||||||||||||||
| Grant date fair value | $ | 7,292 | $ | 6,076 | $ | 4,448 | |||||||||||
| Weighted average grant date fair value per award | $ | 190.84 | $ | 185.05 | $ | 154.80 | |||||||||||
The restricted stock under these employee grants generally vests 3 years after the grant date. Under the terms of our grants, employees receive dividends on unforfeited restricted stock regardless of their vesting status.
In 2025, 2024 and 2023, we also granted shares of restricted stock to our nonemployee directors under the terms of the plan. The following table summarizes information relating to each of these grants:
| 2025 | 2024 | 2023 | |||||||||||||||
| Nonemployee directors | |||||||||||||||||
| Restricted stock granted | 6 | 5 | 4 | ||||||||||||||
| Grant date fair value | $ | 1,215 | $ | 920 | $ | 919 | |||||||||||
| Weighted average grant date fair value per award | $ | 200.28 | $ | 165.41 | $ | 203.34 | |||||||||||
The restricted stock under these nonemployee director grants generally vests 1 year after the grant date. All of the shares granted during 2025 are expected to vest. Dividends earned on the stock during the vesting period are paid to the directors at the time the stock vests.
The following table summarizes our restricted stock compensation expense and tax benefits recorded for each of the years ended June 30:
| 2025 | 2024 | 2023 | |||||||||||||||
| Compensation expense | $ | 5,673 | $ | 5,479 | $ | 4,432 | |||||||||||
| Tax benefits | $ | 859 | $ | 841 | $ | 677 | |||||||||||
The total fair values of restricted stock vested for each of the years ended June 30 were as follows:
| 2025 | 2024 | 2023 | |||||||||||||||
| Fair value of vested shares | $ | 5,125 | $ | 3,287 | $ | 4,996 | |||||||||||
The following table summarizes the activity relating to restricted stock granted under the plan for the year ended June 30, 2025:
| Number of Shares | Weighted Average Grant Date Fair Value | ||||||||||
| Unvested restricted stock at beginning of year | 80 | $ | 176.21 | ||||||||
| Granted | 44 | $ | 192.14 | ||||||||
| Vested | (28) | $ | 183.25 | ||||||||
| Forfeited | (6) | $ | 184.23 | ||||||||
| Unvested restricted stock at end of year | 90 | $ | 181.33 | ||||||||
At June 30, 2025, there was $7.1 million of unrecognized compensation expense related to restricted stock that we will recognize over a weighted-average period of 2 years.
Performance Units
Beginning in 2022, we use periodic grants of performance units as a vehicle for rewarding certain employees with long-term incentives for their efforts in helping to create long-term shareholder value. These performance units are based on two performance metrics, with equal weightings, as follows:
•a market condition based on relative total shareholder return versus the S&P 1500 Packaged Foods & Meats Index; and
•a performance condition based on revenue growth over the applicable performance period.
These performance units vest 3 years after the grant date and are settled in shares of common stock equal to the number of performance units granted multiplied by a percentage between 0% and 200% depending on the achievement of the above-noted performance metrics over the 3-year performance period. Our policy is to issue shares upon the vesting of performance units from new shares that had been previously authorized. Dividend equivalents earned during the vesting period are paid at the time the awards vest.
In 2025, 2024 and 2023, we granted performance units to various employees under the terms of the plan. The following table summarizes information relating to these grants:
| 2025 | 2024 | 2023 | |||||||||||||||
| Performance units granted | 25 | 25 | 26 | ||||||||||||||
| Grant date fair value | $ | 5,248 | $ | 4,745 | $ | 4,572 | |||||||||||
| Weighted average grant date fair value per award | $ | 206.54 | $ | 192.91 | $ | 173.73 | |||||||||||
For our performance units with a performance condition, the grant-date fair value is equal to the closing price of our common stock on the grant date. For our performance units with a market condition, the grant-date fair value is estimated using a Monte Carlo simulation. The assumptions used in the Monte Carlo simulation were as follows:
| 2025 | 2024 | 2023 | |||||||||||||||
| Risk-free interest rate | 3.72 | % | 4.60 | % | 3.18 | % | |||||||||||
| Dividend yield | 1.98 | % | 1.78 | % | 2.08 | % | |||||||||||
| Volatility factor of the expected market price of our common stock | 26.40 | % | 24.60 | % | 32.20 | % | |||||||||||
The following table summarizes our performance units compensation expense and tax benefits recorded for each of the years ended June 30:
| 2025 | 2024 | 2023 | |||||||||||||||
| Compensation expense | $ | 3,306 | $ | 4,842 | $ | 2,678 | |||||||||||
| Tax benefits | $ | 321 | $ | 620 | $ | 355 | |||||||||||
The following table summarizes information for our performance units that vested during the year ended June 30:
| 2025 | |||||
| Payout of revenue-based performance units | 174 | % | |||
| Payout of market-based performance units | 91 | % | |||
| Fair value of vested performance units | $ | 3,281 | |||
The following table summarizes the activity relating to performance units granted under the plan for the year ended June 30, 2025:
| Number of Units | Weighted Average Grant Date Fair Value | ||||||||||
| Unvested performance units at beginning of year | 62 | $ | 188.34 | ||||||||
| Granted | 25 | $ | 206.54 | ||||||||
| Vested | (16) | $ | 201.70 | ||||||||
| Forfeited | (6) | $ | 192.75 | ||||||||
| Unvested performance units at end of year | 65 | $ | 191.72 | ||||||||
At June 30, 2025, there was $4.4 million of unrecognized compensation expense related to performance units that we will recognize over a weighted-average period of 2 years.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Aug 21, 2025 | Showing above |
| 2024 | Aug 22, 2024 | |
| 2023 | Aug 23, 2023 | |
| 2022 | Aug 25, 2022 | |
About Stock Compensation Disclosures
Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.
Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.