We continued to execute our balanced capital allocation in 2018 using cash flow from operations to fund our growth activities by making three strategic acquisitions and purchasing the remaining 40% noncontrolling interest of our toll processing joint venture in Mexico, investing in organic growth, and returning value to our stockholders through increased dividend payments and stock repurchases. In February 2018, we increased our quarterly dividend by 11.1% to $0.50 per share from $0.45 per share. We paid a total of $145.3 million in dividends to our stockholders in 2018. In February 2019, the Company increased the quarterly dividend by 10.0% to $0.55 per share. Since 2012, the Company’s quarterly dividend has more than tripled from $0.15 to $0.55 per share. We have increased our dividend 26 times since our 1994 IPO and have paid regular quarterly dividends to our stockholders for 59 consecutive years.
During 2018, we repurchased approximately 6.1 million shares of our common stock at an average cost of $79.94 per share, for a record total of $484.9 million. On October 23, 2018, our Board of Directors amended our share repurchase plan, increasing the total authorized number of shares available to be repurchased by 5.0 million and extending the duration of the plan through December 31, 2021. As of December 31, 2018, we had authorization under the plan to purchase approximately 7.0 million shares, or about 11% of our then outstanding shares. The Company expects to continue opportunistically repurchasing shares of its common stock in the future.
See “Management's Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K filed with the SEC on February 27, 2019 for a more detailed discussion of our results of operations in 2018 compared to 2017 and our financial condition.
Relationship Between Pay and Performance
A majority of our executive compensation is tied to performance through annual cash incentive awards and long-term equity incentive awards. We believe compensation of our NEOs in 2018 was aligned with operational performance in 2018. Management delivered industry-leading operating results, and the Company achieved multiple records, including record net sales, record annual gross profit dollars, record pretax income dollars and record earnings per diluted share of $8.75. Consistent with the delivery of such industry-leading results, each NEO received payments above target but below the maximum under each of the annual cash incentive plan and performance-based equity awards.
In 2018, our NEOs participated in our annual cash incentive plan which pays out only if the Company achieves certain levels of pretax income margin. Pretax income margin is calculated based on the Company’s annual income before income taxes as a percentage of net sales as adjusted for certain non-recurring items. If the Company achieves a pretax income margin within the range of 3.00% and 8.50%, with a target of 5.75%, then mathematical interpolation is applied to determine the actual incentive award. The Company’s pretax income margin increased from 6.0% to 7.5%, resulting in each NEO receiving a payment of 245% of their base salary.
Results for the performance-based equity awards granted in 2016 were determined in the first quarter of 2019 based on the three-year performance period ended December 31, 2018. Performance results (based on the Company’s return on assets) for the 2016 awards were also above target but below the maximum, resulting in 130% of the target number of awards vesting.
The Compensation Committee, in consultation with Pay Governance (the Compensation Committee’s independent executive compensation advisor) and with input from management believes that pretax income margin represents an appropriate metric for measuring the Company’s financial performance under the annual cash incentive plan as it aligns with how management and the Board measure the Company’s performance. Pretax income margin is typically the most important metric used in the Company’s corporate and operational decision-making. Since 2016, pretax income margin has been used as the financial metric for measuring the Company’s financial performance under the annual cash incentive plan and the Compensation Committee continues to believe that it is an appropriate metric to align pay opportunities with the Company’s financial