Company: AOS
Filing Date: 2025-07-24
Form Type: 10-Q
Source: 0000091142-25-000100
Chunk: 17

Company: SMITH A O CORP
Filing Date: 2025-07-24
Form: 10-Q
Item: Part I, Item 8
Chunk 17
---
,822,116 Effect of dilutive stock options and share units853,550 1,134,309 840,935 1,126,443 Denominator for diluted earnings per share142,483,521 147,599,585 143,440,329 147,948,559 

8. Share Based Compensation

The Company adopted the A. O. Smith Combined Incentive Compensation Plan (the Incentive Plan) effective January 1, 2007, and the Incentive Plan was most recently reapproved by stockholders on April 15, 2020. The Incentive Plan is a continuation of the A. O. Smith Combined Executive Incentive Compensation Plan which was originally approved by stockholders in 2002. The number of shares available for granting of share based compensation at June 30, 2025 was 2,095,645. Upon vesting or exercise of share based compensation, shares are issued from treasury stock. Share Units Participants in the Incentive Plan may be awarded share units. Share units vest three years after the date of grant. The Company granted 211,010 and 194,668 share units under the Incentive Plan in the six months ended June 30, 2025 and 2024, respectively. The share units were valued at $13.8 million and $16.0 million at the date of issuance in 2025 and 2024, respectively, based on the price of the Company’s Common Stock at the date of grant. The share units are recognized as compensation expense ratably over the three-year vesting period. Included in share unit expense in the six months ended June 30, 2025 and 2024 was expense associated with accelerated vesting of share unit awards for certain employees who are retirement eligible or will become retirement eligible during the vesting period. Share based compensation expense attributable to share units of $1.8 million and $1.4 million was recognized in the three months ended June 30, 2025 and 2024, respectively. Share based compensation expense attributable to share units of $7.3 million and $9.2 million was recognized in the six months ended June 30, 2025 and 2024, respectively. Certain non-U.S.-based employees receive the cash value of the share price at the vesting date in lieu of shares. Unvested cash-settled awards are remeasured at each reporting period.A summary