Company: AOS
Filing Date: 2025-10-28
Form Type: 10-Q
Source: 0000091142-25-000150
Chunk: 17

Company: SMITH A O CORP
Filing Date: 2025-10-28
Form: 10-Q
Item: Part I, Item 8
Chunk 17
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 Effect of dilutive stock options and share units941,557 1,122,944 874,905 1,125,265 Denominator for diluted earnings per share140,894,888 146,700,340 142,582,585 147,529,446 

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 September 30, 2025 was 2,043,675. 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 245,168 and 195,363 share units under the Incentive Plan in the nine months ended September 30, 2025 and 2024, respectively. The share units were valued at $16.1 million at the date of issuance in both 2025 and 2024, 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 nine months ended September 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 $2.1 million and $1.7 million was recognized in the three months ended September 30, 2025 and 2024, respectively. Share based compensation expense attributable to share units of $9.4 million and $10.9 million was recognized in the nine months ended September 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 of share unit activity under the Incentive Plan is