Company: AOS
Filing Date: 2025-04-29
Form Type: 10-Q
Source: 0000091142-25-000075
Chunk: 17

Company: SMITH A O CORP
Filing Date: 2025-04-29
Form: 10-Q
Item: Part I, Item 8
Chunk 17
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 vest three years after the date of grant. The Company granted 209,366 and 189,792 share units under the Incentive Plan in the three months ended March 31, 2025 and 2024, respectively. The share units were valued at $13.7 million and $15.6 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; however, included in share unit expense in the three months ended March 31, 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. Stock based compensation expense attributable to share units of $5.5 million and $7.8 million was recognized in the three months ended March 31, 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 as follows for the three months ended March 31, 2025:Number of UnitsWeighted-AverageGrant Date ValueIssued and unvested at January 1, 2025469,269 $71.50 Granted209,366 65.51 Vested(82,177)74.17 Forfeited(3,935)72.66 Issued and unvested at March 31, 2025592,523 68.83 Performance Stock UnitsBeginning in 2023, certain executives may be awarded performance stock units under the Incentive Plan. Performance stock units vest over three years following the date of the grant. Performance stock units vest under a set of measurement criteria which are based upon achievement of certain Sustainability targets. Potential payouts range from zero to 150% of the target awards and changes from target amounts are reflected as performance adjustments. The Company granted 35,365 and 28,390 performance stock units under the Incentive Plan in the three months ended March 31, 2025 and 2024, respectively. The performance stock units were valued at $2.3 million and $2.3 million at the date of issuance in 202