Company: CL
Filing Date: 2025-02-13
Form Type: 10-K
Source: 0000021665-25-000008
Chunk: 32

Company: COLGATE PALMOLIVE CO
Filing Date: 2025-02-13
Form: 10-K
Item: Item 16
Chunk 32
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 and restricted stock units, based on the fair value of those awards at the date of grant. The fair value of restricted stock units, generally based on market price, is amortized ratably over the requisite service period. The estimated fair value of stock options on the date of grant, based on the Black-Scholes value described below, is amortized on a straight-line basis over the requisite service period for each separately vesting portion of the award. The Company accounts for forfeitures as they occur. Awards to employees eligible for retirement prior to the award becoming fully vested are recognized as compensation cost from the grant date through the date that the employee first becomes eligible to retire and is no longer required to provide service to earn the award.The Company has one incentive compensation plan pursuant to which it issues restricted stock units (both performance-based and time-vested) and stock options to employees and shares of common stock and stock options to non-employee directors. The Personnel and Organization Committee of the Board, which is comprised entirely of independent directors, administers the incentive compensation plan. The total stock-based compensation expense charged against pretax income for this plan was $135, $122 and $125 for the years ended December 31, 2024, 2023 and 2022, respectively. The total income tax benefit recognized on stock-based compensation, excluding excess tax benefits, was approximately $26, $22 and $25 for the years ended December 31, 2024, 2023 and 2022, respectively.Stock-based compensation expense is recorded within Selling, general and administrative expenses in the Corporate segment as these amounts are not included in internal measures of segment operating performance.The Company uses the Black-Scholes option pricing model to estimate the fair value of stock option awards. The weighted-average fair value assumptions are summarized in the following table:  202420232022Expected term of options6 years6 years6 yearsExpected volatility rate20.5 %19.8 %21.1 %Risk-free interest rate3.8 %4.3 %3.0 %Expected dividend yield2.1 %2.5 %2.4 %Weighted-average estimated fair value$22.65$14.89$14.71The weighted-average expected term of options granted each year was determined with reference to historical exercise and post-vesting cancellation experience, the vesting period of the awards and the contractual term of the awards, among other factors. Expected volatility incorporates