Equity-Based Compensation

12 Months Ended

Dec. 31, 2024

Share-Based Payment Arrangement, Noncash Expense [Abstract]

Equity-Based Compensation [Text Block]

Note 15 – Equity-Based Compensation

Williams’ Plan Information

The Williams Companies, Inc. 2007 Incentive Plan (the Plan) provides common-stock-based awards to both employees and nonmanagement directors. To date, 50 million new shares have been authorized for making awards under the Plan. The Plan permits the granting of various types of awards including, but not limited to, restricted stock units and stock options. At December 31, 2024, 17 million shares of common stock were reserved for issuance pursuant to existing and future stock awards, of which 9 million shares were available for future grants.

Additionally, up to 5.2 million new shares of Williams’ common stock have been authorized to date to be available for sale under Williams’ Employee Stock Purchase Plan (ESPP). Employees purchased 240 thousand shares at a weighted-average price of $33.00 per share during 2024. Approximately 0.7 million shares were available for purchase under the ESPP at December 31, 2024.

Williams recognizes compensation expense on employee stock-based awards on a straight-line basis; forfeitures are recognized when they occur. Operating and maintenance expenses and Selling, general, and administrative expenses in Williams’ Consolidated Statement of Income include equity-based compensation expense in 2024, 2023, and 2022 of $99 million, $77 million, and $73 million, respectively. Income tax benefit recognized related to the stock-based compensation expense in 2024, 2023, and 2022 was $24 million, $19 million, and $18 million, respectively. Measured but unrecognized stock-based compensation expense at December 31, 2024, was $70 million, all of which related to restricted stock units. These amounts are expected to be recognized over a weighted-average period of 1.7 years.

Nonvested Restricted Stock Units

At December 31, 2024 and 2023, Williams had restricted stock units outstanding, including performance-based shares, of 6.4 million shares and 6.6 million shares, respectively, with a weighted-average fair value of $32.48 and $28.34, respectively. During 2024 and 2023, Williams granted 3.1 million and 3.8 million shares of restricted stock units with a weighted-average fair value of $31.77 and $27.43, respectively. Restricted stock units generally vest after three years. Performance-based grants may vest at a range from zero percent to 200 percent of the original shares granted based on performance against a target. At December 31, 2024, there were 1.8 million performance-based shares outstanding.

Stock Options

There were no stock options granted in 2024, 2023, or 2022. At December 31, 2024, Williams had 0.4 million stock options that were both outstanding and exercisable, with a weighted-average exercise price of $29.99. The weighted-average remaining contractual life for stock options that were both outstanding and exercisable at December 31, 2024, was 2.4 years. Cash received for the exercise of stock options in 2024 and 2023 was $5 million and $2 million, respectively, and the related income tax benefit recognized in both 2024 and 2023 was $2 million.