At December 31, 2024, the Company had several stock-based compensation plans including a stock options plan, various cash-settled liability plans, and an employee share purchase plan. These plans resulted in an expense of $108 million in 2024 (2023 - $122 million; 2022 - $113 million) and the total tax benefit related to these plans was $26 million in 2024 (2023 - $27 million; 2022 - $26 million).


	Options outstanding			Non-vested options
	Number of stock options	Weighted-average exercise price		Number of stock options	Weighted-average grant date fair value
Outstanding, January 1, 2024	6,471,932	$	71.03	2,303,103	$	22.87
Granted	817,609	$	118.29	817,609	$	33.27
Exercised	(1,445,290)	$	48.29	N/A	N/A
Vested	N/A	N/A		(967,431)	$	20.45
Forfeited	(109,651)	$	116.48	(109,651)	$	32.26

Outstanding, December 31, 2024	5,734,600	$	86.59	2,043,630	$	27.68
Vested or expected to vest at December 31, 2024(1)	5,697,159	$	86.43	N/A	N/A
Exercisable, December 31, 2024	3,690,970	$	74.40	N/A	N/A

(1) As at December 31, 2024, the weighted-average remaining term of vested or expected to vest options was 3.2 years with an aggregate intrinsic value of $116 million.

The following table provides the number of stock options outstanding and exercisable as at December 31, 2024 by range of exercise price and their related intrinsic aggregate value, and for stock options outstanding, the weighted-average years to expiration. The table also provides the aggregate intrinsic value for in-the-money stock options, which represents the amount that would have been received by option holders had they exercised their options on December 31, 2024 at the Company’s closing stock price of $104.08.


	Options outstanding						Options exercisable
Range of exercise prices	Number of stock options	Weighted-average years to expiration	Weighted-average exercise price		Aggregate intrinsic value (millions)		Number of stock options	Weighted-average exercise price		Aggregate intrinsic value (millions)
$33.15 - $68.94	1,371,256	1.0	$	48.49	$	77	1,371,256	$	48.49	$	76
$68.95 - $91.73	1,479,444	2.7	$	80.21	$	35	1,222,834	$	78.30	$	32
$91.74 - $105.49	1,357,794	3.5	$	100.95	$	4	906,268	$	100.77	$	2
$105.50 - $121.28	1,526,106	5.6	$	114.24	$	—	190,612	$	110.51	$	—
Total(1)	5,734,600	3.2	$	86.59	$	116	3,690,970	$	74.40	$	110

(1) As at December 31, 2024, the total number of in-the-money stock options outstanding was 4,206,139 with a weighted-average exercise price of $74.40. The weighted-average years to expiration of exercisable stock options is 2.1 years.

Pursuant to the plan, stock options may be exercised upon vesting, which is between 12 and 48 months after the grant date, and expire seven years from the grant date. The grant date fair value of the stock options granted in 2024 was $27 million (2023 - $26 million; 2022 - $16 million). The following table provides assumptions used to determine the fair values of stock option awards, and the weighted-average grant date fair values for units granted in 2024, 2023 and 2022:


	2024			2023			2022
Expected option life (years)(1)	4.75			4.75			4.75
Risk-free interest rate(2)	3.88		%	3.35		%	1.62		%
Expected stock price volatility(3)	28.38		%	28.44		%	26.85		%
Expected annual dividends per share(4)	$	0.76		$	0.76		$	0.76
Expected forfeiture rate(5)	3.12		%	3.18		%	3.01		%
Weighted-average grant date fair value of options granted during the year	$	33.27		$	29.79		$	21.33

(1) Represents the period of time that awards are expected to be outstanding. Historical data on exercise behaviour or, when available, specific expectations regarding future exercise behaviour were used to estimate the expected life of the option.

(4) Determined by the current annual dividend at the time of grant. The Company does not employ different dividend yields throughout the contractual term of the option.

In 2024, the expense for stock options was $24 million (2023 - $25 million; 2022 - $23 million). At December 31, 2024, there was $10 million of total unrecognized compensation related to stock options, which is expected to be recognized over a weighted-average period of approximately 1.1 years.

During 2024, the Company issued 568,159 PSUs with a grant date fair value of $65 million and 25,589 PDSUs with a grant date fair value, including the fair value of expected future matching units, of $3 million. PSUs and PDSUs attract dividend equivalents in the form of additional units based on dividends paid on the Company's Common Shares, and vest three to four years after the grant date, contingent on the Company’s performance ("performance factor"). Vested PSUs are settled in cash. Vested PDSUs are converted into DSUs pursuant to the DSU plan, are eligible for a 25% Company match if the employee has not exceeded their Common Share ownership requirements, and are settled in cash only when the holder ceases their employment with the Company.

The performance period for all PSUs and PDSUs granted in 2024 is January 1, 2024 to December 31, 2026 and the performance factors are Free Cash Flow ("FCF"), annualized EBITDA, Total Shareholder Return ("TSR") compared to the S&P/TSX 60 Index, TSR compared to the S&P 500 Industrials Index, and TSR compared to Class I railways.

The performance period for 544,175 PSUs and all PDSUs granted in 2023 is January 1, 2023 to December 31, 2025 and the performance factors are FCF, EBITDA, TSR, compared to the S&P/TSX 60 Index, TSR compared to the S&P 500 Industrials Index, and TSR compared to Class I railways. The performance period for the other 347,236 PSUs granted in 2023 is April 28, 2023 to December 1, 2026 and the performance factors are EBITDA and TSR compared to Class I railways.

The performance period for all of the 415,660 PSUs and 13,506 PDSUs granted in 2022 is January 1, 2022 to December 31, 2024, and the performance factors are FCF, Adjusted net debt to Adjusted EBITDA Modifier, TSR compared to the S&P/TSX 60 Index, and TSR compared to the S&P 500 Industrials Index. The payout on these awards is 120% on 381,760 PSUs (including dividends reinvested) and 9,774 PDSUs (including dividends reinvested and matching units) outstanding, representing fair values of $49 million and $2 million, respectively, as at December 31, 2024, calculated based on the Company's average common share price of the last 30 trading days preceding December 31, 2024.

The performance period for all of the 431,430 PSUs and 12,694 PDSUs granted in 2021 was January 1, 2021 to December 31, 2023 and the performance factors were Return on Invested Capital, TSR compared to the S&P/TSX 60 Index, and TSR compared to Class I railways. The payout on these awards was 135% on 399,372 PSUs (including dividends reinvested) and 11,372 PDSUs (including dividends reinvested and matching units) outstanding, representing fair values of $54 million and $2 million, respectively, as at December 31, 2023, calculated based on the Company's average common share price of the last 30 trading days preceding December 31, 2023.


	2024	2023
Outstanding, January 1	1,678,553	1,336,358
Granted	593,748	917,744
Issued in lieu of dividends	12,843	10,845
Settled	(401,182)	(460,667)
PDSUs converted into DSUs	(11,461)	(45,058)
Forfeited	(128,768)	(80,669)
Outstanding, December 31	1,743,733	1,678,553

In 2024, the expense for PSUs and PDSUs was $72 million (2023 - $78 million; 2022 - $69 million). At December 31, 2024, there was $49 million of total unrecognized compensation related to these awards, which is expected to be recognized over a weighted-average period of approximately 1.5 years.

The Company established the DSU plan as a means to compensate and assist in attaining Common Share ownership targets set for certain key employees and Directors. A DSU entitles the holder to receive, upon redemption, a cash payment equivalent to the Company's average Common Share price based on the 10 trading days prior to redemption. DSUs vest over various periods of up to 36 months and are only redeemable for a specified period after employment is terminated.

Senior managers may elect to receive DSUs in lieu of annual cash bonuses under the bonus deferral program. In addition, senior managers will be granted a 25% Company match of DSUs when deferring cash to DSUs to meet ownership targets. The election to receive eligible payments in DSUs is no longer available to a participant when the value of the participant’s DSUs is sufficient to meet the Company’s Common Share ownership guidelines. Senior managers have five years to meet their ownership targets.


	2024	2023
Outstanding, January 1	899,818	744,530
Granted	71,082	85,750
PDSUs converted into DSUs	14,079	81,533
Issued in lieu of dividends	6,253	5,685
Settled	(82,624)	(15,935)
Forfeited	(5,554)	(1,745)
Outstanding, December 31	903,054	899,818

During 2024, the Company granted 71,082 DSUs with a grant date fair value of approximately $8 million. In 2024, the expense recovery for DSUs was $1 million (2023 - $10 million of expense; 2022 - $10 million of expense). At December 31, 2024, there was $1 million of total unrecognized compensation related to DSUs, which is expected to be recognized over a weighted-average period of approximately 1.9 years.

The Company has an employee share purchase plan whereby both employee and the Company contributions are used to purchase Common Shares on the open market for employees. The Company’s contributions are expensed over the one year vesting period. Under the plan, the Company matches $1 for every $3 contributed by employees up to a maximum employee contribution of 6% of annual salary.