Share-based compensation

9 Months Ended

Apr. 30, 2025

Share-Based Payment Arrangement [Abstract]

The Company grants share-based compensation awards that can be broadly characterized by the underlying vesting conditions as follows:

•Time vested, restricted stock units (“RSU”) vest over time. RSU awards granted prior to fiscal 2025 cliff vest, typically at the end of three years. RSU awards granted in fiscal 2025 will vest in equal, annual installments over three years. The fair value of these awards is based on the closing share price on the date of grant.

•Single metric performance stock units (“PSU”) typically vest following three-year performance cycles. The number of shares issued will vary based upon the Company’s performance against an adjusted operating profit measure. The fair value of the award is based on the closing share price on the date of grant.

•Multiple metric performance stock units granted to certain members of management (“PSU-EX”) typically vest following three-year performance cycles. The number of shares issued will vary based upon adjusted EPS growth (diluted), return on capital employed (“ROCE”) and relative total shareholder return (“rTSR”). The fair value of awards vesting based upon EPS growth (diluted) and ROCE are equal to the closing share price on the date of grant and the fair value of rTSR awards are determined using a Monte-Carlo simulation.

The following table summarizes the share-based incentive awards activity for the nine months ended April 30, 2025:


	Number of shares	Weighted average grant date fair value
Outstanding as of July 31, 2024	963,130	$135.82
RSU awards granted	123,789	190.30
PSU awards granted	164,349	188.69
PSU-EX granted	51,366	167.95
Share adjustments based on performance	(205,335)	131.00
Vested	(413,453)	134.49
Forfeited	(69,049)	159.34
Outstanding as of April 30, 2025	614,797	$163.48

The following table relates to RSU, PSU and PSU-EX awards activity:


			Nine months ended
			April 30,
(In millions, except per share amounts)			2025
Fair value of awards vested			$83
Weighted average grant date fair value per share granted			$186.14

The following table relates to all share-based compensation awards:


	Three months ended		Nine months ended
	April 30,		April 30,
(In millions)	2025	2024	2025	2024
Share-based compensation expense (within SG&A)	$9	$15	$22	$39
Income tax benefit	2	4	6	10

Total unrecognized share-based compensation expense for all share-based payment plans was $80 million at April 30, 2025, which is expected to be recognized over a weighted average period of 2.1 years.

Stock Options

In October 2024, the Company granted 65,760 stock options with an exercise price equal to the closing share price of the Company's common stock on the last trading day prior to the date of grant. These options vest and become exercisable over three years, in equal, annual installments beginning one year from the date of grant, and expire 10 years from the date of grant. The fair value of the Company's stock options was estimated on the date of grant using the Black-Scholes option-pricing model. Since the grant date, 2,043 options have been forfeited. The share-based compensation expense of these stock options is not material.