Share-Based Compensation

9 Months Ended

Mar. 31, 2025

Share-Based Payment Arrangement [Abstract]

14. Share-Based Compensation

We maintain Cardinal Health Inc. corporate stock incentive plans (collectively, the “Plans”) for the benefit of certain of our officers, directors and employees. As of March 31, 2025, we have 15 million shares authorized for issuance under the Plans. Upon vesting these units convert to common shares without restrictions or future service requirements.

The following tables provide total share-based compensation expense by type of award:


	Three Months Ended March 31,
(in millions)	2025		2024
Restricted share unit expense	$	18	$	20

Performance share unit expense	14		11
Total share-based compensation	$	32	$	31


	Nine Months Ended March 31,
(in millions)	2025		2024
Restricted share unit expense	$	54	$	58

Performance share unit expense	37		30
Total share-based compensation	$	91	$	88

The total tax benefit related to share-based compensation was $4 million for both the three months ended March 31, 2025 and 2024, and $11 million and $12 million for the nine months ended March 31, 2025 and 2024, respectively. Share-based compensation expense is included in selling, general and administrative expenses in the condensed consolidated statements of earnings. Our consolidated statements of cash flows present our share-based compensation expense as a reconciling adjustment between net income and net cash provided by operating activities for all periods presented.

Restricted Share Units

Restricted share units granted under the Plans generally vest in equal annual installments over three years. Restricted share units accrue cash dividend equivalents that are payable upon vesting of the awards.

The following table summarizes all transactions related to restricted share units under the Plans:


(in millions, except per share amounts)	Restricted Share Units	Weighted-Average Grant Date Fair Value per Share
Nonvested at June 30, 2024	1.7	$	70.98
Granted	0.7	108.20
Vested	(0.9)	71.74
Canceled and forfeited	(0.1)	93.05
Nonvested at March 31, 2025	1.4	$	85.45

The total fair value of units vested during the three months ended March 31, 2025 and 2024 were $3 million and $4 million, respectively. The total fair value of units vested during the nine months ended March 31, 2025 and 2024, were $67 million and $66 million, respectively.

At March 31, 2025, the total pre-tax compensation cost, net of estimated forfeitures, related to nonvested restricted share units not yet recognized was $79 million, which is expected to be recognized over a weighted-average period of two years.

Performance Share Units

Performance share units vest over a three-year performance period based on achievement of specific performance goals. Based on the extent to which the targets are achieved and our total shareholder return relative to the S&P 500 Health Care Index, vested shares may range from zero to 240 percent of the target award amount. Performance share units accrue cash dividend equivalents that are payable upon vesting of the awards.

The following table summarizes all transactions related to performance share units under the Plans (based on target award amounts):


(in millions, except per share amounts)	Performance Share Units	Weighted-Average Grant Date Fair Value per Share
Nonvested at June 30, 2024	1.3	$	97.03
Granted	0.5	113.88
Vested	(0.3)	108.79
Canceled and forfeited	—	—
Nonvested at March 31, 2025	1.5	$	99.53

No performance share units vested during the three months ended March 31, 2025 and 2024. The total fair value of units vested during the nine months ended March 31, 2025 and 2024, were $41 million and $24 million, respectively.

At March 31, 2025, the total pre-tax compensation cost, net of estimated forfeitures, related to nonvested performance share units not yet recognized was $53 million, which is expected to be recognized over a weighted-average period of two years if performance goals are achieved.

GIA Share-Based Compensation

GIA, a majority-owned subsidiary of Cardinal Health, maintains standalone share-based compensation plans. The fair value was estimated using the implied enterprise value based on the purchase price paid for the 73 percent ownership interest. Share-based compensation expense associated with these awards was $17 million for the three and nine months ended March 31, 2025, of which $16 million is included in acquisition-related cash and share-based compensation costs and $1 million is included in selling, general and administrative expenses in the condensed consolidated statements of earnings

In connection with the acquisition of physician practices, GIA issues common units in GIA (collectively the “Units”), to physicians. The Units contain forfeiture provisions ranging from 36 to 60 months. These forfeiture provisions provide that the physicians forfeit all or a portion of the Units should they leave GIA, except in certain limited situations, effectively requiring the physicians to stay employed with the physician practice managed by GIA in order to retain the Units. As such, the fair value of the

nonvested Units at the date of issuance is treated as equity compensation and recognized over the required service period. The Units were initially recognized by Cardinal Health as noncontrolling interests on the acquisition date at the fair value of the acquired shares in the amount of $168 million. As the Units vest, an increase to the carrying amount of the noncontrolling interests is recorded to reflect the change in ownership interest in GIA.

The following table summarizes the fair market value of GIA Units as of March 31, 2025:


(in millions, except per share amounts)	GIA Share Units	Weighted-Average Grant Date Fair Value per Share
Nonvested at January 30, 2025	115	$	1.46
Granted	16	1.46
Vested	(12)	1.46
Canceled and forfeited	—	—
Nonvested at March 31, 2025	119	$	1.46
Vested at March 31, 2025	618	$	1.46

The total fair value of units vested during the three and nine months ended March 31, 2025, was $17 million.

At March 31, 2025, the total pre-tax compensation cost, net of estimated forfeitures, related to nonvested Units not yet recognized was $174 million, which is expected to be recognized over a weighted-average period of approximately three years.