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Stock-Based Compensation
 12 Months Ended
Oct. 31, 2025
Share-Based Payment Arrangement [Abstract]  
Stock-Based Compensation
9Stock-Based Compensation
On March 15, 2022, the company’s shareholders approved The Toro Company 2022 Equity and Incentive Plan (the “2022 Plan”), which became effective immediately and replaced The Toro Company Amended and Restated 2010 Equity and Incentive Plan, as amended (the “2010 Plan”) with respect to future grants of awards. The 2022 Plan is administered by the Compensation and Human Resources Committee of the Board of Directors and permits the grant of nonqualified and incentive stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance units, annual performance awards, non-employee director awards and other cash-based and stock-based awards to eligible individuals. Subject to adjustment as provided in the 2022 Plan, the maximum aggregate number of shares of the company’s common stock authorized for issuance under the 2022 Plan is equal to the sum of: (a) 1,250,000 shares, plus (b) the number of shares remaining available for grant under the 2010 Plan but not subject to outstanding awards thereunder as of March 15, 2022, and plus (c) the number of shares subject to awards outstanding under the 2010 Plan as of March 15, 2022 but only to the extent that such outstanding awards are forfeited, expire or otherwise terminate without the issuance of such shares. The number of unissued shares of common stock available for future stock-based compensation award grants under the 2022 Plan was 1,797,299 as of October 31, 2025. All outstanding stock-based compensation awards were granted under the 2010 Plan or the 2022 Plan. Shares of common stock issued upon the exercise, vesting, or settlement of stock options, restricted stock units, and performance shares are issued from treasury shares.
Compensation costs related to stock-based compensation awards were as follows (dollars in millions):
Fiscal Years Ended October 31202520242023
Stock option awards$8.8 $14.6 $8.5 
Performance share awards3.1 (0.2)2.9 
Restricted stock unit awards6.4 8.0 6.9 
Unrestricted common stock awards0.7 0.6 1.1 
Total compensation cost for stock-based compensation awards$19.0 $23.0 $19.4 
Related tax benefit from stock-based compensation awards$4.6 $5.6 $4.7 
Stock Option Awards
Stock options are granted with an exercise price equal to the closing price of the company's common stock on the date of grant, as reported by the New York Stock Exchange and are generally granted to executive officers, other employees, and non-employee Board members on an annual basis in the first quarter of the company's fiscal year but may also be granted throughout the fiscal year in connection with hiring, mid-year promotions, leadership transition, or retention, as needed and applicable. Options generally vest one-third each year over a three-year period and have a ten-year term but in certain circumstances, the vesting requirement may be modified such that options granted to certain employees vest in full on the three-year anniversary of the date of grant and have a ten-year term. Compensation cost equal to the grant date fair value determined under the Black-Scholes valuation method is generally recognized for these awards over the vesting period. Compensation cost recognized for other employees not considered executive officers or non-employee Board members is net of estimated forfeitures, which are determined at the time of grant based on historical forfeiture experience. Stock options granted to executive officers and other employees are subject to accelerated expensing if the option holder meets the retirement definition set forth in the applicable equity and incentive plan. In that case, the fair value of the options is expensed in the fiscal year of grant because generally, if the option holder is employed as of the end of the fiscal year in which the options are granted, such options will not be forfeited but continue to vest according to their schedule following retirement. Similarly, if a non-employee Board member has served on the company's Board for ten full fiscal years or more, the awards will not be forfeited but continue to vest according to their schedule following retirement. Therefore, the fair value of the options granted is fully expensed on the date of the grant.
The fair value of each stock option is estimated on the date of grant using various inputs and assumptions under the Black-Scholes valuation method. The expected life is a significant assumption as it determines the period for which the risk-free interest rate, stock price volatility, and dividend yield must be applied. The expected life is the average length of time in which executive officers, other employees, and non-employee Board members are expected to exercise their stock options, which is primarily based on historical exercise experience. The company groups executive officers and non-employee Board members for valuation purposes based on similar historical exercise behavior. Expected stock price volatility is based on the daily movement of the company's common stock over the most recent historical period equivalent to the expected life of the option. The risk-free interest rate for periods within the contractual life of the option is based on the U.S. Treasury rate over the expected life at the time of grant. The expected dividend yield is estimated over the expected life based on the company's
historical cash dividends paid, expected future cash dividends and dividend yield, and expected changes in the company's stock price.
The table below illustrates the weighted-average valuation assumptions used under the Black-Scholes valuation method for options granted in the following fiscal periods:
Fiscal Years Ended October 31202520242023
Expected life of option in years6.426.376.31
Expected stock price volatility28.08 %26.76 %25.20 %
Risk-free interest rate4.47 %3.95 %3.79 %
Expected dividend yield1.43 %1.15 %0.95 %
Per share weighted-average fair value at date of grant$25.52 $30.39 $33.21 
The table below presents stock option activity for fiscal 2025:
 Stock Option AwardsWeighted-Average Exercise PriceWeighted-Average
Contractual Life (years)		Aggregate Intrinsic
Value (dollars in millions)
Outstanding as of October 31, 20243,120,366 $83.69 5.3$23.8 
Granted378,970 80.11   
Exercised(188,737)47.53 
Forfeited(131,096)96.52   
Outstanding as of October 31, 20253,179,503 $84.88 4.8$11.5 
Exercisable as of October 31, 20252,433,329 $82.68 3.7$11.5 
As of October 31, 2025, there was $4.1 million of total unrecognized compensation cost related to unvested stock options that is expected to be recognized over a weighted-average period of 1.80 years.
The table below presents the total market value of stock options exercised and the total intrinsic value of options exercised during the following fiscal years (dollars in millions):
Fiscal Years Ended October 31202520242023
Market value of stock options exercised$14.4 $25.1 $43.4 
Intrinsic value of stock options exercised1
$5.4 $11.1 $22.8 
1    Intrinsic value is calculated as the amount by which the stock price at exercise date exceeded the option exercise price.
Performance Share Awards
The company grants performance share awards on an annual basis in the first quarter of the company's fiscal year to executive officers and other employees under which they are entitled to receive shares of the company's common stock contingent on the achievement of performance goals of the company, which are generally measured over a three-year period. The number of shares of common stock a participant receives can be increased (up to 200 percent of target levels) or reduced (down to zero) based on the level of achievement of performance goals and will vest at the end of a three-year period. Compensation cost is recognized for these awards on a straight-line basis over the vesting period based on the per share fair value, which is equal to the closing price of the company's common stock on the date of grant, and the probability of achieving each performance goal.
Factors related to the company's performance share awards are as follows (dollars in millions, except per award data):
Fiscal Years Ended October 31202520242023
Weighted-average fair value per award at date of grant$80.04 $99.60 $112.14 
Fair value of performance share awards vested$2.9 $7.7 $5.3 
The table below presents fiscal 2025 activity for unvested performance share awards:
 Performance SharesWeighted-Average Fair Value at Date of Grant
Unvested as of October 31, 2024206,672 $103.26 
Granted138,723 80.04 
Vested(29,836)98.41 
Forfeited(36,731)97.19 
Unvested as of October 31, 2025278,828 $91.43 
As of October 31, 2025, there was $6.5 million of total unrecognized compensation cost related to unvested performance share awards that is expected to be recognized over a weighted-average period of 2 years.
Restricted Stock Unit Awards
Restricted stock unit awards are generally granted on an annual basis to certain employees that are not executive officers and occasionally may be granted, including to executive officers, in connection with hiring, mid-year promotions, leadership transition, or retention. Restricted stock unit awards generally vest one-third each year over a three-year period, or vest in full on the three-year anniversary of the date of grant. In rare circumstances, such awards may have performance-based rather than time-based vesting requirements. Compensation cost equal to the grant date fair value, net of estimated forfeitures, is recognized for these awards over the vesting period. The grant date fair value is equal to the closing price of the company's common stock on the date of grant multiplied by the number of shares subject to the restricted stock unit awards and estimated forfeitures are determined on the grant date based on historical forfeiture experience.
Factors related to the company's restricted stock unit awards are as follows (dollars in millions, except per award data):
Fiscal Years Ended October 31202520242023
Weighted-average fair value per award at date of grant$74.81 $96.58 $103.40 
Fair value of restricted stock units vested$7.9 $7.7 $6.2 
The table below presents fiscal 2025 activity for unvested restricted stock units:
 Restricted Stock UnitsWeighted-Average Fair Value at Date
of Grant
Unvested as of October 31, 2024191,168 $97.58 
Granted149,011 74.81 
Vested(82,347)96.49 
Forfeited(16,670)94.90 
Unvested as of October 31, 2025241,162 $84.32 
As of October 31, 2025, there was $12.6 million of total unrecognized compensation cost related to unvested restricted stock units that is expected to be recognized over a weighted-average period of 2.36 years.
Unrestricted Common Stock Awards
During fiscal 2025, 2024, and 2023, 8,808, 7,544, and 10,329 shares, respectively, of fully vested unrestricted common stock awards were granted to certain Board members as a component of their compensation for their service on the Board and were recorded within selling, general and administrative expense in the Consolidated Statements of Earnings. Additionally, our Board members may elect to convert a portion or all of their calendar year annual retainers otherwise payable in cash into shares of the company's common stock.
Deferred Compensation Plan
The company maintains a deferred compensation plan that allows executive officers and certain other employees that receive performance share awards to defer receipt of shares of the company's common stock paid out under such awards to a date in the future. Participants can defer up to 100 percent of the common stock payout and are always 100 percent vested in their accounts. Common stock payout deferrals under this plan are held in a rabbi trust and treated in a manner similar to treasury shares and are recorded at cost within stockholders' equity in the Consolidated Balance Sheets as of October 31, 2025 and 2024. The total of common stock required to settle this deferred compensation obligation is included in the denominator of the calculation of both basic and diluted net earnings per share of common stock.