STOCK COMPENSATION

12 Months Ended

Dec. 31, 2024

Share-Based Payment Arrangement [Abstract]

The Company maintains the 2024 Omnibus Incentive Plan (the “Plan”), which was approved by the Company’s stockholders on May 22, 2024 (the “Effective Date”). The Company’s stockholders previously approved the 2016 Omnibus Incentive Plan (the “Prior Plan”). After the Effective Date, no new awards may be granted under the Prior Plan, although awards granted under the Prior Plan prior to the Effective Date remain outstanding and remain subject to the terms and conditions of, and continue to be governed by, the Prior Plan. Under the Plan, the Company may grant stock options, share appreciation rights, restricted shares, restricted share units, share bonuses, other share-based awards, or cash awards, collectively referred to as “Awards.” The Company’s non-qualified stock options (“NQSOs”) are granted at exercise prices that are at least equal to the closing stock price on the date of grant. Under the Plan, 14.5 million shares are initially available for Awards, less (i) one share for every one share that was subject to an option or share appreciation right granted after March 26, 2024 under the Prior Plan and (ii) 2.7 shares for every one share that was subject to an award other than an option or share appreciation right granted after March 26, 2024 under the Prior Plan (such adjusted amount, the “Share Pool”). Under the Plan, any shares that are subject to options or share appreciation rights shall be counted against the Share Pool as one share for every one share granted, and any shares that are subject to awards other than options or share appreciation rights shall be counted against the Share Pool as 2.7 shares for every one share granted. Shares granted under either the Plan or the Prior Plan which are cancelled or forfeited are added back to the count of shares available for Awards. The number of shares available for grant under the Plan at December 31, 2024 is 16 million.

The amounts of stock-based compensation expense recorded in the Company’s Consolidated Statements of Operations were as follows:


	Year Ended December 31,
(in millions)	2024		2023		2022

Cost of products sold	$	3	$	4	$	3
Selling, general, and administrative expense	35		36		53
Research and development expense	2		4		3
Restructuring and other costs	(1)		2		—
Total stock-based compensation expense	$	39	$	46	$	59

Related deferred income tax benefit	$	7	$	8	$	7

The Company uses the Black-Scholes option-pricing model to estimate the fair value of each option awarded. The average assumptions used to determine compensation cost for the Company’s NQSOs issued were as follows:


	Year Ended December 31,
	2024			2023			2022

Weighted average fair value per NQSO	$	9.91		$	12.64		$	14.06
Expected dividend yield	1.92		%	1.45		%	1.09		%
Risk-free interest rate	4.28		%	4.27		%	2.23		%
Expected volatility	35.7		%	35.8		%	32.7		%
Expected life (years)	4.26			4.76			5.20

The total intrinsic value of NQSOs exercised for the years ended December 31, 2024 and 2023 was insignificant. The total intrinsic value of options exercised for the year ended December 31, 2022 was $1 million.

The NQSO transactions for the year ended December 31, 2024 were as follows:


	Outstanding					Exercisable					Expected to Vest
(in millions, except per share amounts)	Shares	Weighted Average Exercise Price		Aggregate Intrinsic Value		Shares	Weighted Average Exercise Price		Aggregate Intrinsic Value		Shares	Weighted Average Exercise Price		Aggregate Intrinsic Value

December 31, 2023	2.6	$	48.11	$	1	1.6	$	52.55	$	—	1.0	$	41.41	$	1
Granted	0.4	33.28

Exercised	—	30.60
Cancelled	(0.6)	52.12
Forfeited	(0.2)	36.63
December 31, 2024	2.2	$	45.37	$	—	1.4	$	50.27	$	—	0.8	$	37.06	$	—

There were 1 million NQSOs unvested at December 31, 2024. The remaining unamortized compensation cost related to NQSOs is $6 million, which will be expensed over the weighted average remaining vesting period of the options, which is 1.5 years.

The weighted average remaining contractual term of all outstanding options, exercisable options, and options expected to vest are 5.2 years, 3.9 years and 7.4 years, respectively.

Information about NQSOs outstanding as of December 31, 2024 is provided below:


			Outstanding				Exercisable
			Number Outstanding at December 31, 2024	Weighted Average Remaining Contractual Life (in years)	Weighted Average Exercise Price		Number Exercisable at December 31, 2024	Weighted Average Exercise Price
Range of Exercise Prices
(in millions, except per share amounts and life)



20.01	-	30.00	1.0	6.80	$	35.97	0.3	$	36.47
30.01	-	40.00	0.4	4.20	47.70		0.4	47.86
40.01	-	50.00	0.6	4.10	55.07		0.5	55.26
50.01	-	60.00	0.2	1.90	62.43		0.2	62.43

			2.2				1.4

The unvested RSUs for the year ended December 31, 2024 were as follows:


	Unvested Restricted Stock Units
	Shares	Weighted Average Grant Date Fair Value

(in millions, except per share amounts)

Unvested at December 31, 2023	3.6	$	42.95
Granted	2.4	32.10

Vested	(1.1)	39.48
Forfeited	(1.0)	39.35
Unvested at December 31, 2024	3.9	$	37.11

The weighted average grant date fair value of RSUs granted for the years ended December 31, 2023 and 2022 were $42.95 and $39.73, respectively. The unamortized compensation cost related to RSUs is $41 million, which will be expensed over the remaining weighted average restricted period of the RSUs, which is 1.7 years.

The total fair value of shares vested for the years ended December 31, 2024, 2023 and 2022 was $46 million, $42 million and $49 million, respectively.