SHAREHOLDERS' EQUITY

3 Months Ended

Mar. 31, 2026

SHAREHOLDERS’ EQUITY

Share-Based Compensation

Performance share unit awards ("PSUs") consist of the right to shares of the Company's stock awarded to associates of the Company. PSUs vest upon the Company's Board of Director's approval of PSU metric achievement, generally in the first quarter after the conclusion of the three-year overall performance period. PSUs are granted at performance target of 100%.

For the three months ended March 31, 2026, the Company issued 41,610 Performance Share Units ("2026 PSUs"). The 2026 PSUs include two performance metrics: Return on Invested Capital weighted at 75% and Revenue Growth weighted at 25%. The payout for each performance metric ranges from 0% to 200%. The 2026 PSUs also include a 20% modifier (increase or decrease) based on relative Total Shareholder Return (“rTSR”) as compared to the S&P 900 Industrials index, which allows for up to a maximum 240% total payout. The 2026 PSUs are valued using a Monte Carlo simulation model as of the grant date. As set forth in the individual grant agreements, acceleration of vesting may occur under a change in control, death or disability. There are no voting rights with these instruments until vesting occurs and a share of stock is issued.

The Company recognized $8.0 million and $9.5 million in share-based compensation expense for the three months ended March 31, 2026 and March 31, 2025, respectively. The total income tax benefit recognized for share-based compensation expense was $5.3 million and $1.1 million for the three months ended March 31, 2026 and March 31, 2025, respectively. The Company recognizes compensation expense on grants of share-based compensation awards on a straight-line basis over the vesting period of each award.

During the three months ended March 31, 2026, the Company granted the following share-based incentive awards:


Award Type	Number of Awards	Weighted Average Grant-Date Fair Value


Restricted Stock Units	101,966	$	216.34
Performance Share Units	41,610	$	246.15