SHARE-BASED COMPENSATION PLANS

12 Months Ended

Dec. 31, 2024

Share-Based Payment Arrangement [Abstract]

The following table provides information on Share-based compensation expense and related income tax benefits recognized:



(In millions)	2024		2023		2022
Unvested stock awards	$	40	$	42	$	44
Stock option and employee stock purchase plans	2		2		2
Share-based compensation expense	42		44		46
Income tax benefit	(5)		(6)		(6)
Share-based compensation expense, net of tax	$	37	$	38	$	40

Total unrecognized pre-tax compensation expense related to share-based compensation arrangements as of December 31, 2024 was $38 million and is expected to be recognized over a weighted-average period of approximately 1.7 years. The total fair value of equity awards vested was $33 million, $41 million, and $31 million, during 2024, 2023, and 2022, respectively. The total cash received from employees under all share-based employee compensation arrangements, net of shares withheld for taxes, was $10 million, $2 million, and $14 million during 2024, 2023, and 2022, respectively.

Share-Based Incentive Awards

Share-based incentive awards are provided to employees under the terms of various share-based compensation plans (collectively, the Plans). The Plans are administered by the compensation committee of the board of directors and principally include grants of RSUs.

Restricted Stock Units

RSUs entitle the holder to receive one share of Ryder common stock for each RSU granted. Under the terms of our Plans, dividends on RSUs are paid only upon vesting of the award, and the amount of dividends paid is equal to the aggregate dividends declared on common shares during the period from the date of grant of the award until the date the shares underlying the award are delivered. The common stock underlying RSUs is not deemed issued or outstanding upon grant, and does not carry any voting rights. As of December 31, 2024, there are 7.8 million shares authorized for issuance under the Plans and 2.8 million shares remaining available for future grants.

RSUs granted to employees typically contain time-based vesting conditions, and in the case of certain senior executives also performance-based vesting conditions. Time-vested restricted stock rights (TVRSRs) typically vest ratably over three years for employees. The fair value of TVRSRs is determined and fixed based on Ryder’s stock price on the date of grant. Performance-based restricted stock rights (PBRSRs) are generally granted to executive management and include company specific performance-based vesting conditions. PBRSRs are awarded based on various revenue, return-based and cash flow performance targets and may include a total shareholder return (TSR) modifier. The fair values of the PBRSRs that include a TSR modifier are estimated using a lattice-based option-pricing valuation model that incorporates a Monte-Carlo simulation. Share-based compensation expense for PBRSRs is recognized on a straight-line basis over the vesting period, based upon the probability that the performance target will be met.

In 2024, 2023, and 2022, PBRSRs were awarded based on adjusted return on equity (ROE), strategic revenue growth (SRG), and free cash flow (FCF). Our TSR will be compared against the TSR of each of the companies in a custom peer group to determine our TSR percentile rank versus this custom peer group. The number of PBRSRs will then be adjusted based on this rank.

We also grant stock awards and RSUs to non-executive members of the board of directors. RSUs to new board members do not vest until the director has served a minimum of one year. After one year of service on the board of directors, each director may elect to receive his or her stock award in the form of either (1) shares that are distributed at the time of grant or (2) RSUs that are delivered upon or after separation from the board. The fair value of the awards is determined and fixed based on Ryder’s stock price on the date of grant. Share-based compensation expense is recognized for RSUs in the year the RSUs are granted to board members. Shares of Ryder common stock delivered upon grant have standard voting rights and rights to dividend payments.

The following is a summary of activity for RSUs as of and for the year ended December 31, 2024:


	Time-Vested (1)			Performance-Based (2)
(Shares in millions)	Shares	Weighted- Average Grant Date Fair Value		Shares	Weighted- Average Grant Date Fair Value
Unvested stock awards at January 1, 2024	0.7	$	75.55	0.4	$	82.11
Granted	0.2	119.22		0.1	121.10
Vested	(0.3)	76.41		(0.1)	69.73

Unvested stock awards at December 31, 2024	0.6	$	86.37	0.4	$	97.81

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(1) Includes RSUs granted to non-executive members of the board of directors.

(2) Performance-based awards are initially granted at target, assuming 100% payout.

Option Awards

Stock options are awards that allow employees to purchase shares of our stock at a fixed price in the future. Stock option awards are granted at an exercise price equal to the market price of our stock at the time of grant. These awards, which generally vest one-third each year, are fully vested three years from the grant date. Stock options have contractual terms of ten years.

We have not granted stock option awards since 2019. The fair value of each option award is estimated on the date of grant using a Black-Scholes-Merton option-pricing valuation model. We use historical data to estimate stock option forfeitures. The following table summarizes the activity related to our stock option awards:


(Option awards and aggregate intrinsic value in millions)	Number of Option Awards	Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value (1)
Outstanding and exercisable as of December 31, 2023	0.9	$	72.37	3.1	$	37

Exercised	(0.2)	87.64

Outstanding and exercisable as of December 31, 2024	0.7	$	67.33	2.5	$	58

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(1) The intrinsic value represents the amount by which the fair value of our stock price exceeds the option exercise price, multiplied by the number of in-the-money options.

Employee Stock Purchase Plan

We maintain an Employee Stock Purchase Plan (ESPP) that enables eligible employees in the U.S. and Canada to purchase full or fractional shares of Ryder common stock through payroll deductions of a specific dollar amount or up to 15% of eligible compensation during quarterly offering periods. The price is based on the fair market value of the stock on the last trading day of the quarter. Stock purchased under the ESPP must be held for 90 days or one year for officers.

The following table presents the shares purchased and the related weighted-average purchase price under the ESPP:



	2024 (1)		2023		2022
Shares purchased	120,000		152,000		171,000
Weighted average purchase price	$	114.84	$	82.81	$	65.50

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(1) As of December 31, 2024, there were 7.5 million shares authorized for issuance and 1.4 million shares remaining available to be purchased in the future.