The Roper Technologies, Inc. 2021 Incentive Plan (“2021 Plan”) is a stock-based compensation plan used to grant incentive stock options, nonqualified stock options, restricted stock and restricted stock units (collectively “restricted stock awards”), stock appreciation rights, or equivalent instruments to Roper’s employees, officers, directors, and consultants. The 2021 Plan was approved by shareholders at the Annual Meeting of Shareholders on June 14, 2021. The 2021 Plan replaces the Roper Technologies, Inc. 2016 Incentive Plan, as amended (“2016 Plan”), and no additional grants will be made from the 2016 Plan. At December 31, 2024, 5.902 shares were available to grant under the 2021 Plan.

Under the Roper Technologies, Inc. Employee Stock Purchase Plan, as amended and restated (“ESPP”), employees in the U.S. and Canada are allowed to designate up to 10% of eligible earnings to purchase Roper’s common stock at a 10% discount on the lower of the closing price of the stock on the first and last day of each quarterly offering period. Common stock sold to employees pursuant to the ESPP may be either treasury stock, stock purchased on the open market, or newly issued shares.

Stock-based compensation expense is not allocated to our reportable segments, which are described further in Note 14. Stock-based compensation expense for the years ended December 31, 2024, 2023, and 2022, included as a component of “Selling, general and administrative expenses,” was as follows:

Stock Options – Stock options are granted at prices not less than 100% of market value of the underlying stock at the date of grant. Stock options typically vest over a period of three years from the grant date and expire 10 years after the grant date. The Company recorded $37.6, $38.0, and $38.1 of compensation expense relating to outstanding options during 2024, 2023, and 2022, respectively, as a component of corporate general and administrative expenses.

The Company estimates the fair value of its option awards using the Black-Scholes option valuation model. The stock volatility for each grant is measured using the weighted average of historical daily price changes of the Company’s common stock over the most recent period equal to the expected life of the grant. The expected term of options granted is derived from historical data to estimate option exercises and employee forfeitures, and represents the period of time that options granted are expected to be outstanding. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for the expected life of the option.


	2024	2023	2022
Weighted-average fair value ($)	173.21	130.23	116.55
Risk-free interest rate (%)	4.15	3.76	2.19
Expected option life (years)	5.73	5.61	5.63
Expected volatility (%)	25.54	26.05	24.59
Expected dividend yield (%)	0.51	0.63	0.55

The following table summarizes stock option activities, with respect to the Company’s share-based compensation plans, for the years ended December 31, 2024 and 2023:


	Number of options	Weighted-average exercise price		Weighted-average remaining contractual term (years)	Aggregate intrinsic value
Outstanding at December 31, 2022	2.985	$	312.34
Granted	0.383	$	432.77
Exercised	(0.593)	$	246.77
Canceled	(0.087)	$	425.80
Outstanding at December 31, 2023	2.688	$	340.89	6.00	$	549.1
Granted	0.286	$	553.79
Exercised	(0.422)	$	298.04
Canceled	(0.072)	$	468.72
Outstanding at December 31, 2024	2.480	$	368.57	5.37	$	384.4
Exercisable at December 31, 2024	1.688	$	316.77	4.03	$	342.9

At December 31, 2024, there was $55.3 of total unrecognized compensation expense related to nonvested options granted under the Company’s stock-based compensation plans. That cost is expected to be recognized over a weighted average period of 1.94 years. The total intrinsic value of options exercised in 2024, 2023, and 2022 was $108.9, $133.7, and $92.7, respectively. Cash received from option exercises under all plans in 2024, 2023, and 2022 was $125.7, $146.5, and $110.0, respectively.

Restricted Stock Awards – During 2024 and 2023, the Company granted 0.402 and 0.280 shares, respectively, of restricted stock awards to certain employee and director participants under its compensation plans. These awards were granted at the fair market value of the share on the date of grant. Restricted stock awards granted generally vest over a period of one to five years. The Company recorded $105.7, $83.3, and $77.6 of compensation expense related to outstanding shares of restricted stock awards held by employees and directors during 2024, 2023, and 2022, respectively.

During 2024, the Company revised its equity compensation strategy to more closely align long-term management incentives with its strategic objective to deliver and sustain higher levels of organic growth. Accordingly, the total number of restricted stock awards granted during 2024 increased as compared to 2023 due primarily to the adoption of a supplemental performance-based equity compensation program for the Company’s business unit leadership teams under which 0.137 incremental three-year performance-based restricted stock awards were granted.

In connection with the revised compensation strategy noted above, certain members of the Roper senior leadership team were granted 0.072 performance-based restricted stock awards during 2024, that include the ability to earn up to 200% of the number of restricted stock awards originally granted contingent upon Roper’s performance over a three-year period, subject to a market modifier based on the Company’s ranking of total shareholder return relative to the other companies within the Standard & Poor’s 500 Stock Index. Comparably, during 2023, 0.074 performance-based restricted stock awards were granted to certain members of Roper’s senior leadership team which did not contain a market modifier and do not have the ability to vest beyond 100% of the original shares granted.

Due to the extent of performance required by the vesting conditions noted above, these awards are not expected to materially increase stock-based compensation expense relative to the Company’s financial performance.

The Company uses a Monte Carlo simulation model to estimate the fair value of its performance-based restricted stock awards subject to a market modifier. The expected volatility is measured using daily logarithmic changes in the Company’s historical stock prices over the most recent period equal to the expected term. The expected term is the term remaining from the grant date to the end of the performance period. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for the expected term. The fair value of performance-based restricted stock awards subject to a market modifier granted in 2024 was determined using the following weighted average assumptions:


			2024
Weighted-average grant date fair value ($)			563.00
Risk-free interest rate (%)			4.30
Expected term (years)			2.80
Expected volatility (%)			20.12
Expected dividend yield (%)			0.50



	Number of shares	Weighted-average grant date fair value
Nonvested at December 31, 2022	0.445	$	416.00
Granted	0.280	$	439.72
Vested	(0.202)	$	406.36
Forfeited	(0.083)	$	434.87
Nonvested at December 31, 2023	0.440	$	431.96
Granted	0.402	$	552.94
Vested	(0.229)	$	445.87
Forfeited	(0.058)	$	522.46
Nonvested at December 31, 2024	0.555	$	515.77

At December 31, 2024, there was $113.8 of total unrecognized compensation expense related to nonvested restricted stock awards granted to both employees and directors under the Company’s compensation plans. That cost is expected to be recognized over a weighted average period of 1.75 years. The total grant date fair value of restricted stock awards vested during 2024, 2023, and 2022 was $102.2, $82.2, and $98.1, respectively.

Employee Stock Purchase Plan – During 2024, 2023, and 2022, participants of the ESPP purchased 0.038, 0.038, and 0.039 shares, respectively, of Roper’s common stock for total consideration of $18.5, $15.5, and $14.3, respectively. All of these shares were purchased from Roper’s treasury shares.