The Company issues share-based compensation awards under the Zebra Technologies 2018 Long-Term Incentive Plan (“2018 Plan”), approved by shareholders in 2018 which superseded and replaced all prior share-based incentive plans. Outstanding awards issued prior to the 2018 Plan are governed by the provisions of those plans until such awards have been exercised, forfeited, cancelled, expired, or otherwise terminated in accordance with their terms. Awards available under the 2018 Plan include stock-settled awards, including stock-settled restricted stock units, stock-settled performance stock units, restricted stock awards, performance share awards, stock appreciation rights, incentive stock options, and non-qualified stock options. Awards available under the 2018 Plan also include cash-settled awards, including cash-settled stock appreciation rights, cash-settled restricted stock units, and cash-settled performance stock units. No awards remain available for future grants under previous plans.

The Company uses treasury shares as its source for issuing shares under the share-based compensation programs. As of December 31, 2024, the Company had 1,841,117 shares of Class A Common Stock remaining available to be issued under the 2018 Plan.

The compensation expense from the Company’s share-based compensation plans and associated income tax benefit, excluding the effects of excess tax benefits or shortfalls, are included in the Consolidated Statements of Operations as follows (in millions):


	Year Ended December 31,
Compensation costs and related income tax benefit	2024		2023		2022
Cost of sales	$	9	$	6	$	6
Selling and marketing	27		16		22
Research and development	36		25		34
General and administration	38		19		34
Total compensation expense	$	110	$	66	$	96
Income tax benefit	$	18	$	13	$	17

As of December 31, 2024, total unearned compensation cost related to the Company’s share-based compensation plans was $127 million, which will be recognized over the weighted average remaining service period of approximately 1.4 years.

The majority of the Company’s share-based compensation awards are generally issued as part of its employee and non-employee director incentive program during the second quarter of each fiscal year. The Company also issues awards associated with business acquisitions or other off-cycle events. The majority of the Company’s share-based compensation is comprised of stock-settled awards.

Beginning in 2021, the Company began issuing stock-settled restricted stock units (“stock-settled RSUs”) and stock-settled performance share units (“stock-settled PSUs”) for the majority of its share-based compensation awards. Prior to 2021, the Company primarily awarded restricted stock awards (“RSAs”) and performance share awards (“PSAs”). The Company’s awards are typically time-vested with stock-settled RSUs and RSAs vesting ratably in three annual installments and stock-settled PSUs and PSAs vesting at the end of the three-year period. No RSAs or PSAs were issued to employees in the current year.

Vesting for each participant is subject to restrictions, such as continuous employment, except in certain cases as set forth in each stock agreement. Upon vesting, stock-settled RSUs and PSUs convert to shares of Class A Common Stock that are released to participants. RSAs and PSAs are considered participating securities, and as such, are included as part of the Company’s Class A Common Stock outstanding at the time of grant.

Compensation cost for the stock-settled RSUs, stock-settled PSUs, RSAs, and PSAs is expensed over each participant’s required service period. Compensation cost is calculated as the fair market value of the Company’s Class A Common Stock on the grant date multiplied by the number of units or awards granted, net of estimated forfeitures. The expected attainment of the performance goals for the stock-settled PSUs and PSAs is reviewed at the end of each reporting period, with adjustments recorded to compensation expense in the Consolidated Statements of Operations, as necessary.

The Company issues RSAs to non-employee directors. The number of shares granted to each non-employee director is determined by dividing the value of the annual grant by the price of a share of the Company’s Class A Common Stock. New directors in any fiscal year earn a prorated amount. During fiscal 2024, there were 6,264 shares granted to non-employee directors compared to 6,640 and 5,686 during fiscal 2023 and 2022, respectively. The shares vest immediately upon grant.


	Year Ended December 31, 2024
	RSUs			PSUs			RSAs
	Units	Weighted-Average Grant Date Fair Value		Units	Weighted-Average Grant Date Fair Value		Shares	Weighted-Average Grant Date Fair Value
Outstanding at beginning of year	437,379	$	299.19	195,932	$	334.59	433	$	477.74
Granted	277,390	309.99		88,029	309.05		6,264	319.95
Released	(210,972)	322.67		(35,597)	482.42		(6,697)	330.15
Forfeited	(21,730)	293.83		(6,418)	304.52		—	—
Outstanding at end of year	482,067	$	295.39	241,946	$	304.44	—	$	—


	Year Ended December 31, 2023
	RSUs			PSUs			RSAs			PSAs
	Units	Weighted-Average Grant Date Fair Value		Units	Weighted-Average Grant Date Fair Value		Shares	Weighted-Average Grant Date Fair Value		Shares	Weighted-Average Grant Date Fair Value
Outstanding at beginning of year	242,732	$	404.19	105,928	$	406.89	46,971	$	271.92	35,246	$	245.79
Granted	336,168	260.31		104,620	258.57		6,640	271.77		—	—
Released	(95,837)	412.47		(64)	482.42		(51,695)	267.66		(35,171)	245.82
Forfeited	(45,684)	332.66		(14,552)	313.74		(1,483)	335.98		(75)	244.97
Outstanding at end of year	437,379	$	299.19	195,932	$	334.59	433	$	477.74	—	$	—


	Year Ended December 31, 2022
	RSUs			PSUs			RSAs			PSAs
	Units	Weighted-Average Grant Date Fair Value		Units	Weighted-Average Grant Date Fair Value		Shares	Weighted-Average Grant Date Fair Value		Shares	Weighted-Average Grant Date Fair Value
Outstanding at beginning of year	130,009	$	518.80	37,691	$	482.42	154,322	$	253.54	74,032	$	225.34
Granted	181,351	359.02		70,777	367.16		6,122	321.03		—	—
Released	(48,095)	518.64		(226)	482.42		(104,891)	248.36		(38,671)	206.62
Forfeited	(20,533)	463.11		(2,314)	410.80		(8,582)	259.93		(115)	244.62
Outstanding at end of year	242,732	$	404.19	105,928	$	406.89	46,971	$	271.92	35,246	$	245.79

SARs were previously granted primarily as part of the Company’s annual share-based compensation incentive program. Beginning in 2021, the Company no longer included SARs in its annual share-based compensation award issuances.

A summary of the Company’s SARs is as follows:


	2024			2023			2022
	SARs	Weighted-Average Grant Date Exercise Price		SARs	Weighted-Average Grant Date Exercise Price		SARs	Weighted-Average Grant Date Exercise Price
Outstanding at beginning of year	398,838	$	124.96	443,476	$	122.67	474,151	$	121.05
Granted	—	—		—	—		—	—
Exercised	(178,203)	103.05		(42,957)	99.39		(28,659)	88.35
Forfeited	—	—		(976)	244.15		(1,987)	229.46
Expired	(2)	86.80		(705)	78.54		(29)	205.12
Outstanding at end of year	220,633	$	142.57	398,838	$	124.96	443,476	$	122.67
Exercisable at end of year	220,633	$	142.57	385,305	$	120.35	400,351	$	110.14

The intrinsic value of SARs exercised during fiscal 2024, 2023 and 2022 was $39 million, $8 million and $8 million, respectively. The total fair value of SARs that vested during fiscal 2024, 2023 and 2022 was $1 million, $2 million and $3 million, respectively.

The Company also issues cash-settled share-based compensation awards, including cash-settled restricted stock units and cash-settled performance stock units that are classified as liability awards. These awards are expensed over the vesting period of the related award, which is typically three years. Compensation cost is calculated as the fair market value of the Company’s Class A Common Stock on the grant date multiplied by the number of share-equivalents granted, net of forfeitures. The fair value for all cash-settled awards and the expected attainment of the performance goals for the cash-settled performance stock units is reviewed at the end of each reporting period, with adjustments recorded to compensation expense in the Consolidated Statements of Operations, as necessary. Cash settlement is based on the fair value of share equivalents at the time of vesting, which was $13 million, $9 million and $5 million in 2024, 2023 and 2022, respectively. Share-equivalents issued under these programs totaled 59,266, 45,460 and 66,923 in fiscal 2024, 2023 and 2022, respectively.

Eligible Zebra employees may purchase common stock at 95% of the fair market value at the date of purchase pursuant to the Zebra Technologies Corporation 2020 Employee Stock Purchase Plan (“2020 ESPP”). Employees may make purchases by cash or payroll deductions up to certain limits. The aggregate number of shares that may be purchased under the 2020 ESPP is 1,500,000 shares. As of December 31, 2024, 1,304,693 shares remained available for future purchase.