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Share Plans | 12 Months Ended
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Dec. 31, 2024
Share-Based Payment Arrangement [Abstract] |
Share Plans | Share Plans Share-based compensation expense Total share-based compensation expense for 2024, 2023 and 2022 was as follows:
| December 31
In millions | 2024 | 2023 | 2022
Stock options | $ | 5.3 |  | $ | 4.3 |  | $ | 3.7 |
Restricted stock units | 16.1 |  | 15.0 |  | 14.6 |
Performance share units | 18.3 |  | 9.8 |  | 6.6 |
Total share-based compensation expense | $ | 39.7 |  | $ | 29.1 |  | $ | 24.9 |
Share incentive plans In May 2020, the Pentair plc 2020 Share and Incentive Plan (“2020 Share Plan”) was approved during the Annual General Meeting of Shareholders. The Pentair plc 2012 Stock and Incentive Plan (“2012 Stock Plan”) terminated upon the approval of the 2020 Share Plan, although awards outstanding under the 2012 Stock Plan continue in effect. Beginning May 5, 2020, all share-based compensation grants were made under the 2020 Share Plan. The 2020 Share Plan authorizes the issuance of 3.3 million of our ordinary shares, plus the number of shares reserved under the 2012 Stock Plan that were not the subject of outstanding awards as of the date the 2020 Share Plan became effective, which was 2.5 million shares, plus certain shares that would become available under the 2012 Stock Plan if it had remained in effect. The shares may be issued as new shares or from shares held in treasury. Our practice is to settle equity-based awards by issuing new shares. The 2020 Share Plan terminates on the date all shares reserved for issuance have been issued. The 2020 Share Plan allows for the granting to our employees, consultants and directors of stock options, stock appreciation rights, performance share units, restricted shares, restricted stock units, deferred stock rights, incentive awards, dividend equivalent units and other equity-based awards. The 2020 Share Plan is administered by our compensation committee (the “Committee”), which is made up of independent members of our Board of Directors. Employees eligible to receive awards under the 2020 Share Plan are managerial, administrative or professional employees. The Committee has the authority to select the recipients of awards, determine the type and size of awards, establish certain terms and conditions of award grants and take certain other actions as permitted under the 2020 Share Plan. The 2020 Share Plan prohibits the Committee from re-pricing awards or canceling and reissuing awards at lower prices. Non-qualified and incentive stock options Under the 2020 Share Plan, we may grant stock options to any eligible employee with an exercise price equal to the market value of the shares on the dates the options were granted. Options generally vest one-third each year over a period of three years commencing on the grant date and expire 10 years after the grant date. Restricted shares and restricted stock units Under the 2020 Share Plan, eligible employees may be awarded restricted shares or restricted stock units of our common stock. Restricted shares and restricted stock units generally vest one-third each year over a period of three years commencing on the grant date, subject to continuous employment and certain other conditions. Restricted shares and restricted stock units are valued at market value on the date of grant and are expensed over the vesting period. Stock appreciation rights, performance shares and performance units Under the 2020 Share Plan, the Committee is permitted to issue these awards which are generally contingent on the achievement of predetermined performance goals over a vesting period of three years. The Committee has the ability to adjust performance goals or modify the manner of measuring or evaluating a performance goal using its discretion. PSUs are granted to certain employees that vest based on the satisfaction of a service period of three years and the achievement of certain performance metrics over that same period. Upon vesting, PSU holders receive dividends that accumulate during the vesting period. The fair value of these PSUs is determined based on the closing market price of the Company’s ordinary shares at the date of grant. Compensation expense is recognized over the period an employee is required to provide service based on the estimated vesting of the PSUs granted. The estimated vesting of the PSUs is based on the probability of achieving certain performance metrics during the vesting period. Stock options The following table summarizes stock option activity under all plans for the year ended December 31, 2024:
Shares and intrinsic value in millions | Number of shares | Weighted- average exercise price | Weighted- average remaining contractual life (years) | Aggregate intrinsic value
Outstanding as of January 1, 2024 | 2.3 |  | $ | 45.07 |  |  |
Granted | 0.2 |  | 72.78 |  |  |
Exercised | (0.8) |  | 40.20 |  |  |
Outstanding as of December 31, 2024 | 1.7 |  | $ | 50.35 |  | 5.6 | $ | 86.8 |
Options exercisable as of December 31, 2024 | 1.2 |  | $ | 46.36 |  | 4.5 | $ | 67.2 |
Options expected to vest as of December 31, 2024 | 0.5 |  | $ | 60.38 |  | 8.3 | $ | 19.2 |
Fair value of options granted The weighted average grant date fair value of options granted under the 2020 Share Plan in 2024, 2023 and 2022 was estimated to be $24.84, $14.03 and $17.88 per share, respectively. The total intrinsic value of options that were exercised during 2024, 2023 and 2022 was $32.0 million, $5.3 million and $0.7 million, respectively. At December 31, 2024, the total unrecognized compensation cost related to stock options was $3.6 million. This cost is expected to be recognized over a weighted average period of 1.9 years. We estimated the fair value of each stock option award issued in the annual share-based compensation grant using a Black-Scholes option pricing model, modified for dividends and using the following assumptions:
| December 31
| 2024 |  | 2023 |  |  | 2022
Risk-free interest rate | 4.44 | % |  | 4.00 | % |  |  | 1.18 | %
Expected dividend yield | 1.43 | % |  | 2.02 | % |  |  | 1.14 | %
Expected share price volatility | 30.90 | % |  | 30.40 | % |  |  | 29.60 | %
Expected term (years) | 6.5 |  | 6.1 |  |  | 6.4
These estimates require us to make assumptions based on historical results, observance of trends in our share price, changes in option exercise behavior, future expectations and other relevant factors. If other assumptions had been used, share-based compensation expense, as calculated and recorded under the accounting guidance, could have been affected. We based the expected life assumption on historical experience as well as the terms and vesting periods of the options granted. For purposes of determining expected volatility, we considered a rolling average of historical volatility measured over a period approximately equal to the expected option term. The risk-free rate for periods that coincide with the expected life of the options is based on the U.S. Treasury Department yield curve in effect at the time of grant. Cash received from option exercises for the years ended December 31, 2024, 2023 and 2022 was $28.5 million, $16.0 million and $2.5 million, respectively. The tax benefit related to options exercised was $6.7 million, $1.0 million and $0.1 million for the years ended December 31, 2024, 2023 and 2022, respectively. Restricted stock units The following table summarizes restricted stock unit activity under all plans for the year ended December 31, 2024:
Shares in millions | Number of shares | Weighted average grant date fair value
Outstanding as of January 1, 2024 | 0.6 |  | $ | 53.88 |
Granted | 0.3 |  | 75.88 |
Vested | (0.3) |  | 54.93 |
Forfeited | (0.1) |  | 62.86 |
Outstanding as of December 31, 2024 | 0.5 |  | $ | 62.93 |
As of December 31, 2024, there was $18.4 million of unrecognized compensation cost related to restricted share compensation arrangements granted under the 2020 Plan and previous plans. That cost is expected to be recognized over a weighted-average period of 0.8 years. The total fair value of shares vested during the years ended December 31, 2024, 2023 and 2022, was $14.9 million, $17.6 million and $11.7 million, respectively. The tax benefit related to restricted stock units vested was $3.4 million, $2.7 million and $2.1 million for the years ended December 31, 2024, 2023 and 2022, respectively. Performance share units The following table summarizes performance share unit activity under all plans for the year ended December 31, 2024:
Shares in millions | Number of shares | Weighted average grant date fair value
Outstanding as of January 1, 2024 | 0.4 |  | $ | 54.06 |
Granted | 0.2 |  | 71.97 |
Vested | (0.2) |  | 52.41 |
Outstanding as of December 31, 2024 | 0.4 |  | $ | 59.68 |
The expense recognized each period is dependent upon our estimate of the number of shares that will ultimately be issued. As of December 31, 2024, there was $15.8 million of unrecognized compensation cost related to performance share compensation arrangements granted under the 2020 Plan and previous plans. That cost is expected to be recognized over a weighted-average period of 1.2 years. The tax benefits related to performance share units were $0.9 million for the years ended December 31, 2024 and 2023, and $0.3 million for the year ended December 31, 2022.

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