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Stock Compensation Plans | 12 Months Ended
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Dec. 31, 2024
Share-Based Payment Arrangement [Abstract] |
Stock Compensation Plans | STOCK COMPENSATION PLANS The Company has various equity plans under which its officers, senior management, other key employees and Board of Directors may be granted options to purchase IFF common stock or other forms of stock-based awards. The cost of all employee stock-based awards are principally recognized on a straight-line attribution basis over their respective vesting periods, net of estimated forfeitures. Total stock-based compensation expense included in the Consolidated Statements of Income (Loss) and Comprehensive Loss was as follows:
| December 31,
(DOLLARS IN MILLIONS) | 2024 |  | 2023 |  | 2022
Equity-based awards | $ | 77 |  |  | $ | 65 |  |  | $ | 49 |
Liability-based awards | 2 |  |  | 2 |  |  | 2 |
Total stock-based compensation | 79 |  |  | 67 |  |  | 51 |
Less: Tax benefit | (15) |  |  | (11) |  |  | (8) |
Total stock-based compensation, net of tax | $ | 64 |  |  | $ | 56 |  |  | $ | 43 |
The shareholders of the Company approved the Company’s Amended and Restated 2021 Stock Award and Incentive Plan on May 1, 2024 (the “2021 A&R SAIP”). The shareholders of the Company approved the Company’s 2021 Stock Award and Incentive Plan (the “2021 Plan”) on May 5, 2021. The 2021 Plan replaced the Company’s 2015 Stock Award and Incentive Plan (the “2015 Plan”) and the Company’s 2010 Stock Award and Incentive Plan (the “2010 Plan”), and provides the source for future deferrals of cash into deferred stock under the Company’s Deferred Compensation Plan (with the Deferred Compensation Plan being deemed a subplan under the 2010 Plan for the sole purpose of funding deferrals under the IFF Share Fund). Under the 2021 A&R SAIP, an additional 6,900,000 shares were authorized for issuance, bringing the total number shares authorized for issuance to 9,190,000. Under the 2021 Plan, a total of 2,290,000 shares were authorized for issuance. As of December 31, 2024, 2,286,169 shares were subject to outstanding awards and 6,993,732 shares remained available for future awards under all of the Company’s equity award plans (excluding shares not yet issued under open cycles of the Company’s Long-Term Incentive Plan). The Company offers a Long-Term Incentive Plan (“LTIP”) for senior management. Beginning 2023, the targeted payout for all new cycles is 100% IFF common stock at the end of the three-year cycle. The 2022-2024 cycle had a targeted payout of 50% cash and 50% IFF common stock at the end of the three-year cycle. For the 2022-2024 and 2023-2025 cycles, the LTIP awards are earned based on the achievement of: (i) 3-year cumulative Return on Invested Capital (“ROIC”) (representing one-half of the award value) and (ii) Relative Total Shareholder Return (“TSR”) targets (representing one-half of the award value). The ROIC measures adjusted net operating profit after tax against average invested capital. When the award is granted, 50% of the target dollar value of the award is converted to a number of “notional” shares based on the closing price at the beginning of the cycle. For those shares whose payout is based on Relative TSR, compensation expense is recognized using a graded-vesting attribution method, while compensation expense for the remainder of the performance shares (Leverage Ratio or ROIC targets for the applicable cycle) is recognized on a straight-line basis over the vesting period based on the probable outcome of the performance condition. For the 2024-2026 cycle, the LTIP awards are earned based on the achievement of: (i) the Company’s stock price appreciation based on the average of the highest 20 consecutive trading days over the 3-year cumulative period (“Stock Price Appreciation”) (representing 40% of the award value) (ii) Measurable savings related to organizational optimization programs & productivity programs (“Productivity Savings”) (representing 40% of the award value), and (iii) overall annual employee engagement survey results (“Employee Engagement”) (representing 20% of the award value). In addition, at the conclusion of the 3-year cycle, the final payout will be adjusted in accordance with a Performance Modifier based on the Company’s Relative TSR. If the Company’s Relative TSR for the 3-year cumulative period is at or above the 75th percentile or at or below the 25th percentile of the S&P 500 companies, the number of shares earned according to the performance metrics will be multiplied by 1.2x or 0.75x, respectively, for a maximum potential payout of 200% of target shares. If the Company’s relative TSR is between the 25th and 75th percentiles of the S&P 500 Companies, the Performance Modifier shall be determined on a straight-line interpolation basis. For the 2024-2026 cycle, when the award is granted, the target dollar value of the award is converted to a number of “notional” shares based on the 20-day trailing average closing price at the beginning of the cycle. For those shares whose payout is based on a performance metric (Productivity Savings and Employee Engagement targets), compensation expense is recognized on a straight-line basis over the vesting period based on the probable outcome of the performance condition. For those shares whose payout is based on Stock Price Appreciation, compensation expense is recognized using a graded-vesting attribution method. The 2020-2022 cycle concluded at the end of 2022 and no shares of common stock were issued in March 2023. The 2021-2023 cycle concluded at the end of 2023 and 5,333 shares of common stock were issued in March 2024. The 2022-2024 cycle concluded at the end of 2024 and approximately seven thousand shares of common stock will be issued in March 2025. In 2006, the Board of Directors approved the Equity Choice Program (the “Program”) for senior management. This program continued under the 2021 Plan. Eligible employees were allowed to choose from among three equity alternatives and were granted such equity awards up to certain dollar awards depending on the participant’s employment grade level. A participant was able to choose among (1) Stock-Settled Appreciation Rights (“SSARs”), (2) Restricted Stock Units (“RSUs”) or (3) PRSUs. Beginning 2023, the Company no longer offers the choice from among three equity alternatives and all eligible employees are granted RSUs. SSARs and Options SSARs are a contractual right to receive the value, in shares of Company stock, of the appreciation in our stock price from the grant date to the date the SSARs are exercised by the participant. SSARs granted become exercisable on the third anniversary of the grant date and have a maximum term of seven years. SSARs do not require a financial investment by the SSARs grantee. Stock options require the participant to pay the exercise price at the time they exercise their stock options. No SSARs were granted in 2024 or 2023. No stock options were granted in 2024, 2023 or 2022. SSARs and options activity was as follows:
(SHARE AMOUNTS IN THOUSANDS) | Shares Subject to SSARs/Options |  | Weighted Average Exercise Price |  | SSARs/ Options Exercisable
December 31, 2023 | 315 |  |  | $ | 116.26 |  |  | 194 |
Granted | — |  |  | — |  |  |
Exercised | (7) |  |  | 80.00 |  |  |
Canceled | (20) |  |  | 127.11 |  |  |
December 31, 2024 | 288 |  |  | $ | 116.45 |  |  | 197 |
Expected to Vest at December 31, 2024 | 91 |  |  | $ | 126.70 |  |  |
The weighted average exercise price of SSARs and options exercisable at December 31, 2024, 2023 and 2022 were $111.70, $109.59 and $109.50, respectively. SSARs and options outstanding at December 31, 2024 was as follows:
Price Range | Number Outstanding (in thousands) |  | Weighted Average Remaining Contractual Life (in years) |  | Weighted Average Exercise Price |  | Aggregate Intrinsic Value (in millions)
Over $65 | 288 |  |  | 3.69 |  | $ | 116.45 |  |  | $ | — |
SSARs and options exercisable as of December 31, 2024 was as follows:
Price Range | Number Exercisable (in thousands) |  | Weighted Average Remaining Contractual Life (in years) |  | Weighted Average Exercise Price |  | Aggregate Intrinsic Value (in millions)
Over $65 | 197 |  |  | 3.39 |  | $ | 111.70 |  |  | $ | — |
The total intrinsic value of options/SSARs exercised during 2024 was less than $1 million, less than $1 million for 2023, and approximately $2 million for 2022. As of December 31, 2024, the total unrecognized compensation cost related to non-vested SSARs granted was less than $1 million; such cost is expected to be recognized over a weighted average period of approximately 0.26 years. Restricted Stock Units The Company has granted RSUs to eligible employees and members of the Board of Directors. The Company has granted both time-based RSUs, which contain no performance criteria provisions, and performance-based RSUs. Such RSUs are subject to forfeitures or adjustments if certain conditions are not met, including service period or pre-established cumulative performance targets. RSUs principally vest 100% at the end of three years. An RSU’s fair value is calculated based on the market price of the Company’s stock at date of grant, with an adjustment to reflect the fact that such awards do not participate in dividend rights. The aggregate fair value is amortized to expense ratably over the vesting period. RSU activity was as follows:
(SHARE AMOUNTS IN THOUSANDS) | Number of Shares |  | Weighted Average Grant Date Fair Value Per Share
December 31, 2023 | 1,367 |  |  | $ | 101.50 |
Granted | 1,026 |  |  | 79.95 |
Vested | (513) |  |  | 106.97 |
Forfeited | (85) |  |  | 90.93 |
Change due to performance conditions, net | (10) |  |  | 125.82 |
December 31, 2024 | 1,785 |  |  | $ | 87.75 |
The total fair value of RSUs that vested during the year ended December 31, 2024 was approximately $55 million. As of December 31, 2024, there was approximately $79 million of total unrecognized compensation cost related to non-vested RSUs granted under the equity incentive plans; such cost is expected to be recognized over a weighted average period of approximately 1.87 years. Purchased Restricted Stock Units The grant of awards under the Program provided for eligible employees to purchase shares of IFF common stock and deposit them into an escrow account. For each share deposited in escrow by the eligible employee, the Company matched with the grant of a restricted stock unit. The shares of restricted stock units generally vest on the third anniversary of the grant date, are subject to continued employment and other specified conditions, and pay dividends if and when paid by the Company. Holders of restricted stock units have, in most instances, all of the rights of shareholders, except that they may not sell, assign, pledge or otherwise encumber such shares. PRSUs pay dividend equivalents and do not have voting rights. The following table summarizes the Company’s PRSU activity for the years ended December 31, 2024, 2023 and 2022:
(DOLLARS IN MILLIONS) | Issued Shares |  |  |  | Aggregate Purchases |  |  |  | Covered Shares
2024 | — |  |  |  |  | $ | — |  |  |  |  | — |
2023 | — |  |  |  |  | $ | — |  |  |  |  | — |
2022 | 43,690 |  |  |  |  | $ | 6 |  |  |  |  | 21,845 |
PRSU activity was as follows:
(SHARE AMOUNTS IN THOUSANDS) | Number of Shares |  | Weighted Average Grant Date Fair Value Per Share
December 31, 2023 | 61 |  |  | $ | 133.96 |
Granted | — |  |  | — |
Vested | (25) |  |  | 144.67 |
Forfeited | (3) |  |  | 127.41 |
December 31, 2024 | 33 |  |  | $ | 126.49 |
The total fair value of PRSUs that vested during the year ended December 31, 2024 was approximately $4 million. As of December 31, 2024, there was less than $1 million of total unrecognized compensation cost related to non-vested PRSUs granted under the equity incentive plans; such cost is expected to be recognized over a weighted average period of approximately 0.26 years. Liability Awards The Company has granted cash-settled RSUs (“Cash RSUs”) to eligible employees that are paid out 100% in cash upon vesting. Such RSUs are subject to forfeiture if certain conditions are not met. Cash RSUs principally vest 100% at the end of three years and contain no performance criteria provisions. A Cash RSU’s fair value is calculated based on the market price of the Company’s stock at the date of the closing period and is accounted for as a liability award. The aggregate fair value is amortized to expense ratably over the vesting period. Cash RSU activity was as follows:
(SHARE AMOUNTS IN THOUSANDS) | Cash RSUs |  | Weighted Average Fair Value Per Share
December 31, 2023 | 91 |  |  | $ | 80.97 |
Granted | 12 |  |  | 84.55 |
Vested | (44) |  |  | 84.71 |
Forfeited | (2) |  |  | 83.06 |
December 31, 2024 | 57 |  |  | $ | 84.55 |
The total fair value of Cash RSUs that vested during the year ended December 31, 2024 was approximately $4 million. As of December 31, 2024, there was approximately $1 million of total unrecognized compensation cost related to non-vested Cash RSUs granted under the equity incentive plans; such cost is expected to be recognized over a weighted average period of approximately 1.45 years. The aggregate compensation cost will be adjusted based on changes in the Company’s stock price.

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