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Stock Based Compensation | 12 Months Ended
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Dec. 31, 2025
Share-Based Payment Arrangement [Abstract] |
Stock Based Compensation | Stock Based Compensation The Company adopted the A. O. Smith Combined Incentive Compensation Plan (the Incentive Plan) effective January 1, 2007, and the Incentive Plan was most recently reapproved by stockholders on April 15, 2020. The Incentive Plan is a continuation of the A. O. Smith Combined Executive Incentive Compensation Plan which was originally approved by stockholders in 2002. The number of shares available for granting of options or share units at December 31, 2025, was 2,028,442 which includes 2,400,000 additional shares that were authorized on April 15, 2020 at the Company's annual meeting of stockholders. Upon stock option exercise or share unit vesting, shares are issued from treasury stock. Total stock based compensation expense recognized in 2025, 2024 and 2023 was $13.8 million, $14.9 million and $11.5 million, respectively. Stock Options Beginning in 2023, the Company no longer grants stock options. For active employees, all options granted expire ten years after the date of grant. Stock based compensation expense attributable to stock options for 2025, 2024 and 2023 was $0.1 million, $0.6 million and $1.2 million, respectively. Changes in options, all of which relate to the Company’s Common Stock, were as follows:
Years Ended December 31 | 2025 |  | 2024 |  | 2023
| Number of Options |  | Weighted Avg. Per Share Exercise Price |  | Number of Options |  | Weighted Avg. Per Share Exercise Price |  | Number of Options |  | Weighted Avg. Per Share Exercise Price
Number of shares under options: |  |  |  |  |  |  |  |  |  |  |
Outstanding at beginning of year | 1,395,841 |  |  | $ | 55.07 |  |  | 1,872,553 |  |  | $ | 52.93 |  |  | 2,481,606 |  |  | $ | 51.22 |
Exercised(1) | (83,712) |  |  | 39.60 |  |  | (473,452) |  |  | 46.46 |  |  | (600,344) |  |  | 45.68 |
Forfeited | (15,300) |  |  | 53.00 |  |  | (3,260) |  |  | 74.27 |  |  | (8,709) |  |  | 66.96 |
Outstanding at end of year(2) | 1,296,829 |  |  | 56.10 |  |  | 1,395,841 |  |  | 55.07 |  |  | 1,872,553 |  |  | 52.93 |
Exercisable at end of year(3) | 1,296,829 |  |  | 56.10 |  |  | 1,295,061 |  |  | 53.59 |  |  | 1,549,749 |  |  | 49.51 |
(1)The total intrinsic value of options exercised in 2025, 2024 and 2023 was $2.0 million, $18.0 million and $15.0 million, respectively. (2)The weighted average remaining contractual life of options outstanding was 5 years at December 31, 2025, 6 years at December 31, 2024 and 7 years at December 31, 2023, respectively. The aggregate intrinsic value of options outstanding at December 31, 2025 was $16.0 million. (3)The weighted average remaining contractual life of options exercisable was 5 years at December 31, 2025, and 6 years at December 31, 2024 and December 31, 2023, respectively. The aggregate intrinsic value of options exercisable at December 31, 2025 was $16.0 million.
| Number of Options |  | Weighted Avg. Per Share Exercise Price
Nonvested options at beginning of year | 100,780 |  |  | $ | 74.10 |
Vested | (100,780) |  |  | 74.10 |
Nonvested options at end of year | — |  |  | — |
Share Units Participants in the Incentive Plan may also be awarded share units. Share units vest three years after the date of grant. The Company granted 269,545, 195,497 and 168,807 share units under the Incentive Plan in 2025, 2024 and 2023, respectively. The share units were valued at $17.9 million, $16.1 million and $11.3 million at the date of issuance in 2025, 2024 and 2023, respectively, based on the price of the Company’s Common Stock at the date of grant. The share units are recognized as compensation expense ratably over the three-year vesting period; however, included in share unit expense was expense associated with accelerated vesting of share unit awards for certain employees who are retirement eligible or will become retirement eligible during the vesting period. Stock based compensation expense attributable to share units of $11.2 million, $12.5 million and $9.6 million was recognized in 2025, 2024 and 2023, respectively. Certain non-U.S.-based employees receive the cash value of the share price at the vesting date in lieu of shares. Unvested cash-settled awards are remeasured at each reporting period. A summary of share unit activity under the Incentive Plan is as follows:
| Number of Units |  | Weighted-Average Grant Date Value
Issued and unvested at January 1, 2025 | 469,269 |  |  | $ | 71.50 |
Granted | 269,545 |  |  | 66.28 |
Vested | (87,790) |  |  | 72.78 |
Forfeited | (19,717) |  |  | 70.21 |
Issued and unvested at December 31, 2025 | 631,307 |  |  | 68.92 |
Performance Stock Units Beginning in 2023, certain executives may be awarded performance stock units under the Incentive Plan. Performance stock units vest over three years following the date of the grant. Performance stock units vest under a set of measurement criteria which are based upon achievement of certain Sustainability targets. Potential payouts range from zero to 150 percent of the target awards and changes from target amounts are reflected as performance adjustments. The Company granted 38,435, 29,475 and 24,580 performance stock units under the Incentive Plan in 2025, 2024 and 2023, respectively. The performance stock units were valued at $2.5 million, $2.4 million and $1.7 million at the date of issuance in 2025, 2024 and 2023, respectively, based on the price of the Company’s Common Stock at the date of grant. The performance stock units are recognized as compensation expense ratably over the three-year vesting period. Stock based compensation expense attributable to performance stock units of $2.5 million, $1.8 million and $0.7 million was recognized in 2025, 2024 and 2023, respectively. Certain non-U.S.-based executives receive the cash value of the share price at the vesting date in lieu of shares. Unvested cash-settled awards are remeasured at each reporting period. A summary of stock unit activity under the Incentive Plan is as follows:
| Number of Units |  | Weighted-Average Grant Date Value
Issued and unvested at January 1, 2025 | 74,398 |  |  | $ | 75.40 |
Granted | 38,435 |  |  | 65.68 |
Forfeited | (3,131) |  |  | 70.78 |
Issued and unvested at December 31, 2025 | 109,702 |  |  | 72.12 |

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