The Company’s stock compensation plan, approved by the Company’s stockholders and administered by the Compensation and Benefits Committee of the Board of Directors of the Company (the “CBC”), provides for the grant of incentive stock options, restricted stock, and other stock-based awards or units to key employees and directors. The plan, as amended, authorizes the grant of up to 11.0 million shares or units through April 2030. At December 31, 2024, approximately 4.2 million shares were available for future issuance under the plan.

The total compensation expense related to all grants awarded under the plan was $15.6 million in 2024, $13.1 million in 2023, and $10.2 million in 2022. The related income tax benefits recognized in earnings were $2.3 million in 2024, $2.0 million in 2023, and $1.9 million in 2022.

Stock options vest ratably (i.e. one-third annually) over the three years from the date of the grant. The cost of stock options, based on their fair value at the date of grant, is charged to expense over the respective vesting periods. Stock options normally become exercisable at a rate of one-third annually and in full on the third anniversary date. Under the plan, all options and rights must be exercised within ten years from date of grant. At the Company’s discretion, vested stock option holders are permitted to elect an alternative settlement method in lieu of purchasing common stock at the option price. The alternative settlement method permits the employee to receive, without payment to the Company, cash, shares of common stock or a combination thereof equal to the excess of market value of common stock over the option purchase price. The Company has historically settled all such options in common stock and intends to continue to do so. Stock options do not have voting or dividend rights until such time that the options are exercised and shares have been issued.

Dividend yields are based on historical dividend payments. Expected volatility is based on historical volatility of the Company’s common stock. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of the grant for periods corresponding with the expected life of the options. The expected life of options represents the weighted average period of time that options granted are expected to be outstanding giving consideration to vesting schedules and the Company’s historical exercise patterns.


	Option Shares			Weighted Average Exercise Price
(in millions, except per share data)	2024	2023	2022	2024		2023		2022
Outstanding, at beginning of year	1.0	1.2	1.4	$	31.65	$	27.40	$	23.58
Granted	0.1	0.1	0.2	82.58		51.81		35.80
Exercised	(0.1)	(0.3)	(0.4)	29.10		23.70		16.09
Canceled or expired	—	—	—	48.29		41.45		33.89
Outstanding, at end of year	1.0	1.0	1.2	$	36.58	$	31.65	$	27.40
Exercisable, at end of year	0.8	0.7	0.8	$	29.21	$	26.35	$	23.60

At December 31, 2024, options that have vested and are expected to vest totaled 1.0 million shares, with a weighted average exercise price of $36.49, and represent the sum of 0.8 million vested (or exercisable) options and 0.2 million options that are expected to vest. Options that are expected to vest are derived by applying the pre-vesting forfeiture rate assumption against outstanding, unvested options as of December 31, 2024.


	Options Outstanding				Options Exercisable
Range of Exercise Prices	Shares	Weighted Average Remaining Life	Weighted Average Exercise Price		Shares	Weighted Average Exercise Price
	(in millions)	(in years)			(in millions)
$10.01 — 15.00	0.1	1.3	$	12.66	0.1	$	12.66
15.01 — 20.00	0.1	2.0	16.87		0.1	16.87
20.01 — 25.00	0.1	3.4	23.14		0.1	23.14
25.01 — 30.00	0.2	4.8	27.59		0.2	27.59
35.01 — 40.00	0.2	7.3	35.80		0.1	35.80
40.01 — 45.00	0.1	6.2	42.86		0.1	42.86
50.01 — 55.00	0.1	8.3	51.81		0.1	51.81
80.01 — 85.00	0.1	9.3	82.31		—	—
	1.0	5.6	$	36.58	0.8	$	29.21

The aggregate intrinsic value of stock options outstanding and exercisable at December 31, 2024 was $56.7 million and $49.1 million, respectively. The total intrinsic value of stock options exercised was $6.5 million, $9.9 million, and $9.7 million for the years ended December 31, 2024, 2023, and 2022, respectively. The related tax benefits were $1.6 million, $2.4 million and $2.5 million for the years ended December 31, 2024, 2023 and 2022, respectively. Cash received from the exercise of stock options was $2.0 million, $3.9 million, and $0.2 million for the years ended December 31, 2024, 2023, and 2022, respectively.

The total compensation expense related to all stock option compensation plans was $2.3 million, $2.2 million, and $2.1 million for the years ended December 31, 2024, 2023, and 2022, respectively. As of December 31, 2024, there was $3.4 million of total unrecognized compensation cost related to stock options that is expected to be recognized over the weighted-average period of approximately 1.9 years.

Restricted stock awards and restricted stock units primarily cliff vest at the third anniversary from the date of grant, provided the recipient is still employed by the Company on the vesting date. The cost of restricted stock, based on the fair market value of the underlying shares determined using the closing market price on the date of grant, is charged to expense over the respective vesting periods. Shares associated with non-vested restricted stock awards have the same voting rights as the Company’s common stock and have non-forfeitable rights to dividends. Shares associated with non-vested restricted stock units do not have voting or dividend rights.


	Number of Restricted Shares	Weighted Average Price per Share
	(in millions)
Outstanding and non-vested, at December 31, 2021	0.2	$	32.15
Granted	0.2	35.60
Vested	(0.1)	28.35
Forfeited	—	34.99
Outstanding and non-vested, at December 31, 2022	0.3	$	34.93
Granted	—	52.76
Vested	(0.1)	30.44
Forfeited	—	39.23
Outstanding and non-vested, at December 31, 2023	0.2	$	43.03
Granted	0.1	83.69
Vested	(0.1)	43.83
Forfeited	—	44.68
Outstanding and non-vested, at December 31, 2024	0.2	$	53.18

The total compensation expense related to all restricted stock compensation plans was $3.9 million, $4.3 million, and $3.8 million for the years ended December 31, 2024, 2023, and 2022, respectively. As of December 31, 2024, there was $4.0 million of total unrecognized compensation cost related to restricted stock that is expected to be recognized over the weighted-average period of approximately 1.8 years.

In each of the three years in the period ended December 31, 2024, the Company granted performance-based restricted stock unit awards (“PSUs”) to certain executives and other non-executive officers. Performance targets associated with PSUs are set annually and approved by the CBC. At the Company’s discretion, actual payment of the awards earned shall be in cash or in common stock of the Company, or in a combination of both. The Company intends to settle all such awards by issuing shares of its common stock. Shares associated with non-vested PSUs do not have voting or dividend rights until issuance. The Company assesses the probability of vesting, based on expected achievement against these performance targets, on a quarterly basis.

The PSUs granted in 2024 have a three-year performance period ending December 31, 2026, in which the Company must achieve a certain cumulative EPS and a certain average return on invested capital (“ROIC”), which are performance conditions per ASC 718, Compensation — Stock Compensation (“ASC 718”). The percentage of shares earned under these two performance conditions may be subject to a further 20% modifier, for a maximum potential payout of 240% of target, determined by comparing the Company’s total stockholder return (“TSR”) over a multi-year performance period, relative to that of the S&P 600 Capital Goods Index. The TSR modifier, which is a market condition under ASC 718, will only apply if the Company’s TSR performance over the performance period is in the top or bottom quartile of the S&P 600 Capital Goods Index. If earned, these shares would vest on December 31, 2026.

The PSUs granted in 2023 have a three-year performance period ending December 31, 2025, in which the Company must achieve a certain cumulative EPS and a certain average ROIC, which are performance conditions per ASC 718. The percentage of shares earned under these two performance conditions may be subject to a further 20% modifier, for a maximum potential payout of 240% of target, determined by comparing the Company’s TSR over a multi-year performance period, relative to that of the S&P 600 Capital Goods Index. The TSR modifier, which is a market condition under ASC 718, will only apply if the Company’s TSR performance over the performance period is in the top or bottom quartile of the S&P 600 Capital Goods Index. If earned, these shares would vest on December 31, 2025.

The PSUs granted in 2022 had a three-year performance period ending December 31, 2024, in which the Company had to achieve a certain cumulative EPS and a certain average ROIC, which are performance conditions per ASC 718. The percentage of shares earned under these two performance conditions were subject to a further 20% modifier, for a maximum potential payout of 240% of target, determined by comparing the Company’s TSR over a multi-year performance period, relative to that of the constituent companies of the S&P 600 Capital Goods Index. The PSUs granted in 2022 became fully vested on December 31, 2024. Based on the achievement against targets over the three-year performance period, 190% of shares were earned under the two performance conditions. As the Company’s TSR performance over the performance period was in the top quartile of the S&P 600 Capital Goods Index, the TSR modifier was applied and the amount of shares earned was increased by a factor of 20%, resulting in 228% of the overall target shares being earned. The underlying shares will be issued to participants in the first quarter of 2025.

The cost of PSUs, based on their fair value, is charged to expense over the respective vesting periods, which is the three-year period ended December 31, 2024 for the 2022 grants, the three-year period ended December 31, 2025 for the 2023 grants, and the three-year period ended December 31, 2026 for the 2024 grants. As the PSUs granted in 2024, 2023, and 2022 contain a market condition, the Company utilized a Monte Carlo simulation model to determine the respective grant date fair values, using the following assumptions:


PSUs granted in 2024	Annual Expected Stock Price Volatility		Annual Expected Dividend Yield		Risk-Free Interest Rate		Correlation Between TSR for Federal Signal Corporation and the Applicable S&P Index
Federal Signal Corporation	26.9	%	0.6	%	4.8	%	40.9	%
Peer Group within S&P 600 Capital Goods Index	40.3	%	n/a		4.8	%	n/a


PSUs granted in 2023	Annual Expected Stock Price Volatility		Annual Expected Dividend Yield		Risk-Free Interest Rate		Correlation Between TSR for Federal Signal Corporation and the Applicable S&P Index
Federal Signal Corporation	29.8	%	0.8	%	3.6	%	48.0	%
Peer Group within S&P 600 Capital Goods Index	44.4	%	n/a		3.6	%	n/a


PSUs granted in 2022	Annual Expected Stock Price Volatility		Annual Expected Dividend Yield		Risk-Free Interest Rate		Correlation Between TSR for Federal Signal Corporation and the Applicable S&P Index
Federal Signal Corporation	34.4	%	1.0	%	2.8	%	52.3	%
Peer Group within S&P 600 Capital Goods Index	50.5	%	n/a		2.8	%	n/a

Compensation expense included in the Consolidated Statements of Operations for the PSUs in the years ended December 31, 2024, 2023, and 2022 was $9.4 million, $6.6 million, and $4.3 million, respectively. As of December 31, 2024, there was $6.7 million of total unrecognized compensation cost related to PSUs that is expected to be recognized over the weighted-average period of approximately 1.5 years.


	Number of PSUs	Weighted Average Price per Share
	(in millions)
Outstanding and non-vested, at December 31, 2021	0.2	$	34.87
Granted (a)	0.1	35.82
Vested	(0.1)	28.04
Forfeited	—	37.97
Outstanding and non-vested, at December 31, 2022	0.2	$	39.83
Granted (b)	0.1	51.31
Vested	(0.1)	42.85
Forfeited	—	42.19
Outstanding and non-vested, at December 31, 2023	0.2	$	44.23
Granted (c)	0.2	51.33
Vested	(0.3)	36.29
Forfeited	—	49.42
Outstanding and non-vested, at December 31, 2024	0.1	$	65.57