v3.25.4

Stock-Based Compensation | 12 Months Ended
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Dec. 31, 2025
Share-Based Payment Arrangement [Abstract] |
Stock-Based Compensation | NOTE 18. STOCK-BASED COMPENSATION In connection with the Separation and the related employee matters agreement, the Company adopted the 2020 Stock Incentive Plan (the “Stock Plan”) that became effective upon the Separation. Outstanding equity awards of Fortive held by the Company’s employees at the separation date were converted into or replaced with Vontier equity awards (the “Conversion Awards”). The Stock Plan provides for the grant of stock appreciation rights, RSUs, PSUs, performance based restricted stock awards and performance stock awards (collectively, “Stock Awards”), stock options or any other stock-based award. A total of 17.0 million shares of the Company’s common stock have been authorized for issuance under the Stock Plan and as of December 31, 2025, approximately 8.0 million shares remain available for issuance under the Stock Plan. Stock options under the Stock Plan generally vest pro rata over a five-year period and terminate 10 years from the grant date, though the specific terms of e ach grant are determined by the Compensation Committee of the Company’s Board of Directors. The Company’s executive officers, certain other employees and non-employee directors may be awarded stock options with different vesting criteria. Exercise prices for stock options granted under the Stock Plan were equal to the closing price of Vontier’s common stock on the NYSE on the date of grant, while stock options issued as Conversion Awards were priced to maintain the economic value before and after the Separation. RSUs granted to employees under the Stock Plan generally provide for time-based vesting over three years, although certain employees may be awarded RSUs with different time-based vesting criteria. RSUs granted to non-employee directors under the Stock Plan vest on the earlier of the first anniversary of the grant date or the date of, and immediately prior to, the next annual meeting of stockholders following the grant date. Prior to vesting, RSUs granted under the Stock Plan do not have dividend equivalent rights, do not have voting rights and the shares underlying the RSUs are not considered issued or outstanding. PSUs granted under the Stock Plan during the years ended December 31, 2025 and 2024 vest based 50% on the Company’s adjusted operating profit margin expansion and 50% based on core revenue growth, modified by the Company’s total shareholder return relative to the S&P 500 Index, over a three-year performance period. PSUs granted under the Stock Plan during the year ended December 31, 2023 vest based on the Company’s adjusted earnings per share, modified by the Company’s total shareholder return relative to the S&P 500 Index, over a three-year performance period. Stock awards generally vest only if the employee is employed (or in the case of directors, the director continues to serve on the Board) on the vesting date. To cover the exercise of stock options and vesting of RSUs and PSUs, the Company generally issues shares authorized but previously unissued. Stock-based Compensation Expense Stock-based compensation has been recognized as a component of Selling, general and administrative expenses in the accompanying Consolidated Statements of Earnings and Comprehensive Income. The amount of stock-based compensation expense recognized during a period is based on the portion of the awards that are ultimately expected to vest. Pre-vesting forfeitures are estimated at the time of grant by analyzing historical data and are revised in subsequent periods if actual forfeitures differ from those estimates. Stock-based compensation expense related to stock options, restricted stock units and performance stock units granted under the Stock Plan and subsidiary stock plan further discussed below was $30.1 million, $31.6 million and $31.5 million during the years ended December 31, 2025, 2024 and 2023, respectively, which was reduced by the related tax benefit of $5.0 million, $5.8 million and $5.5 million, respectively. The following summarizes the unrecognized compensation cost for the Stock Plan awards as of December 31, 2025. This compensation cost is expected to be recognized over a weighted average period of approximately 1.7 years, representing the remaining service period related to the awards. Future compensation amounts will be adjusted for any changes in estimated forfeitures:
($ in millions) |
Stock Awards | $ | 36.0 |
Stock options | 0.5 |
Total unrecognized compensation cost | $ | 36.5 |
Stock Options The following summarizes option activity under the Stock Plan for the years ended December 31, 2025, 2024 and 2023 (in millions, except price per share and numbers of years):
| Options |  | Weighted Average Exercise Price |  | Weighted Average Remaining Contractual Term (years) |  | Aggregate Intrinsic Value
Outstanding as of December 31, 2022 | 3.3 |  |  | $ | 27.97 |  |  |  |  |
Granted | — |  |  | — |  |  |  |  |
Exercised | (0.5) |  |  | 21.01 |  |  |  |
Canceled/forfeited | (0.6) |  |  | 31.34 |  |  |  |
Outstanding as of December 31, 2023 | 2.2 |  |  | 28.87 |  |  |  |  |
Granted | 0.1 |  |  | 41.10 |  |  |  |  |
Exercised | (0.6) |  |  | 27.22 |  |  |  |  |
Canceled/forfeited | — |  |  | — |  |  |  |  |
Outstanding as of December 31, 2024 | 1.7 |  |  | 30.27 |  |  |  |  |
Granted | — |  |  | — |  |  |  |  |
Exercised | (0.4) |  |  | 26.20 |  |  |  |  |
Canceled/forfeited | — |  |  | — |  |  |  |  |
Outstanding as of December 31, 2025 | 1.3 |  |  | 31.38 |  |  | 3.8 |  | $ | 7.9 |
Vested and expected to vest as of December 31, 2025 | 1.3 |  |  | 31.37 |  |  | 3.8 |  | 7.9 |
Exercisable as of December 31, 2025 | 1.3 |  |  | $ | 31.00 |  |  | 3.6 |  | $ | 7.9 |
The fair value of each stock option granted was estimated on the date of grant using the Black-Scholes model for service condition awards with the following weighted average assumptions for the year ended December 31, 2024. There were no options granted during the years ended December 31, 2025 and 2023.
| 2024 |  |  |  |
Risk-free interest rate | 4.3 | % |  |  |  |
Volatility | 30.2 | % |  |  |  |
Dividend yield | 0.3 | % |  |  |  |
Expected years until exercise | 6.5 |  |  |  |
Options outstanding as of December 31, 2025 are summarized below (in millions; except price per share and numbers of years):
| Outstanding |  | Exercisable
Exercise Price | Number of Options |  | Average Exercise Price |  | Average Remaining Life (in years) |  | Number of Options |  | Average Exercise Price
$17.44 - $23.46 | 0.1 |  |  | $ | 23.11 |  |  | 1.6 |  | 0.1 |  |  | $ | 23.11 |
$23.47 - $31.46 | 0.9 |  |  | 31.21 |  |  | 3.7 |  | 0.9 |  |  | 31.21 |
$31.47 - $33.43 | 0.1 |  |  | 33.33 |  |  | 3.0 |  | 0.2 |  |  | 33.33 |
$33.44 - $41.10 | 0.2 |  |  | $ | 38.19 |  |  | 6.9 |  | 0.1 |  |  | $ | 36.76 |
Total shares | 1.3 |  |  |  |  |  |  | 1.3 |  |  |
The aggregate intrinsic value of stock options exercised under the Stock Plan was $5.3 million, $7.9 million and $5.2 million for the years ended December 31, 2025, 2024 and 2023, respectively. Stock Awards The following summarizes information related to Stock Award activity under the Stock Plan for the years ended December 31, 2025, 2024 and 2023 (in millions; except price per share):
| Number of Stock Awards |  | Weighted Average Grant-Date Fair Value
Unvested as of December 31, 2022 | 2.2 |  |  | $ | 27.39 |
Granted | 1.4 |  |  | 26.39 |
Vested | (0.9) |  |  | 27.56 |
Forfeited | (0.3) |  |  | 26.56 |
Unvested as of December 31, 2023 | 2.4 |  |  | 26.87 |
Granted | 1.0 |  |  | 41.34 |
Vested | (0.9) |  |  | 27.62 |
Forfeited | (0.4) |  |  | 31.81 |
Unvested as of December 31, 2024 | 2.1 |  |  | 32.37 |
Granted | 0.8 |  |  | 38.77 |
Vested | (0.8) |  |  | 30.77 |
Forfeited | (0.2) |  |  | 36.78 |
Unvested as of December 31, 2025 | 1.9 |  |  | $ | 36.34 |
Subsidiary Stock Plan The Company has a subsidiary stock-based compensation plan under which the Company grants equity awards to certain employees and non-employees for the common stock of a subsidiary that holds Driivz and certain other related entities. The Company recognized stock-based compensation expense related to the subsidiary stock plan of $1.3 million, $4.2 million and $4.1 million for the years ended December 31, 2025, 2024 and 2023, respectively.

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